Thousands of foreign-invested enterprises missing investment certification re-registration deadlines may dodge a bullet and avoid the threat of closing factories.
The Ministry of Planning and Investment (MPI) last week suggested two options to Prime Minister Nguyen Tan Dung for rescuing the foreign-invested enterprises (FIEs) in jeopardy.
In the first option, the MPI suggested the government seek National Assembly permission to extend the re-registration deadline until the Enterprise Law is adjusted next year. In the second option, it suggested the government ask the National Assembly to immediately erase Article 170 of the Enterprise Law 2005 in relation to re-registration.
“The MPI proposes the government to take the second option,” the ministry said in a document sent to Dung.
According to the Enterprise Law issued in 2005, FIEs licenced before July 1, 2006 and did not implement re-registration, will have to stop operation of projects once their investment licences expire. However, foreign investors had four years to re-register, from 2007 to 2011, but many sat on their hands.
There were 6,000 FIEs licenced in Vietnam prior to 2005 and required to re-register, but more than half have not re-registered yet, according to the MPI.
In Ho Chi Minh City, for example, there are 784 FIEs in danger of stopping operating once their investment licences expire because of missing the re-registration deadline on July 1, 2011. Some 27 firms with total investment capital of $672 million must stop their operations in 2012 and 174 others shared the problem in 2013 and 2014.
If the MPI’s options are approved by the prime minister and National Assembly, thousands of FIEs facing closure due to the re-registration hiccup will be saved.
The MPI said many foreign investors had not re-registered because they thought they would lose given investment incentives. In fact, most of these enterprises were operating very well and wanted to continue doing business in Vietnam.