Post-registration inspection in business registration: The relationship between remedial measures and administrative sanctions 

As of July 1, 2025, Decree No. 168/2025/ND-CP (“Decree 168”) officially comes into effect, replacing Decree No. 01/2021/ND-CP on business registration. With the notable introduction of a post-registration inspection mechanism, this new legal instrument is expected to enhance the effectiveness of state management over enterprises in the post-licensing stage. However, the emergence of a new regulatory tool inevitably raises questions regarding its interaction with existing regulations, particularly Decree No. 122/2021/ND-CP (“Decree 122”) on administrative sanctions.  

What is the relationship between these two Decrees? When is an inaccuracy in the registration dossier considered merely a matter for remedial action, and when does it constitute an administrative violation subject to penalties? Clarifying this distinction is key to ensuring that the law is applied fairly, transparently, and effectively. 

1. Post-registration inspection – An extension of State regulatory authority 

Decree 168 assigns a new role to the Business Registration Office (“BRO”). No longer merely a licensing authority, the BRO is now also responsible for monitoring the accuracy of corporate information throughout the business lifecycle. 

Pursuant to Article 63 of Decree 168, if the BRO discovers that information declared in the registration dossier is false or inaccurate, it shall be vested with the following powers: 

1. Notice of certificate invalidation: The BRO may issue a notice declaring that the enterprise registration certificate (ERC) is no longer legally effective and publish this notice on the National Business Registration Portal. This serves as an immediate preventive measure to prohibit the use of an invalid ERC in transactions.

1. Remedial instruction: The BRO may provide the enterprise with a 30-day period to submit a new, accurate registration dossier. This gives the enterprise an opportunity to correct errors voluntarily, avoiding more severe sanctions. 

1. Referral to relevant authorities: Where signs of legal violations are found, the BRO may coordinate with and refer the matter to the tax authorities, the police, or other competent regulatory bodies for further action. 

This mechanism functions as a post-registration legal safeguard, aimed at preventing the establishment of shell companies, the use of fraudulent documents, or the impersonation of legal representatives. Its nature is remedial and procedural, intended to preserve the integrity of data in the National Business Registration Database, rather than to impose punitive measures. 

2. Drawing the Line: When Does “Remedial Action” Become a “Sanctionable Offense”? 

While Decree 168 addresses procedural aspects and remedial measures, Decree 122 serves as the enforcement tool, imposing administrative sanctions on violations relating to business registration.  

However, a finding of error through post-registration inspection does not automatically trigger administrative penalties under Decree 122. Sanctions are only applicable if the enterprise’s conduct meets the legal elements of an administrative violation, and if the matter is handled by a competent sanctioning authority (e.g., the Inspectorate of the Department of Finance). 

For instance, if an enterprise submits false or inaccurate information, it may be subject to penalties under Article 43 of Decree 122, which prescribes a fine of VND 20,000,000 to 30,000,000 in the following cases: 

1. The enterprise fails to submit a new dossier within the 30-day period specified in Article 63 of Decree 168; 
2. The behavior shows intentional deceit or systematic fraudulent conduct; 
3. The enterprise continues to use an invalidated ERC despite formal notification. 

Notably, Article 63 of Decree 168 focuses on procedural compliance, not on administrative liability. It does not constitute a conclusion of violation under Decree 122 unless the case is escalated and sanctioned by a competent authority. This division of powers, however, creates potential conflicts in jurisdiction: while the BRO can detect and refer cases, only inspection bodies may issue formal sanction decisions. Without a clear mechanism for inter-agency cooperation, there is a risk of overlapping authority or evasion of responsibility. 

The post-registration inspection regime under Decree 168 represents a modernized approach to state governance, shifting from pre-emptive control to continuous supervision and remedial intervention. It complements rather than contradicts the sanctioning framework of Decree 122, forming a two-tiered enforcement system: 

• Tier 1: Procedural remediation via the BRO; 

• Tier 2: Administrative penalties imposed by competent authorities. 

However, for this system to operate efficiently, it is imperative to clearly define the roles and responsibilities of each body, and to establish an effective inter-agency coordination protocol. Only then can the post-registration inspection mechanism function as an effective filter, contributing to a transparent, fair, and sustainable business environment. 

Date Written: 20/07/2025

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