Goods trading and activities directly related to goods trading are considered a “conditional” business for foreign investment in Vietnam, meaning the market is open to foreign investors provided they meet certain conditions. This area was governed for more than 10 years by Decree No. 23/2007/ND-CP (Decree 23), which was in line with the old 2005 Investment Law and gradually became out-of-date, especially when the new 2014 Investment Law took effect on July 1, 2015. Given this fact, on January 15, 2018, Decree No. 09/2018/ND-CP (Decree 9) was issued and took immediate effect, replacing Decree 23 as the primary legal basis for foreign investment in goods trading in Vietnam. Decree 9 provides many significant changes in line with the 2014 Investment Law for foreign investors and their wholly set-up foreign invested enterprises (FIEs). Some of the key changes are summarized below.
Single authority for licensing. Under Decree 9, the local Department of Industry and Trade (DOIT) has become the sole licensing authority for licensing matters in goods trading. The DOIT is also responsible for liaising with and seeking consultations from the Ministry of Industry and Trade (MOIT) in any application dossiers required in- principle approvals from the MOIT. Though this is an internal working process between the DOIT and the MOIT, the relevant foreign investor or FIEs will be kept updated.
Some sub-license requirements removed. Under Decree 23, to engage in import, export and wholesale of goods, FIEs were required to have such activities with specific HS codes of the traded goods recorded in the Investment Registration Certificate, or separately in a sub-license called a Trading License (a.k.a. Business License). Furthermore, Decree 23 regulated that the in-principle approval from the MOIT was a must in case of granting wholesale rights to FIEs. Decree 9 relaxes these requirements. Accordingly, specific HS codes of traded goods are no longer recorded in the Investment Certificate and provided that the FIEs have rights to conduct import, export and wholesale of goods recorded in their Investment Registration Certificates as the enterprises’ business lines, they are entitled to legally do such activities without a Trading License, for any kinds of goods that are not in the list of products/goods prohibited from being imported and distributed in Vietnam. Decree 9 reserves the Trading License requirement for the import and wholesale of oil and lubricants only.