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The tough road of registering your business   2008-10-08 - Tuoi tre

Business registration has been considerably simplified as a result of a lot of efforts to minimise administrative procedures. However, it remains a trial for many businesses.


Three months and one document


In the first nine months of the year, 13,200 new businesses were established in HCM City with the total registered capital of VND98tril.

Limited companies were the biggest choice of investors with 8,000 limited companies registered, followed by joint-stock companies with 2,000 established.

H., a staff of a company specialising in concrete production in district 12, HCM City, related that her company planned to set up another concrete workshop in Binh Chanh district.


H. was told that the district authorities where her company planned to set up the workshop had refused to grant a licence to the company because of the environment problems of the project. However, as her boss wanted an official answer from the state management agencies, H. had to go back and forth to the HCM City Investment and Planning Department to get the written document from the department. Finally, when she did get the document, the explanation for the tardiness from the department was that the district’s authorities had been slow to give answers.


Meanwhile, the Business Registration Office explains tardiness in dealing with applications for business registration by citing that the office has a limited number of staffs. The office has 49 staffs, 50% of whom have less than one year of experience. Tran Thi Binh Minh, Head of the Business Registration Office, said that the office receives 470 people a day. Every staff of the office has to deal with 18 applications a day on average, while a staff member can handle about 10 on average.


It takes investors 400 days on average to fulfill the procedures (60 kinds of documents, 314 formalities) to get a license for a project outside industrial zones and export processing zones.

(Source: The report on checking business conditions by MPI)

At a recent workshop on checking business registration procedures held by the Ministry of Planning and Investment, a lawyer said: “All the officials at the business registration office have problems in qualifications. They always say they need to ask for permission from higher levels. Different staffs have different understandings about the same issue.”


Five days to get business licence?


A deputy director of the HCM City Planning and Investment Department admitted the tardiness in dealing with the business registration applications, and said that the department has been trying to settle the problem by recruiting more staffs and improving procedures. He said that the tardiness mainly occurs with the registration of selling stakes to foreigners as the department always has to ask for permission from the ministry.


The official has announced that a breakthrough in business registration will be made in October 2008, which will allow the time needed to grant business registration certificates to investors to be shortened to five days from 10 days. In addition, the city’s planning and investment department will not consult with district authorities on some issues, which may also help save time.


He said that the investment and planning department has had working sessions with districts in the city, but it still cannot reach agreements with two districts.


Meanwhile, investors seem to be indifferent to the announcement, as the new regulation will touch some ‘sensitive’ fields like karaoke, massage shops, dance halls and bars.


Meanwhile, it remains unclear about the ratios of stakes of unlisted companies foreign investors can purchase. Currently, local investment and planning departments wait for opinions from the Ministries of Planning and Investment, and Industry and Trade on every case.


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