Many foreign firms have missed deadline after deadline to renew their licenses, including the latest one on February 1.
Foreign businesses licensed before the passage of the 2005 Enterprise Law had been given until 2008 and then until 2011 to register afresh.
But by the middle of last year nearly half of the 6,000 foreign firms had not done so, and were prohibited from diversifying or expanding, and even faced a possible shutdown when their licenses expired.
But the government changed the rule last October, scrapping the punishment and mandatory reregistration for all firms and requiring only those whose licenses had expired to apply for new ones before February 1, 2014.
Firms only had to register afresh if they planned any expansion or diversification that would lead to a longer operational life than licensed.
The decision was expected to benefit 2,916 businesses that together had invested US$18.5 billion and provided 446,000 jobs.
But many of them continued to ignore the regulation.
As of January-end, Ho Chi Minh City had received applications from only two out of nearly 90 foreign firms for reregistration, according to its Department of Planning and Investment.
However, half of the businesses with expired licenses might have dissolved or relocated, according to an unnamed department official.
The government expected the reregistration to help them improve oversight of foreign firms.
But online newspaper Dau Tu quoted lawyer Nguyen Hung Quang of law firm NHQuang&Associates as saying last year that at many joint ventures, local firms disagree with their foreign partners about the reregistration.
Minority shareholders, who are often Vietnamese and enjoy an equal say in management as the majority shareholders, fear their rights would be reduced, he said.
He also said the new law makes changes to the management mechanism of a company, including exclusion of deputy general directors from the management board.
Le Net from law firm LCT also said many foreign firms have an unfounded fear that they would lose their tax breaks if they register afresh.
They do not really “feel secure” since the incentives are not be clearly spelled out in the new licenses as they used to be before, he said.
Like us on Facebook and scroll down to share your comment