From 2021, enterprises in Vietnam entitled to indefinite business suspension

From 2021, enterprises in Vietnam entitled to indefinite business suspénion (Artwork)

This is probably good news for businesses that are temporarily suspending or about to suspend business operations due to the COVID-19 pandemic. So what is the legal basis to prove this good news?

Vietnam's Decree 78/2015/ND-CP stipulates that the maximum duration of business suspension is 2 years, specifically in Clause 2, Article 57 of this Decree. as follows:

The suspension period must not exceed one year. If the enterprise or its branch/representative office/business location is still suspended after this period, another notification must be sent to Business Registration Office. The total duration of continuous suspension must not exceed two year.

However, from January 4, 2021 of Vietnam's Decree 78/2015/ND-CP has expired and is replaced by Vietnam's Decree 01/2021/ND-CP, in which Clause 1, Article 66 of Vietnam's Decree 01/2021/ND-CP clearly stipulates the time of registration of business suspension and the duration of business suspension as follows:

1. When an enterprise or its branch/representative office/business location suspends its business or resumes its business ahead of schedule, the enterprise shall send a notification to the Business Registration Office of province where the enterprise or its branch/representative office/business location is located at least 03 days before the planned date of suspension or resumption. If the enterprise or its branch/representative office/business location is still suspended after the notified suspension period, another notification must be sent to the Business Registration Office at least 03 days before the planned date of suspension. Each notified suspension period must not exceed one year.

Thus, the new regulation no longer limits the total period of consecutive business suspension. Currently, enterprises only need to notify 3 working days in advance of business suspension, and the duration of business suspension of each notice must not exceed 1 year. Difficult businesses are not forced to return to operation, or must dissolve or go bankrupt, but have more time to overcome the backlogs of the past years.

Although this is good news for businesses, it is not easy to accept for state agencies in inspection and examination. Detecting violations of the law by enterprises becomes more difficult when enterprises intentionally prolong the business suspension period to evade the strict supervision of state agencies. Thus, the law may need to have more provisions on conditions for temporary suspension of business for businesses in order to have more fairness, transparency, and minimize legal violations in the operation of some enterprises.

Hai Thanh

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