DECREE NO. 23/2007/ND-CP DETAILING THE COMMERCE LAW ON THE ACTIVITIES OF PURCHASING AND SELLING GOODS AND RELATED ACTIVITIES DIRECTLY ASSOCIATED WITH THE PURCHASE AND SALE OF GOODS BY FOREIGN-INVESTED ENTERPRISES IN VIETNAM

DECREE

Regulations on the Law on Trade concerning the activities of buying and selling goods and related activities directly associated with the buying and selling of goods by foreign-invested enterprises in Vietnam.

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THE GOVERNMENT

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Pursuant to the Law on Trade dated June 14, 2005;

At the proposal of the Minister of Trade.

DECREE:

Chapter I:

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Decree provides detailed regulations on the Law on Trade concerning the activities of buying and selling goods and related activities directly associated with the buying and selling of goods by foreign-invested enterprises in Vietnam.

Article 2. Applicability

This Decree applies to foreign-invested enterprises, organizations, and individuals related to the management of activities of buying and selling goods and related activities directly associated with the buying and selling of goods by foreign-invested enterprises in Vietnam.

Article 3. Explanation of Terms

In this Decree, the following terms are understood as follows:

1. Activities of buying and selling goods and related activities directly associated with buying and selling goods include export, import, distribution, and other activities prescribed in Chapters IV, V, and VI of the Law on Trade.

2. Export, import are activities prescribed in Article 28 of the Law on Trade.

3. Right to export is the right to purchase goods in Vietnam for export, including the right to be named on the export declaration form to carry out and be responsible for procedures related to export. The right to export does not include the right to organize a network for purchasing goods in Vietnam for export, except where otherwise provided by Vietnamese law or international treaties to which the Socialist Republic of Vietnam is a party.

4. Right to import is the right to import goods from abroad into Vietnam for sale to traders who have the right to distribute such goods in Vietnam; including the right to be named on the import declaration form to carry out and be responsible for procedures related to import. The right to import does not include the right to organize or participate in a distribution system in Vietnam, except where otherwise provided by Vietnamese law or international treaties to which the Socialist Republic of Vietnam is a party.

5. Distribution is wholesale, retail, agency sales of goods, and franchising as prescribed by Vietnamese law.

6. Right to distribute is the right to directly carry out distribution activities.

7. Wholesale is the activity of selling goods to traders, organizations; excluding the activity of selling directly to end consumers.

8. Retail is the activity of selling goods directly to end consumers.

9. Retail outlet is a unit owned by the enterprise to carry out retail activities.

Article 4. Conditions for foreign-invested enterprises to be granted a Business License for activities of buying and selling goods and related activities in Vietnam. Male

1. Conditions for foreign-invested enterprises to be granted a Business License for activities of buying and selling goods and related activities in Vietnam include:

a) Being an investor from countries or territories participating in international treaties to which the Socialist Republic of Vietnam is a party and in which Vietnam has committed to opening its market regarding activities of buying and selling goods and related activities directly associated with buying and selling goods;

b) Investment forms consistent with the commitments made in international treaties to which the Socialist Republic of Vietnam is a party and consistent with Vietnamese law;

c) Goods and services for business consistent with Vietnam's market-opening commitments and consistent with Vietnamese law;

d) Scope of operations consistent with Vietnam's market-opening commitments and consistent with Vietnamese law;

đ) Approval by the competent state authority prescribed in Article 5 of this Decree.

2. The Minister of Trade shall be responsible for announcing the commitments made in international treaties to which the Socialist Republic of Vietnam is a party and specific conditions as prescribed in Clause 1 of this Article.

3. For foreign investors not falling under the provisions of point a clause 1 of this Article, before the competent authority grants a Business License, the Minister of Trade shall examine and approve the activities of buying and selling goods and related activities directly associated with buying and selling goods on a case-by-case basis.

Article 5. Competence to Issue Business Licenses for Trading Activities and Related Activities and Retail Establishment Licenses

1. The People's Committee of the province shall be responsible for issuing Business Licenses for trading activities and related activities directly connected to trading activities (hereinafter referred to as Business License) to foreign-invested enterprises that have been issued Investment Certificates or Investment Permits (collectively referred to as Investment Certificate) after obtaining written approval from the Ministry of Commerce.

2. In cases where foreign investors make their first investment in Vietnam in trading activities and related activities directly connected to trading activities, they shall submit application documents for investment procedures at the state management agency for investment. The state management agency for investment shall seek the opinion of the Ministry of Commerce and only issue Investment Certificates for trading activities and related activities if approved in writing by the Ministry of Commerce. In this case, the Investment Certificate shall have the same value as the Business License. Investment procedures shall be carried out in accordance with the provisions of the Investment Law.

3. In cases where foreign investors only invest in export and import business or foreign-invested enterprises only request to supplement export and import business without distribution or other activities directly related to trading activities, the state management agency for investment shall base on the market opening schedule stipulated in international treaties to which the Socialist Republic of Vietnam is a member to issue or supplement Investment Certificates without the approval of the Ministry of Commerce.

4. Foreign-invested enterprises that already have distribution rights may establish the first retail outlet without having to go through the procedure to apply for a Retail Establishment License as prescribed in this Decree. The establishment of additional retail outlets beyond the first retail outlet shall be decided by the People's Committee of the province in accordance with the guidance of the Ministry of Commerce and in accordance with the procedures and formalities stipulated in this Decree.

Article 6. Compliance with Relevant Legal Provisions

1. In addition to performing the rights and obligations as prescribed in this Decree, foreign-invested enterprises must also comply with the provisions of the Enterprise Law, the Investment Law, and other relevant laws.

2. In cases where the activities stipulated in Chapters IV, V, and VI of the Trade Law have been regulated by another Decree, the provisions of that Decree shall apply.

3. When carrying out procedures for issuing, reissuing, amending, or supplementing Business Licenses and Retail Establishment Licenses, foreign-invested enterprises must pay fees as prescribed by the Ministry of Finance.

4. In necessary cases, according to Vietnamese law, foreign-invested enterprises have the obligation to report, provide documents, or explain issues related to their operations upon the request of competent state management agencies.

Chapter II:

PROCEDURES FOR ISSUING BUSINESS LICENSES

Article 7. Documents for Application for Business License

1. A written application for a Business License in the format prescribed by the Ministry of Commerce.

2. An explanation of compliance with the conditions specified in points a, b, c, and d of Clause 1, Article 4 of this Decree.

3. The content of the enterprise's planned trading activities and related activities directly connected to trading activities.

4. A copy of the Investment Certificate.

Article 8. Procedure for Issuing Business License

1. The enterprise shall submit three sets of application files, including one original set to the People's Committee of the province where the enterprise's main office is located.

2. Within three working days from the date of receiving the application file, the agency receiving the application shall check the validity of the application file and forward it to the Ministry of Trade for comments. In case the application file is invalid, the agency receiving the application shall notify the investor in writing to amend and supplement the application file.

3. Within fifteen working days from the date of receiving the application file, the Ministry of Trade shall provide comments in writing on issues within its management functions.

4. Within fifteen working days from the date of receiving the comments of the Ministry of Trade, the People's Committee of the province shall decide on issuing the Business License.

In case the Business License is not issued, the agency receiving the application must notify in writing and specify the reasons to the enterprise.

5. Within seven working days from the date of issuing the Business License, the agency receiving the application shall send a copy of the Business License to the Ministry of Trade and the People's Committee of the province where the enterprise's main office is located.

Article 9. Content and Validity Period of Business License

1. The content of the Business License includes:

a) Name and address of the main office of the enterprise;

b) Content of trading goods and related activities directly related to trading goods as stipulated in Article 12 of this Decree;

c) Validity period of the Business License.

2. For cases prescribed in Article 5 of this Decree, the validity period of the Business License is equal to the duration of operation of the investment project recorded in the Investment Certificate.

Article 10. Amendment and Supplement to Business License

1. Foreign-invested enterprises must complete procedures to amend and supplement the Business License at the issuing authority when there is a request to change one of the contents prescribed in point a and point b, Clause 1, Article 9 of this Decree.

2. The application file for amending and supplementing the Business License includes:

a) A request for amendment and supplementation of the Business License according to the form of the Ministry of Trade;

b) A copy of the Business License that has been issued.

3. Within ten working days from the date of receiving a complete and valid application file of the enterprise as prescribed in Clause 2 of this Article, the issuing authority shall be responsible for amending and supplementing the Business License if the request for amendment and supplementation is in accordance with Vietnamese laws and international treaties to which the Socialist Republic of Vietnam is a member. In case of refusal to amend and supplement the Business License, the issuing authority must notify the enterprise in writing and specify the reasons.

4. When receiving the amended and supplemented Business License, the enterprise must return the original Business License to the issuing authority.

Article 11. Reissuing Business License for Trading Goods and Related Activities Directly Related to Trading Goods

1. The Business License shall be reissued in case it is lost, torn, damaged, burned, or destroyed in other forms.

2. In case the Business License is lost, the enterprise must report to the police station where the license was lost, the issuing authority of the Business License, and announce in the mass media three times consecutively. After thirty days from the date of the first announcement, the enterprise shall issue a letter requesting the issuing authority to reissue the Business License.

3. The application file for reissuing the Business License includes:

a) A request for reissuing the Business License according to the form of the Ministry of Trade;

b) Confirmation from the police station regarding the report of loss of the Business License; explanation of the reason for tearing, damage, burning, or destruction in other forms.

4. Within seven working days from the date of receiving a complete and valid application file, the issuing authority shall be responsible for reissuing the Business License.

Article 12. Content of trading activities and related activities directly linked to trading activities

1. The content of trading activities and related activities directly linked to trading activities of foreign-invested enterprises must be specifically stipulated in the Business Registration Certificate, including:

a) Trading activities and related activities directly linked to trading activities that are permitted to carry out;

b) Types of goods not allowed to trade for each activity mentioned in point a, Clause 1 of this Article;

c) Types of services directly related to trading activities that are carried out.

2. Foreign-invested enterprises may only conduct activities consistent with the content recorded in the Business Registration Certificate.

3. In cases where trading goods and services require conditions under the law, enterprises are only permitted to trade when they meet the conditions prescribed by Vietnamese law.

Chapter III:

PROCEDURES FOR ISSUING BUSINESS LICENSES FOR RETAIL ESTABLISHMENTS

Article 13. Documents for establishing retail establishments

1. A proposal document for establishing a retail establishment in Vietnam according to the model of the Ministry of Trade, including the following contents:

a) Name and address of the main office of the enterprise;

b) Name and address of existing retail establishments;

c) Name and address of the planned retail establishment;

d) Activities of the retail establishment;

đ) Full name, place of residence, identity card number or passport number or other lawful personal identification of the head of the retail establishment;

e) Full name, signature of the legal representative of the enterprise.

2. Copy of the Business Registration Certificate.

Article 14. Procedure for issuing business licenses for retail establishments

1. Enterprises submit three sets of documents, including one original set to the People's Committee of the province where the retail establishment is planned to be located.

2. Within three working days from the date of receiving the application file, the agency receiving the application shall check the validity of the application file and forward it to the Ministry of Trade for comments. In case the application file is invalid, the agency receiving the application shall notify the investor in writing to amend and supplement the application file.

3. Within fifteen working days from the date of receiving the application file, the Ministry of Trade shall provide comments in writing on issues within its management functions.

4. Within fifteen working days from the date of receiving comments from the Ministry of Trade, the People's Committee of the province decides on issuing the business license for the retail establishment. If necessary, this period may be extended but not exceeding thirty days.

In case the business license for the retail establishment is not issued, the agency receiving the documents must notify the enterprise in writing and specify the reasons.

5. Within seven working days from the date of issuance of the business license for the retail establishment, the agency receiving the documents sends a copy of the business license for the retail establishment to the Ministry of Trade and the People's Committee of the province where the enterprise's headquarters is located.

Article 15. Content and validity period of the business license for retail establishments

1. The content of the business license for retail establishments includes:

a) Name and address of the main office of the enterprise;

b) Name and address of the retail establishment;

c) Activities of the retail establishment;

d) Full name, place of residence, identity card number or passport number or other lawful personal identification of the head of the retail establishment;

đ) Validity period of the business license for the retail establishment.

2. In cases provided for in Clause 4, Article 5 of this Decree, the validity period of the business license for the retail establishment is equal to the validity period of the Business Registration Certificate.

Article 16. Amending and supplementing the business license for retail establishments

1. Within ten days from the date of deciding to change one of the contents specified in point a, b, c, d, Clause 1 of Article 15, foreign-invested enterprises must complete procedures to amend and supplement the business license for the retail establishment.

2. Documents for amending and supplementing the business license for the retail establishment include:

a) A proposal document for amending and supplementing the business license for the retail establishment according to the model of the Ministry of Trade, clearly stating the amended and supplemented contents.

b) Copy of the business license for the retail establishment already issued.

3. Within ten working days from the date of receiving complete valid documents as stipulated in Clause 2 of this Article, the agency issuing the business license for the retail establishment is responsible for amending and supplementing the business license for the retail establishment.

4. When receiving the new business license for the retail establishment that has been amended and supplemented, foreign-invested enterprises must return the original business license for the retail establishment to the agency issuing the business license for the retail establishment.

Article 17. Reissuing the Retail Establishment Permit

1. A foreign-invested enterprise shall be reissued the Retail Establishment Permit in cases where it is lost, torn, damaged, burned, or destroyed in another manner.

2. The dossier and procedures for reissuing the Retail Establishment Permit shall be carried out in accordance with the regulations on reissuing the Business Permit as stipulated in Article 11 of this Decree.

Chapter IV:

IMPLEMENTING PROVISIONS

Article 18. Handling violations

1. Depending on the nature and degree of violation, a foreign-invested enterprise may be subject to administrative sanctions in accordance with the laws on handling administrative violations. In cases of serious violations, the Business Permit and the Retail Establishment Permit may be revoked.

2. If the violation constitutes a criminal offense, the violator shall be held criminally liable in accordance with the provisions of the law.

Article 19. Effective Date

This Decree shall take effect fifteen days after its publication in the Official Gazette.

Article 20. Implementation

1. The Ministry of Trade shall be responsible for guiding the implementation of this Decree.

2. The Ministry of Finance shall specify the levels and management of fees for issuing, reissuing, amending, and supplementing the Business Permit and the Retail Establishment Permit.

3. Ministers, Heads of ministerial-level agencies, Heads of agencies under the Government, Chairpersons of provincial People's Committees directly under the Central Government are responsible for implementing this Decree./.