Technical Assistance to Business Registration Reform in Viet Nam Presentation to the DPG-PSD Dar es Salaam Nilgün Taş Chief, Competitiveness, Upgrading and Partnerships Unit Business, Investment and Technology Services Branch 10 April

Outline  I. Scope of business registration  II. Rationale for registration reform  III.Organizing the reform  IV. Viet Nam example 2

3 I.Scope of Business Registration

Scope of business registration  A legal entity that will do business is created  Information about this commercial entity is recorded and offered to the members of the public:  Entity’s name, address of its head office, branches and business locations,  Authorized capital, names and addresses of its owners, and their shares in the entity, lines of business  Entity’s articles of incorporation and its by laws  In case of a public limited company, all corporate records, including annual financial statements  Record of compliance by the commercial entity of its legal obligations  Amendments made to any of the above 4

II.Rationale for Business Registration Reform 5

Improving the business environment 6

Why registration reform: market entry Legally valid information on the business is required for basic business operations and is also important for contract enforcement; for example, bidding for contracts and trading across borders is difficult for enterprises that are not formally established Registration implies the protection of the rights of workers (such as health insurance and pension benefits) Formal establishment is usually a precondition for accessing business support incentives 7

Why registration reform: business community Business registries are a source of information to find potential business partners Business registries allow for verification of both historical and current information on businesses, thereby reducing the risks and costs of business partnerships Financial and business service providers can use the business registry to find potential clients 8

Why registration reform: public sector at large Business registration provides the basis for tax collection and also broadens the tax base through formalization Business registries are important for statistical purposes as they are a source of knowledge on the private sector and trends therein; they are therefore important for informed public policy decision making Business registries also function as a pillar used by other fields, such as credit information systems, social security, land registries, secured transaction registries, trademark registries and the courts. 9

Registration reform: expected outcomes Reduced risks and costs of doing business Improved quality of legally valid enterprise information Demonstrated good practice in inter-ministerial cooperation and high quality public service delivery Enhanced transparency in corporate governance 10

III. Organizing the reform 11

Reform stakeholders  Private sector; easy access to the legally valid and financial information of enterprises Business community Banking and finance Law firms Researchers  Public sector; using same set of data Ministries/Agencies Social security Intellectual property Trademarks Credit information Other registries Courts 12

International Best Practice Registration service features National/central business register Inter-ministerial cooperation Legal principles and standards Single-point-registration Unique ID Consolidated form One registration record at all times Updating of information Accessibility/Transparency Online Registration Filing of annual financial statements Distribution of legal and financial data about the enterprises Provincial BRO and GDT Officers in consultation on inter-ministerial cooperation 13

Building blocks of registration reform 14

15 IV. Viet Nam Example

Situation at start-up of assistance 64 (now 65) Business Registration Offices (BROs) in 64 (now 63) provinces 480,000 business registration certificates (on paper) Business, tax and seal registration done at BROs through one-stop-shops where 3 different people received three different forms according to 3 sets of regulations General Statistics Office (GSO) received incomplete/irregular information on registered enterprises Information about business partners was theoretically open to public but you had to go to each BRO to get it!! Enterprise Law could not be implemented in its entirety… 16

17 National Business Registration System (NBRS)

Planning and implementation 18

Reform Phases Phase A Module I Inter-Ministerial Cooperation National Business Registration System (NBRS, an e-Government and public administrative reform initiative) Phase A Module II Information Distribution System Service Pricing Framework Client-centered Service Orientation Capacity Phase B Annual Financial Statements Filing System Client-centered Service Orientation Capacity Performance Management System ABR Call Center at work 19

Main UNIDO TA inputs Legal framework (direct advice) System development and deployment HW, basic SW and ISP procurement Training, capacity building and awareness raising on registration and information services Transfer of pre-reform enterprise data Service pricing framework Capacity building in client centered service delivery Performance management system Over 500 BRO Officers certified to use the NBRS 20

Legal Framework 1999 Enterprise Law 2005 Enterprise Law Decree 88 Circular 03/ Government resolution 59 Inter-ministerial circular 02/ Government resolution 02/2008 Inter ministerial circular 05/2008 (GD of Tax, MPI, GSO and MPS) 2010 Decree 43 on Business and Tax Registration issued on 15 April and Circular signed on 1 June Agency for Business Registration established in September

Before and after the NBRS 22

23 Information services* from the NBRS *Available by early 2013

NBRS Information products* 24 *Available by early 2013

Results NBRS is used in all Provinces since January 2011 and includes more than 764,000 records, with new registrations from 1 to 5 April amounting to 2,037, amendments to 2,915 and dissolutions 265. To date, 247,782 new registrations, 411,375 amendments and 40,285 dissolutions have been captured in the NBRS. 25

Results Standard, computerized work processes are operational in 63 provinces/65 BROs 28 % of business owners and 24% of legal representatives are women Per year: New registrations: ~60K Dissolutions: ~4.5K Amendments: ~70K 26

THANK YOU FOR YOUR ATTENTION ! Comments/Questions 27