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Reforms focus on bankruptcy

Update: May, 29/2014 - 09:32
Nguyen Duc Kien

Nguyen Duc Kien, Deputy Chairman of the National Assembly's Economic Committee, spoke to Vietnam News Agency about draft amendments to the Laws on Enterprises and Bankruptcy.

Could you point out the amendments to the draft Bankruptcy Law?

In the ten-year period since the Law on Bankruptcy came into force, only around 250 enterprises filed for bankruptcy and a modest 88 of them completed the procedures.

The 2004 Bankruptcy Law has certain limitations that affect the operation of the market mechanism.

The draft law has two core changes.

The first change is about the bankruptcy process. Under the current law, companies must liquidate their assets before they announce bankruptcy.

This regulation makes enterprises hesitant to file for bankruptcy as it takes time to clarify an enterprise's debts.

As a result, the order is reversed under the draft law. Enterprises would be allowed to announce bankruptcy before implementing asset liquidation and others necessary requirements.

Secondly, the draft bankruptcy law aims to set up an organisation which would be in charge of managing bankruptcy issues.

The amendments aim to make the law more applicable in reality.

What changes have been made in the draft Law on Enterprises?

The Law on Enterprises, which took effect in 2005, was compiled and issued while Viet Nam was reviewing its legal documents to ensure their compatibility with the integration process into the World Trade Organisation.

After nine years, gaps in the law have been exposed that have caused problems with the management of many problems that enterprises encounter, one of which is the management of State capital at State-owned enterprises. The management of State capital could be regulated in a separate law.

The draft Law on Enterprises tries to tie in the rules of the market mechanism as much as possible.

A core amendment is that enterprise management regulations would be more flexible.

The draft law also aims to reduce the power of major shareholders while protecting small stakeholders. This would prevent the decision-making powers being left to major shareholders only.

In addition, administrative reforms should aim to meet enterprises' demands. Foreign-invested companies are different from domestic companies. With that viewpoint, foreign investors would be granted investment certificates and business registration certificates separately.

Are there any regulations in the draft laws which would limit the domination of foreign enterprises in some key economic sectors?

We are happy for Vietnamese exports to occupy a large market share.

However, in a flat world and during the globalisation process, market shares should be mixed. If Viet Nam holds a major market share in one particular sector of the economy, other countries could corner the market in another.

What's important is to ensure the rights of labourers as well as the whole nation in general.

Goods must not be exported at any cost to expand market share, but at prices that can ensure resources are reinvested for future development. — VNS

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