1. Central Institute for Economic Management
Implementation of the Enterprise Law: New way of policy enforcement in Vietnam By
Nguyen Dinh Cung
Director of Department for Macroeconomic Policy
68 Phan Dinh Phung, Ha Noi, Vietnam
Tel: (84) ; Mobile: (84)

2. 1. Scope of Enterprise Law Application
The Legal framework for forms of business organization:
1. Law on foreign direct investment in Vietnam
2. Cooperative law
3. Law on state owned enterprises
4. Enterprises Law (1999): stipulates 4 types of business organization:
- Sole Proprietorship
- Partnership
- Limited liability company
- Join Stock Company

3. 2. Core changes of Enterprise Law
1. Introduction of automatic procedures for incorporating private enterprises
Under the previous company laws:
- Complicated: 20 steps and 20 documents for getting permissions and approvals from numerous state agencies
- Time-consuming: it took from 6 to 12 months to complete
- High cost: 10 to 20 VND millions ( USD)

4. 2. Core changes of Enterprise Law
Investors
Communal
People's Committee
Preparation of establishment file
Preparation of business registration
Establishment Certificate
District People's
Committee
Certificate by Notary Office
Local Hospital
Local Police Station
Certificate by Bank
Required Professional License
Bank
Business registration is not approved
Establishment is not allowed
Office of Provincial
People's Committee
Enterprise Statutes
Line Department
List of Board Members, Inspection, etc..
A completed establishment file
File submitted to:
Department of Planning & Investment
or Office of Provincial People's Committee or Line Department
Enterprise Owner founding Members' Identification Certificate or Household registering Book
Line Ministries
Provincial (city)
People's Committee
Department of Planning and Investment
Establishment is allowed
Business registration is approved
Issue Establishment License
Business Registration Certificate
The end

5. 2. Core changes of Enterprise Law
2. Abolishment of 150 business licenses (among 400 existing ones)
3. Abolishment of approval or agreement letter of relevant state agencies for any changes in enterprise activities, such as:
- Entering into new industries
- Setting up branches or representative offices
- Changes in investment, shareholders, headquarters' address...

6. 3. Responses of vested interest groups
1. From Government officials
- Delay of implementation reasoned by:
+ lack of guidelines
+ have not received official document yet,...
- Realization of regulations inconsistent or contradict to the EL
- Issue licenses which had been already abolished
- Criticized that the implementation of EL resulted in loosing state management or creating social disorders: “ghost enterprise”, tax evasion, transportation accidents, social evils, ....

7. 3. Responses of vested interested group
2. From existing Registered enterprises
Complaints:implementation of the EL leads to:
+ collapse of cooperatives
+ Unfair competition
+ Unhealthy enterprise, including inefficiency of resources
Lobby for recovering of barriers or licenses

8. 4. Impact of EL implementation
-- Number of newly registered enterprise dramatically increased
- Number of enterprises expanded their activities, created branches, representative offices, increased investment capital, ... In 2000, over 9000 enterprises expanded their scope of activities

9. 4. Impact of EL implementation

10. 4. Impact of EL implementation
Reasons:
1. Content of the EL is clear, consistent, especially market-oriented and business - friendly; no room for discretion by officials.
2. Strong commitment of government: The special Task Force found by the P.M
- 20 members: experienced economic and legal experts
- headed by First Deputy Prime Minister

11. 4. Impact of EL implementation
- Duties:
+ Drafting regulations
+ Supervising implementation of the EL
+ Regularly report to the PM
3. Public support
+ closed co-operation between the Special task force and mass media: TV, Radio, Newspaper, ...
+ Any barriers, unwillingness of vested interest groups has been quickly disclosed => remedies therefore timely and effectively introduced.

12. Thank you very much