Decree No. 23/2007/ND-CP dated February 12, 2007 of the Government detailing the Commercial Law regarding goods purchase and sale activities or goods purchase and sale related activities of foreign-invested enterprises in Vietnam

DECREE

DETAILING THE COMMERCIAL LAW REGARDING GOODS PURCHASE AND SALE ACTIVITIES OR GOODS PURCHASE AND SALE RELATED ACTIVITIES OF FOREIGN-INVESTED ENTERPRISES IN VIETNAM

THE GOVERNMENT

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

Pursuant to the June 14, 2005 Commercial Law;

At the proposal of the Minister of Trade,

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1.- Governing scope

This Decree details the Commercial Law regarding goods purchase and sale activities or goods purchase and sale related activities of foreign-invested enterprises in Vietnam.

Article 2.- Subjects of application

This Decree applies to foreign-invested enterprises, and organizations and individuals involved in the management of goods purchase and sale activities or goods purchase and sale related activities of foreign-invested enterprises in Vietnam.

Article 3.- Interpretation of terms

In this Decree, the terms below are construed as follows:

1. Goods purchase and sale activities or goods purchase and sale related activities means import, export, distribution and other activities specified in Chapters IV, V and VI of the Commercial Law.

2. Import and export means activities specified in Article 28 of the Commercial Law.

3. Right to export means the right to purchase goods in Vietnam for export, including the right to have one's name written in the exports declaration in order to carry out, and take responsibility for, export-related procedures. The right to export excludes the right to establish a network for purchasing goods in Vietnam for export, unless otherwise provided for by Vietnamese law or treaties to which the Socialist Republic of Vietnam is a contracting party.

4. Right to import means the right to import goods from foreign countries into Vietnam for sale to traders that have the right to distribute those goods in Vietnam; the right to import includes the right to have one's name written in the imports declaration in order to carry out, and take responsibility for, import-related procedures. The right to import excludes the right to establish, or participate in, a goods distribution system in Vietnam, unless otherwise provided for by Vietnamese law or treaties to which the Socialist Republic of Vietnam is a contracting party.

5. Distribution means activities of goods whole-sale, retail, purchase and sale agency, and commercial franchise as provided for by Vietnamese law.

6. Right to distribution means the right to directly conduct distribution activities.

7. Wholesale means the sale of goods to traders or other organizations, excluding the sale of goods directly to the end consumer.

8. Retail means the sale of goods directly to the end consumer.

9. Retail establishment means an enterprise-owned unit that retails goods.

Article 4.- Conditions for a foreign-invested enterprise to be granted a permit for dealing in goods purchase and sale activities or goods purchase and sale related activities in Vietnam

1. Conditions for a foreign-invested enterprise to be granted a permit for dealing in goods purchase and sale activities or goods purchase and sale related activities in Vietnam include:

a/ Being an investor from a country or territory which has acceded to a treaty to which the Socialist Republic of Vietnam is a contracting party and under which Vietnam has committed to open its market for goods purchase and sale activities or goods purchase and sale related activities;

b/ Making investment in a form conformable with the roadmap already committed in treaties to which the Socialist Republic of Vietnam is a contracting party and compliant with Vietnamese law;

c/ Dealing in goods or services in accordance with Vietnam's market-opening commitments and Vietnamese law;

d/ Operating within a scope compliant with Vietnam's market-opening commitments and Vietnamese law;

e/ Obtaining approval from a competent state agency defined in Article 5 of this Decree.

2. The Minister of Trade shall announce the roadmap already committed in treaties to which the Socialist Republic of Vietnam is a contracting party and the conditions specified in Clause 1 of this Article.

3. For foreign investors not defined at Point a, Clause 1 of this Article, before a competent agency grants a business permit, the Minister of Trade shall, on a case-by-case basis, consider and approve goods purchase and sale activities or goods purchase and sale related activities.

Article 5.- Competence to grant a permit for dealing in goods purchase and sale activities or goods purchase and sale related activities and a permit for setting up a retail establishment

1. Provincial-level People's Committees shall grant permits for dealing in goods purchase and sale activities or goods purchase and sale related activities (below referred to as business permits for short) to foreign-invested enterprises already granted investment certificates or investment licenses (collectively referred to as investment certificates) after obtaining the Trade Ministry's written approval.

2. A foreign investor that invests in goods purchase and sale activities or goods purchase and sale related activities in Vietnam for the first time shall submit the dossier for carrying out investment procedures to the investment-managing state agency. This agency shall consult the Ministry of Trade and grant investment certificates for goods purchase and sale activities or goods purchase and sale related activities only after obtaining the Trade Ministry's written approval. In this case, the investment certificate is as valid as the business permit. Investment procedures shall be carried out in accordance with the Investment Law.

3. When a foreign investor invests in import or export activities only or when a foreign-invested enterprise applies for additional import or export activities only but not for goods distribution or goods purchase and sale activities or goods purchase and sale related activities, the investment-managing state agency shall, based on the market-opening roadmap committed in treaties to which the Socialist Republic of Vietnam is a contracting party, grant or supplement the investment certificate without having to obtain the Trade Ministry's approval.

4. A foreign-invested enterprise which already has the right to distribution may set up the first retail establishment without having to carry out the procedures for application for a permit up for setting up a retail establishment according to the provisions of this Decree. The provincial-level People's Committee shall, under the Trade Ministry's guidance, decide on the setting up of other retail establishments, in addition to the first one, according to the order and procedures specified in this Decree.

Article 6.- Observance of relevant provisions of law

1. Apart from the rights and obligations defined in this Decree, foreign-invested enterprises shall also observe the provisions of the Enterprise Law, the Investment Law and relevant laws.

2. When activities specified in Chapters IV, V and VI of the Commercial Law are governed by another Decree, the provisions of that Decree prevail.

3. When carrying out the procedures for grant, re-grant or modification of business permits or permits for setting up retail establishments, foreign-invested enterprises shall pay fees according to the Finance Ministry's regulations.

4. When necessary, foreign-invested enterprises are obliged to report or supply documents on, or explain issues related to their activities at the request of competent state management agencies according to Vietnamese law.

Chapter II

PROCEDURES FOR GRANT OF A BUSINESS PERMIT

Article 7.- Dossier of application for a business permit

1. A written application for a business permit, made according to a form set by the Trade Ministry.

2. A written explanation about the satisfaction of conditions set at Points a, b, c and d, Clause 1, Article 4 of this Decree.

3. Planned goods purchase and sale activities and goods purchase and sale related activities of the enterprise.

4. A copy of the investment certificate.

Article 8.- Process of granting a business permit

1. An enterprise shall submit 03 sets of dossier, including 01 original, to the People's Committee of the province or centrally run city where the enterprise is headquartered.

2. Within 03 working days after receiving the dossier, the dossier-receiving agency shall verify the validity of the dossier and send that dossier to the Trade Ministry for comments. If the dossier is invalid, the dossier-receiving agency shall notify in writing the investor of such invalidity for modification of the dossier.

3. Within 15 working days after receiving the dossier, the Trade Ministry shall send its written comments on issues falling within its management competence.

4. Within 15 working days after receiving the Trade Ministry's comments, the provincial-level People's Committee shall decide to grant a business permit.

If refusing to grant a business permit, the dossier-receiving agency shall notify in writing the enterprise of such refusal and clearly state the reasons therefor.

5. Within 07 working days after granting a business permit, the dossier-receiving agency shall send copies of that permit to the Trade Ministry and the People's Committee of the province or centrally run city where the enterprise is headquartered.

Article 9.- Contents and valid duration of a business permit

1. Contents of a business permit cover:

a/ Name and address of the head office of the enterprise;

b/ Goods purchase and sale activities or goods purchase and sale related activities as stipulated in Article 12 of this Decree;

c/ Validity duration of the business permit.

2. For cases defined in Article 5 of this Decree, the validity duration of the business permit shall be the same as the investment project's operation duration written in the investment certificate.

Article 10.- Modification of a business permit

1. A foreign-invested enterprise shall carry out the procedures for modification of the business permit at the business permit-granting agency if wishing to modify one of the contents specified at Point or b, Clause 1, Article 9 of this Decree.

2. A dossier of application for the modification of a business permit comprises:

a/ A written application for modification of the business permit, made according to a form set by the Trade Ministry;

b/ A copy of the granted business permit.

3. Within 10 working days after receiving the enterprise's complete and valid dossier as stipulated in Clause 2 of this Article, the business permit-granting agency shall modify the business permit if such application for modification complies with Vietnamese law and treaties to which the Socialist Republic of Vietnam is a contracting party. If refusing to modify the business permit, the business permit-granting agency shall notify in writing the enterprise of such refusal and clearly state the reasons therefor.

4. When receiving the modified business permit, the enterprise shall turn in the original of the old business permit to the business permit-granting agency.

Article 11.- Re-grant of a permit for dealing in goods purchase and sale activities or goods purchase and sale related activities

1. A business permit shall be re-granted when it is lost, torn, damaged, burnt, or otherwise destroyed.

2. When a business permit is lost, the enterprise shall report such loss to the Public Security agency of the locality where the permit is lost and to the business permit-granting agency and announce the loss on the mass media for three consecutive times. After 30 days from the date of the first-time announcement, the enterprise shall send an official letter requesting the business permit-granting agency to re-grant the permit.

3. A dossier of application for the re-grant of a business permit comprises:

a/ A written application for re-grant of the business permit, made according to a form set by the Trade Ministry;

b/ The Public Security agency's certification of the declaration of the loss of the business permit; a written explanation about the reasons why the permit is torn, damaged, burnt, or otherwise destroyed.

4. Within 07 working days after receiving the complete and valid dossier, the business permit-granting agency shall re-grant the business permit.

Article 12.- Goods purchase and sale activities or goods purchase and sale related activities

1. Goods purchase and sale activities or goods purchase and sale related activities of a foreign-invested enterprise must be specified in the business permit, specifically:

a/ Goods purchase and sale activities or goods purchase and sale related activities permitted to be carried out;

b/ Types of goods banned from trading with regard to each activity specified at Point a, Clause 1 of this Article;

c/ Goods purchase and sale related services permitted to be provided.

2. A foreign-invested enterprise may carry out only activities indicated in its business permit.

3. An enterprise may deal in goods or services which are by law subject to conditional business only when it fully meets the conditions provided for by Vietnamese law.

Chapter III

PROCEDURES FOR GRANT OF A PERMIT FOR SETTING UP A RETAIL ESTABLISHMENT

Article 13.- Dossier of application for setting up a retail establishment

1. A written application for setting up a retail establishment in Vietnam, made according to a form set by the Trade Ministry, indicating:

a/ Name and address of the head office of the enterprise;

b/ Name(s) and address(es) of the retail establishment(s) already set up;

c/ Name and address of the retail establishment to be set up;

d/ Activities of the retail establishment;

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

f/ Full name and signature of the representative at law of the enterprise.

2. A copy of the business permit.

Article 14.- Process of granting a permit for setting up a retail establishment

1. An enterprise shall submit 03 sets of dossier, including 01 original, to the People's Committee of the province or centrally run city where the retail establishment is planned to be located.

2. Within 03 working days after receiving the dossier, the dossier-receiving agency shall verify the validity of the dossier and send that dossier to the Trade Ministry for comments. If the dossier is invalid, the dossier-receiving agency shall notify in writing the investor of such invalidity for modification of the dossier.

3. Within 15 working days after receiving the dossier, the Trade Ministry shall send its written comments on issues falling within its management competence.

4. Within 15 working days after receiving the Trade Ministry's comments, the provincial-level People's Committee shall decide to grant the permit for setting up a retail establishment, When necessary, this time limit may be extended for no more than 30 days.

If refusing to grant a permit for setting up a retail establishment, the dossier-receiving agency shall notify in writing enterprise of such refusal and clearly state the reasons therefor.

5. Within 07 working days after granting a permit for setting up a retail establishment, the dossier-receiving agency shall send copies of such permit to the Trade Ministry and the People's Committee of the province or centrally run city where the enterprise is headquartered.

Article 15.- Contents and validity duration of a permit for setting up a retail establishment

1. Contents of a permit for setting up a retail establishment cover:

a/ Name and address of the head 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 or passport number, or other lawful personal identification papers of the head of the retail establishment;

e/ Validity duration of the permit.

2. For the case defined in Clause 4, Article 5 of this Decree, the validity duration of a permit for setting up a retail establishment shall be the same as that of the business permit.

Article 16.- Modification of a permit for setting up a retail establishment

1. Within 10 days after deciding to change any of the contents specified at Point a, b, c or d, Clause 1 of Article 15, a foreign-invested enterprise shall carry out the procedures for modification of a permit for setting up a retail establishment.

2. A dossier of application for the modification of a permit for setting up a retail establishment comprises:

a/ A written application for the modification of a permit for setting up a retail establishment, made according to a form set by the Trade Ministry, clearly indicating the to be-modified contents;

b/ A copy of the granted permit.

3. Within 10 working days after receiving the complete and valid dossier as stipulated in Clause 2 of this Article, the agency granting a permit for setting up a retail establishment shall modify that permit.

4. When receiving the modified permit, the foreign-invested enterprise shall turn in the original of the old permit to the permit-granting agency.

Article 17.- Re-grant of a permit for setting up a retail establishment

1. A foreign-invested enterprise shall be re-granted a permit for setting up a retail establishment when that permit is lost, torn, damaged, burnt, or otherwise destroyed.

2. The dossier and procedures for re-grant of a permit for setting up a retail establishment shall be the same as those for re-grant of a business permit as specified in Article 11 of this Decree.

Chapter IV

IMPLEMENTATION PROVISIONS

Article 18.- Handling of violations

1. Depending on the nature and severity of their violations, foreign-invested enterprises shall be administratively handled according to the law on handling of administrative violations. If committing serious violations, they shall have their business permits or permits for setting up retail establishments revoked.

2. When there are enough criminal elements in an act of violation, the violator shall be examined for penal liability according to law.

Article 19.- Implementation effect

This Decree takes effect 15 days after its publication in "CONG BAO."

Article 20.- Organization of implementation

1. The Ministry of Trade shall guide the implementation of this Decree.

2. The Ministry of Finance shall specify the levels and management of fees for grant, re-grant or modification of business permits or permits for setting up retail establishments.

3. Ministers, heads of ministerial-level agencies, heads of government-attached agencies, and presidents of provincial/municipal People's Committees shall implement this Decree.