In October 2020, the Government issued the new Decree 122/2020 on the coordination between various separate procedures relating to the business commencement steps of a company in Vietnam including enterprise incorporation procedures, employee usage declaration, social insurance registration code, and registration of tax invoice. In particular,

• Decree 122/2020 provides for a company registration application which also includes information necessary for tax and invoice registration, social insurance registration, and employee usage declaration. Previously, the company registration application only include company registration information and tax registration information; and

• The Enterprise Registration Authority will act as the single contact point to receive the application submitted by the relevant company’s founders and will electronically transfer necessary information to the tax authority, social insurance authority, and labour authority.

The authority considers that Decree 122/2020 to be a major “de-regulation” step which replaces eight steps that require 16 days to complete with only four steps which require six days to complete. Decree 122/2020 will take effect immediately from its issuance date of 15 October 2020. But to implement Decree 122/2020, various Ministries may need to issue implementing regulations and, more importantly, connect their database electronically.

Decree 122/2020 is intended to implement Article 27.3 of the Enterprise Law 2014, which was issued six years ago and will shortly be replaced by the Enterprise Law 2020 in the next two months. Accordingly, any actual improvement brought about by Decree 122/2020 will be short-lived. And the Government will need to issue a new Decree to amend or replace Decree 122/2020 when the Enterprise Law 2020 takes effect.

This post is written by Pham Thu Ngan and Nguyen Quang Vu.