The National Assembly's Standing Committee endorsed Wednesday a government proposal to amend the Enterprise Law and do away with a requirement that foreign companies licensed before July 1, 2006, have to register afresh.
Lawmakers will vote on the amendment of the law when the National Assembly, Vietnam's legislature, convenes its bi-annual session that will open May 20, a meeting of the assembly's standing committee heard Wednesday.
If the amendment is approved by two -thirds of the 500-member assembly, it would take effect on July 1.
The 2005 law stipulated that firms registered before it took effect have to reregister within five years, as the government sought to improve oversight of foreign businesses.
Some 6,000 companies were expected to reregister, but only half that number actually did.
Those failing to register afresh are not allowed to apply for licenses to diversify to other areas or expand their business or renew their licenses when they expire.
The government has proposed to do away with the reregistration requirement, acknowledging that the amendment is "extremely necessary and urgent."
Ho Chi Minh City alone has 800 FDI companies that failed to reregister. Of them 27 saw their licenses expire last year and are still trying to renew them. They have a combined capital of US$634.4 million.
Tran Thi Thu, a former chief of the Foreign Investment Agency's division dealing with policy issues, said a few years ago that companies were probably not aware of the requirement.
But Dao Nguyen of law firm Johnson Stokes & Master rejected this, saying FDI companies were afraid they would lose their tax breaks if they registered afresh.
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