Obstacles ahead for lauded Vietnam business law
HANOI - A landmark Vietnamese law that
should give the biggest boost to local private firms in years is
facing teething problems ahead of its implementation on January
1, officials and lawyers said on Friday.
They said that with only two weeks to go before the Enterprise
Law took effect, key elements were missing, including a national
Business Registry and supporting legislation repealing numerous
conflicting laws.
Lawyers hope the Enterprise Law, which was approved by the
country's National Assembly earlier this year, will encourage
more Vietnamese to set up private companies in an environment
weighted in favour of state-run firms.
The law would allow people wanting to set up a private firm to
simply register the details of their business rather than navigate
the country's licensing labyrinth.
Wholly private Vietnamese entities form a tiny percentage of
manufacturing and industrial entities in Vietnam, where the
communist authorities insist the state will play the leading role in
the economy.
``It is going to take time to transform this law into life,'' one
official involved in the drafting said, adding it could be two or
three years before the law operated effectively.
``The toughest and most important thing is to review all existing
legal paper -- 13 laws, five ordinances and hundreds of other
(legal) documents -- and abolish those contradicting the
Enterprise Law or amend the inappropriate points.''
One financial source said Hanoi had been trying to reach
consensus on which laws to repeal but that debate was bogged
down because some ministries had insisted they needed licensing
discretion provided by rules that conflict with the new law.
``There has been talk of setting up a high-level group to look at
facilitating implementation of the law,'' he said.
Lawyers also bemoaned the fact that a Business Registry had
yet to be set up, leaving budding entrepreneurs who want to use
the law out in the cold until one is established.
The official involved in drafting the law said the registry might
initially come under an existing licensing bureau in the Planning
and Investment Ministry (MPI).
He said the problem was not so much setting up a registry, but in
building an effective system with qualified staff.
MPI officials said the government had not made any final
decision on the registry, which will record company objectives,
ownership structure and contractual obligations, information that
would all be publicly available.
Official newspapers have said there were many proposals
concerning the Business Registry, which lawyers have hoped
would be an independent body free of ministerial control.
The Enterprise Law defines four entities common in more
developed economies and brings them under a single legal
framework for the first time in Vietnam.
They are private enterprise (sole trader), partnership, a
shareholding company and a limited liability company.
Reuters - December 17, 1999.
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