VCCI proposes changing the entity responsible for recording the four-digit industry code when registering a business.

According to Article 7 of the Draft Decree on Business Registration, the business founder or the business itself shall choose a four-digit economic sector code from the Vietnamese Economic Sector Classification System to record the business sector in the business registration dossier.

This regulation is not new; it is inherited from existing legal documents. In fact, during the drafting of Decree 78/2015/ND-CP, Decree 108/2018/ND-CP, and Decree 01/2021/ND-CP, the Vietnam Chamber of Commerce and Industry (VCCI) repeatedly raised concerns about the shortcomings of the regulation, even proposing its abolition, but these suggestions were not taken into account.

In this revision, VCCI expressed a more conciliatory view. Specifically, VCCI proposed retaining the regulation requiring the inclusion of the 4-digit industry code when registering a business, while specifying that the entity responsible for including this code should be the state management agency instead of requiring the business itself.

In explaining this proposal, VCCI stated that state agencies can rely on the business sectors registered by enterprises to determine appropriate groups and subgroups for statistical or other management purposes.

Furthermore, VCCI also clarified that regardless of whether a business registers for a particular industry or not, as long as it is not a prohibited business sector, the business will be permitted to operate according to the law. Therefore, from a business perspective, determining the industry code at the time of business registration is of little significance.

Therefore, VCCI also recommends that if the Drafting Committee continues to disregard this suggestion, then Article 7 of the Draft should clearly define in its regulations the measures to minimize potential barriers arising from the implementation of business registration.

It is unclear what cases involve registering business activities that do not yet have a name.

Specifically, VCCI does not fully agree with the content of Clause 5, Article 7 of the Draft, which stipulates: “For business sectors and professions not included in the Vietnamese System of Economic Sectors and not regulated in other legal documents, the Business Registration Authority shall consider recording these business sectors and professions in the National Database on Business Registration if they are not prohibited from investment and business activities, and simultaneously notify the Ministry of Planning and Investment (General Statistics Office) to add the new business sector or profession.”

The question arises: in this case, will the business registration authority record the new business line in the database before the business registers, or will the authority allow the business to register the new business line first and then record it in the database?

In fact, businesses have reported being instructed by the business registration authority to temporarily remove the registered business lines from the registration/change application so that the business registration authority can record them in the national database and notify the Ministry of Planning and Investment, after which the businesses can return to add them. However, this method of implementation has significantly affected business registration activities and undermined the spirit of reform aimed at facilitating businesses in this procedure.

To ensure transparency and freedom of business, VCCI proposes that the Drafting Committee amend the regulation in Clause 5, Article 7 to the effect that the business registration agency will register businesses according to the industry and profession requested by the enterprise and record this industry and profession in the National Database.

This is a matter of great interest and concern to many businesses. Recently, at a workshop organized by the Vietnam Chamber of Commerce and Industry (VCCI) and the Ministry of Planning and Investment to gather feedback on the draft regulations, many businesses continued to raise concerns about difficulties, and even arbitrary practices, in implementing these regulations, particularly when businesses register for business sectors not included in the Vietnamese Economic Classification System and not regulated in other legal documents.

According to Ms. Tran Thi Thanh Huyen, a member lawyer at NHQuang & Associates Law Office, approval largely depends on the perspective of the local business registration authority. "In reality, this is a 'thorny' issue for businesses, given that the Enterprise Law stipulates that businesses are free to operate in any industry or profession not prohibited by law," Ms. Huyen said.

This is also why Ms. Huyen does not support the draft amendment to Clause 8 regarding the recording of business lines and activities of branches and business locations of enterprises (according to the rules for recording business lines and activities of enterprises).

“This additional content is unnecessary and may cause confusion for businesses during implementation. Article 44 of the 2020 Enterprise Law already stipulates that the business lines and activities of a branch must be consistent with the business lines and activities of the enterprise, and the business location is where the enterprise conducts its specific business activities. Therefore, in practice, businesses are currently recording the business lines and activities of their branches and business locations in accordance with the business lines and activities of the enterprise that have been licensed, and there are no problems whatsoever. I propose removing the additional content in Clause 8, Article 7,” Ms. Huyen suggested to the Drafting Committee.

The Vietnam Chamber of Commerce and Industry (VCCI) also agrees with this proposal, as noted in its written comments sent to the Ministry of Planning and Investment.