After one year of implementation, why does the Government have to amend the Decree on enterprise registration?

A decree guiding the implementation of the Enterprise Law usually has a relatively long lifespan before it needs to be amended. Therefore, the Government's issuance of Decree No. 296/2026/ND-CP[1] (Decree 296) only about a year after the effective date of Decree No. 168/2025/ND-CP (Decree 168) has attracted the attention of the business and legal community in Vietnam.

Normally, the decree on enterprise registration mainly guides the order and procedures for establishment, change and termination of the operation of enterprises.

At first glance, the amendment in a short time can create the impression that the legal system is still unstable. However, in the context of Vietnam's strong institutional reforms in the 2025-2026 period, it can be seen that this is not an adjustment to overcome a failed policy. In contrast, Decree 296 reflects a larger requirement: the business registration system must adapt to simultaneous changes in law, governance models, and international transparency standards.

The change of the legal environment forces the decree to change

Normally, the decree on enterprise registration mainly guides the order and procedures for establishment, change and termination of the operation of enterprises. However, over the past year, the legal landscape has changed at a very rapid pace.

The amendment of the Law on Enterprises, the Law on Investment, the Law on Recovery and Bankruptcy, the Law on Organization of Local Governments and many major policies on private economic development, administrative procedure reform and digital transformation have made the business registration system no longer only perform the function of managing documents. At the same time, it must become a tool for implementing the Government's reform policies.

That explains why many contents of Decree 296 do not stem from the inadequacies of Decree 168 alone, but to ensure consistency between regulations on business registration and changes in the whole legal system. This is also a common feature in major reform periods. When many laws change in a short time, the guiding decrees cannot remain the same if we want to ensure the synchronization of the legal system.

Practice always arises faster than the lawmaker's prediction

Another important reason for the promulgation of Decree 296 is the situations that arise in practice that Decree 168 has not fully adjusted.

Business registration activities are built on the basis of the most common cases. However, business practices are always more diverse than expected by the drafting agency. After only one year of application, many cases have arisen such as changing shareholders in some specific transactions, handling business households registered before Decree 168 takes effect or changing registration information during the period when the enterprise is temporarily suspended. These situations are not complex transactions of large enterprises but appear quite often in practice.

If the law does not have clear regulations, enterprises will have to wait for guidance or consult the management agency for each specific case. This not only prolongs the processing time, but can also lead to different ways of applying it from locality to locality.

Therefore, Decree 296 does not merely amend technical regulations. The greater significance is to improve the operability of the enterprise registration system, making it possible for procedures to handle more practical situations without relying too much on administrative guidance.

Information transparency – an important but little-talked about motivator

If you only look at the regulations on documents and procedures, many people will think that Decree 296 is just an administrative reform document. In fact, one of the most important drivers of this amendment comes from the requirement of international integration.

In recent years, Viet Nam has been implementing a National Action Plan on the Exchange of Information on Demand for Tax Purposes to meet the standards of the OECD and the Global Forum on Transparency and Exchange of Information[2]. To fulfill these commitments, the domestic legal system must ensure the ability to collect, store and provide business information in a complete, accurate and verifiable manner. That is also the reason why Decree 296 not only amends the regulations on business registration in the traditional sense but also adds a mechanism related to the beneficial owners of enterprises. This is one of the most notable new points of the decree.

For many years, the enterprise registration database mainly reflected legal information such as the name of the enterprise, its legal representative or its members and shareholders as prescribed. However, in the context of preventing and combating money laundering, combating tax evasion and improving market transparency, many countries have switched to managing both information about beneficial owners – that is, individuals who actually control or benefit from businesses.

The addition of regulations related to beneficial owners shows that Vietnam's business registration system is gradually approaching international governance standards. At the same time, this also reflects a change in management thinking: business registration is no longer only aimed at establishing legal status, but also contributes to improving market transparency and supporting risk management in the economy.

From procedural reform to data-driven governance

If the requirement of information transparency is a driving force of Decree 296, digital transformation is the other driving force, as well as a factor that changes the way the business registration system operates.

The goal of administrative reform is largely to digitize the process of handling procedures. Businesses can apply online, receive electronic results, and reduce travel time. However, in essence, businesses still have to provide the same information to different agencies many times.

Decree No. 296 shows that the Government is shifting to a different approach. Instead of requiring enterprises to continue proving the information that the State already has, business registration agencies may exploit data from the National Enterprise Registration Database and other national and specialized databases; only request additional records when the data cannot be exploited or is incomplete. At the same time, the use of VNeID and the implementation of procedures in the electronic environment continue to be expanded.

This is a step from "electronizing procedures" to "data governance". The difference does not lie in whether businesses submit documents online or in person, but in the fact that data has become a shared asset of the state management system. When data is connected and reused, the cost of compliance for businesses decreases, while the auditing, collation, and management capabilities of state agencies are enhanced.

This trend is also in line with the "once-only" principle[3] being applied by many countries, whereby people and businesses only have to provide information once. From an administrative perspective, this is a much bigger change than simply cutting back a few profile components.

 A modern legal system is only effective when it is supported by a competent administration.

Decentralization to bring public services closer to businesses

Another notable content of Decree 296 is the completion of the decentralization mechanism in business household registration, in accordance with the two-level local government model. According to the new regulations, the organization of the business household registration agency is designed flexibly according to the conditions of each locality, ensuring that there is still a focal point to perform the registration function even if the commune level does not organize a specialized department.

This is a step in line with the policy of decentralization, decentralization and streamlining of the administrative apparatus. However, the effectiveness of the reform will depend not only on the transfer of authority, but also on the enforcement capacity of local governments.

In the context of increasingly digitized and connected data, the consistency in the application of the law will depend more on the quality of the information system, business processes and the team of implementing officials. If these factors are not ensured synchronously, the risk of different interpretations and handling between localities may still occur.

This shows that institutional reform and digital transformation must be implemented in parallel. A modern legal system is only effective when it is supported by a competent administration.

Reduce compliance costs while improving management efficiency

Throughout Decree 296 is the goal of continuing to improve the investment and business environment by reducing compliance costs for businesses.

Many procedures have been shortened in the processing time, the composition of the dossier has been simplified on the basis of exploiting available data and the electronic processing process has been more complete. It is worth noting that the Government did not choose to cut procedures by relaxing management requirements. On the contrary, the management method is changed in a smarter direction: reducing the burden of proof for businesses but increasing the ability of state agencies to exploit, authenticate and share data.

This approach benefits both sides. Enterprises reduce time, costs and risks arising in the process of carrying out procedures, while the State has the conditions to improve data quality and management efficiency.

Conclusion

The most notable thing about this amendment to the business registration regulations does not lie in shortening the processing of documents by one day or cutting some paper components. The bigger significance is that business registration is being viewed in a completely different way. From being mainly a market entry procedure, the business registration system is gradually becoming a data infrastructure for national governance, supporting tax management, preventing and combating money laundering, improving market transparency and reducing compliance costs for businesses.