Revised Law on Enterprises to add household business regulations

Vietnam has considered adding regulations of household business to the revised Law on Enterprises that is set to be submitted to the National Assembly for approval in October (Photo: VNA)

Hanoi (VNS/VNA) - Vietnam has considered adding regulations of household business to the revised Law on Enterprises that is set to be submitted to the National Assembly for approval in October.

Vice Chairman of the National Assembly’s Economic Committee Nguyen Ngoc Bao said at a plenary session of the assembly’s Economic Committee on August 30 the country had an estimation of more than 5.1 million of household businesses.

They employ around 8 million people nationwide and contribute nearly 30 percent of the country’s Gross Domestic Product (GDP). However, it only contributed 1.6 percent to the State budget, he said.

Chairman of the Vietnam Chamber of Commerce and Industry Vu Tien Loc said adding regulations of household business would be a “breakthrough” for the new version of the draft law.

Participants at the plenary session said household businesses were believed to be an entity in the national economy.

But current regulations revealed some shortcomings such as regulations on legal status and civil responsibility of household business were not clear, business rights were limited within the district level, a household business was only allowed to hire less than 10 employees and was not permitted to open branches and representative offices, the participants said.

The shortcomings were preventing the businesses from taking advantage of opportunities and promoting the benefits of investment resources under the form of business household, the participants said.

According to Loc, bringing regulations of household business into the law was necessary and in line with the common developing trend. It also created an equal environment for household business so that they could contribute more to the GDP in the future.

Agreeing with Loc, Phung Van Hung, a permanent member of the committee, said the tax a household business had to pay was unequal to a micro enterprise.

The revenue of a household business could be hundreds of millions of VND per year but they had to pay only a tax of several hundreds of thousands of VND each year.

Meanwhile a micro enterprise had to pay a corporate income tax rate of 15 percent each year, he said.

Former Deputy Minister of Planning and Investment Dang Huy Dong said it needed to have the equality of policies and information disclosure of household business.

Some participants said it should clarify what benefits household business would receive.

The revised Enterprise Law is scheduled to have 10 chapters and 213 articles, of which 60 articles are under revised and one chapter and eight articles added.

The aim is to continue making a business a cheaper and safer business tool for investors, thereby increasing the attraction and mobilisation of all sources for production and doing business.

It also aims to facilitate activities of business establishment, cut down cost and time in starting a business, improve mechanism to effectively protect the legitimate rights and interests of investors, shareholders and members of enterprises as well as make corporate governance meeting regional and international standards.-VNS/VNA