Vietnam - Foreign Invested Enterprise Is Only Allowable To Perform The Trading Of Goods Activities After Obtaining The Business Licenses.
Legal News & Analysis - Asia Pacific - Vietnam - Corporate/M&A
4 April, 2016
Recently, many questions arose in relation to the regulations on foreign investors making capital contribution, acquisition of shares and capitals in Vietnam enterprises to perform trading of goods activities and activities directly relating to the trading of goods.
Opinions of the Ministry of Industry and Trade as per the Official Letter No. 12933/BCT- KH dated December 18th, 2015 for your reference as follows:
1- Legal basis:
Investments of foreign investors via capital contribution, acquisition of shares and capitals in Vietnam enterprises must be made in accordance to the Law on Investment No. 67/2014/QH13 and Decree No. 118/2015/ND-CP stipulating details and guidance on the implementation of some articles in the Law on Investment. In addition to the compliance requirements with the Investment Law, the contribution of capital, acquisition of shares and capitals must also follow the Vietnam’s commitments and reserves in International Agreements.
2 - Trading of goods activities and activities directly relating to the goods trading of goods (hereinafter referred to as trading of goods activities) of foreign investors are in the list of Investment Sectors with Conditions.
Therefore, in order for the foreign invested enterprises (including those that become foreign invested enterprises through the capital contribution, share acquisition of foreign investors) to perform the trading of goods activities, they must satisfy all the conditions and comply with the registration procedure to apply for the Business Licenses in accordance with the Ministry of Industry and Trade’s legal documents.
In this Official Letter, the Ministry of Industry and Trade confirms that: Foreign Invested Enterprise is only allowable to perform the trading of goods activities after obtaining the Business Licenses.
3 - The Ministry of Industry and Trade is currently in charge of the implementation of changes and supplements to Decree No. 23/2007/ND-CP following the Prime Minister’s guidance in the Resolution No. 59/NQ-CP dated August 7th, 2015 of the Government.
Therefore, with respects to issues of foreign investor making capital contribution, acquisition of shares and capitals in Vietnam enterprises to perform trading of goods activities, the Ministry of Industry and Trade will continue providing guidance to the related State Authorities after the amended Decree No. 23/2007/ND-CP is issued and taken into effect.