Enacted Business Regulation Reinforces Capital Supervision, Intensifies Investigation Measures
Hey there! Let's talk about a buzzing topic in Vietnam's business scene - the proposed amendments to the Enterprise Law. The government's aim? To strengthen corporate transparency and combat the misuse of 'virtual capital.' Here's what you need to know:
The Nitty-Gritty of the Enterprise Law Amendments
The overarching goal is to clarify key concepts, reinforce prohibited acts, and make business operations more transparent. The changes focus on revising definitions related to dividends, the market value of shares, and capital contributions, aligning them with accounting standards and real-world stock market practices.
Enter the 'False Declarations' Prohibition
A noteworthy addition to the amendments is the explicit ban on 'false declarations.' Although this offense is already covered under the Penal Code, it's quite prevalent, particularly in cases of forged signatures in business registration documents.
Expanding the Entrepreneurial Horizon
The draft law extends the list of individuals permitted to establish enterprises, allowing public university lecturers and staff to contribute capital and participate in the management of businesses aimed at commercializing scientific research. This aligns with the National Assembly Resolution No. 193/2025/QH15 on mechanisms to promote science, technology, and innovation.
Shifting from Pre-checks to Post-checks
A highlight of the revised law is the increased responsibility assigned to provincial-level People's Committees in supervising enterprises post-registration. This includes developing inspection procedures and issuing inter-agency coordination regulations at the local level.
In essence, these changes aim to prevent exaggerated or fictitious capital declarations, commonly observed before firms become public companies, issue private bonds, or engage in tax fraud and state budget misappropriation.
While experts argue for mandatory financial capacity verification or asset valuation reports at the registration stage, concerns over increased administrative burden and compliance costs have led the Ministry of Finance and the Ministry of Justice to oppose this move. Instead, they support enhanced post-registration inspections, in line with global regulatory trends.
Decentralization of Enterprise Management
Chairman of the Bắc Ninh People's Committee, Vương Quốc Tuấn (second from left) visits a company at Tiên Sơn Industrial Park. VNA/VNS Photo Thái Hùng
The proposed law significantly decentralizes enterprise management to provincial authorities. Local governments would be responsible for handling business registration, conducting inspections, addressing capital-related violations, and coordinating with other regulatory agencies in overseeing corporate activities. This approach is expected to improve enforcement, enhance the effectiveness of post-registration monitoring, and reduce legal breaches in the business sector.
In conclusion, these amendments are designed to improve the business environment by promoting transparency and reducing illicit practices. Stay tuned for updates on this exciting development in Vietnam's business landscape!
Sources:1. Vietnamnews.vn2. Nhipcaudautu.vn
- The proposed amendments to Vietnam's Enterprise Law aim to strengthen corporate transparency and combat the misuse of virtual capital in the business sector.
- The amendments clarify key concepts, reinforce prohibited acts, and align definitions related to dividends, the market value of shares, and capital contributions with accounting standards and real-world stock market practices.
- A notable addition to the amendments is the explicit ban on false declarations, particularly in cases of forged signatures in business registration documents.
- The draft law also extends the list of individuals permitted to establish enterprises, allowing public university lecturers and staff to contribute capital and participate in the management of businesses aimed at commercializing scientific research.
- The revised law increases the responsibility assigned to provincial-level People's Committees in supervising enterprises post-registration, including developing inspection procedures and issuing inter-agency coordination regulations at the local level.
- The proposed amendments also significantly decentralize enterprise management to provincial authorities, who would be responsible for handling business registration, conducting inspections, addressing capital-related violations, and coordinating with other regulatory agencies in overseeing corporate activities.
