A wholly foreign-owned business manufactures in Vietnam. Now, it would like to export production-line materials purchased in Vietnam to other countries. The question is whether a 100% foreign-owned company can add "import and export" as a business line. 

Short answer: Yes, but subject to the "evaluation" process of the licensing authority.

  • Trading (import and export) is open to 100% foreign-owned companies in Vietnam, except for trading of very specific products, such as oil, cigarettes, and publications.1However, "import and export" belong to the group of "conditional" business sectors for foreign investment. Foreign investors have to go through an "evaluation" licensing process to add a "conditional" business line to their investment certificates.
  • The Licensing Authority2can decide whether to seek guidance from other State bodies with respect to the "investment conditions". If so, the licensing process may become lengthy and complicated.
  • The Licensing Authority has broad discretion to demand various information to assess the company's financial strength, experience or management skills.
  • In extreme cases, the company should ask the Licensing Authority to issue a written statement regarding the legal basis for requiring extensive documentation and delaying approval. Similarly, the company could also escalate to the Ministry of Planning and Investment for a resolution.

Footnotes

1.Implementing Vietnam's WTO service sector commitments with regards trading and distribution the new Circular No. 34/2013/TT-BCT will take effect on 5 February 2014 and sets out the products prohibited and restricted from export, import, and distribution by foreign invested enterprises. Circular 34 replaces Decision No.10/2007/QD-BTM dated 21 May 2007.

2.The licensing authority can be either the provincial People's Committee or the Board of Management of an industrial zone or economic zone where your investment project is located (collectively, the "Licensing Authority").

Duane Morris assists foreign investors in Vietnam and beyond to prepare business applications and to liaise with the authorities to overcome potential obstacles. 

For further information, please contact Giles T. Cooper, Hoang Minh Duc or Manfred Otto. For inquiries in Japanese, please contact japanese@duanemorris.com.

This article is for general information and does not include full legal analysis of the matters presented. It should not be construed or relied upon as legal advice or legal opinion on any specific facts or circumstances. The description of the results of any specific case or transaction contained herein does not mean or suggest that similar results can or could be obtained in any other matter. Each legal matter should be considered to be unique and subject to varying results. The invitation to contact the authors or attorneys in our firm is not a solicitation to provide professional services and should not be construed as a statement as to any availability to perform legal services in any jurisdiction in which such attorney is not permitted to practice.

Duane Morris LLP, a full-service law firm with more than 700 attorneys in 24 offices in the United States and internationally, offers innovative solutions to the legal and business challenges presented by today's evolving global markets. Duane Morris LLP, a full-service law firm with more than 700 attorneys in 24 offices in the United States and internationally, offers innovative solutions to the legal and business challenges presented by today's evolving global markets. The Duane Morris Institute provides training workshops for HR professionals, in-house counsel, benefits administrators and senior managers.