City unable to tackle bogus companies

Authorities in Ho Chi Minh City are unable to manage bogus companies that have been registered a long time back, but now do not operate at all. 

 
A two square meter company office on the 6th floor of Master Building, 41-43 Tran Cao Van, Ward 6, District 3 in HCMC (Photo: SGGP)

According to statistics, HCMC currently has 148,299 licensed companies, of which seventy percent are medium or small scale and operate as private, joint stock, or limited companies.

More than 50,000 of the above companies only exist on paper. Authorities have no knowledge of there location or modus operandi.

According to the People’s Committee in District 3, they have 5,000 companies listed but can manage only 2,800, which are registered at the tax department and regularly make updates.

Thousands of companies have been established in the last several years, only for the purpose of showing the financial status of the owners so that their children can study abroad. These companies still exist to date, because the owners do not have time to complete death declaration procedures.

The People’s Committee in District 12 said that they have licensed nearly 8,000 businesses last year, but only half of them are operating at present.

According to regulations, businesses must inform authorized organs for adjusting licenses or for new licenses when they change address or open branches. However, only few follow these procedures. This has caused much difficulty for the local administration.

The People’s Committee in District 1 said that they can only manage one third of the 10,000 businesses that have been licensed. Earlier, businesses must register at the people’s committees of wards or communes where they are located. Now this regulation has been done away with.

Vo Khac Thai, deputy chairman of the People’s Committee in District 3, said that they can inspect a maximum of 250 companies a year or 20 a month.

Before inspection, they have to establish a team including members from the district Department of Tax, Department of Economics, Finance and Planning and people’s committees in wards.

The inspection date must be informed to businesses three days in advance. This is not easy because it usually takes a lot of time to find addresses of businesses to send them necessary documents. Sometimes officials have to visit three to four times but cannot meet representatives of companies because they close their doors on them.

Mr. Thai said that district authorities are not permitted to revoke licenses of these businesses and can only issue a maximum fine of VND1 million.

Bogus offices

Introduced by a tourist company, Saigon Giai Phong reporters arrived at the headquarter of May Trang Trade, Service and Tourism Company, located on the 6th floor in Master Building, 41-43 Tran Cao Van, Ward 6, District 3.

The building management cannot remember names and numbers of companies that have registered so far, because the information changes everyday.

A staff there gave the reporters business cards of her company, called Professional Service Office Consultancy Corporation (PSO), which hires out space and address.

The PSO space is nearly 100 square meters, which they hire from the building owner and let it out to other businesses.

PSO now lets the space out to more than 300 companies. Those just hiring the address pay VND550,000 a month. Those wanting their names to appear on the board of PSO will pay VND990,000 a month.

They will pay VND1,430,000 a month to PSO to display their names together with telephone and fax numbers; and VND1,870,000 a month for the above services, in addition to a phone receptionist. Companies can also have a two square meter office for VND4 million a month.

Some businesses visit their offices a couple of times a month while most do that only once a month and then never return.

By staff writers – Translated by Hai Mien

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