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1 November 2024

E Commerce And Decree 85 – What You Must Know

DM
Duane Morris LLP

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Overview of Decree 85/2021 regarding e-commerce on social networks...
Vietnam Consumer Protection

Overview of Decree 85/2021 regarding e-commerce on social networks

Effective from January 1, 2022, Decree 85/2021 provides significant amendments impacting foreign investors in Vietnam's e-commerce sector, particularly in areas involving social networks that facilitate transactions between businesses and consumers. Below, we summarize key provisions affecting e-commerce operations via social networks

Social network as e-commerce trading platform

Under Decree 85/2021, a social network is classified as an e-commerce trading platform if it meets the following criteria:

  1. Platform Activities: The network allows users to (i) open online shops to display or introduce goods/services, (ii) open accounts to contract with customers, or (iii) host shopping sections where users post sales information.
  2. Payment of Fees: Users on the platform, directly or indirectly, pay fees to engage in the activities above.

Responsibilities of E-commerce Trading Platform Providers

Registration for e-commerce trading platform. To provide e-commerce services in Vietnam, foreign entities must register with the Ministry of Industry and Trade. Without its commercial presence in Vietnam, these entities must establish a representative office or appoint an authorized representative in the country.

E-commerce trading platform obligations. Decree 85/2021 outlines critical responsibilities for e-commerce platforms, including:

  1. Regulatory Contact Point: Designate a contact to receive and respond to regulatory information requests about legal violations, with a 24-hour response time.
  2. Representation of Foreign Sellers: Represent foreign sellers on the platform in consumer complaint resolution and notify tax obligations for these sellers.
  3. Consumer Complaint Handling: Act as a point of contact for consumer complaints in transactions involving multiple parties.
  4. Order Record Retention: Retain records of orders as required by the Law on Accounting.
  5. Liability for Damages: Jointly compensate for damages arising from failure to address legal violations on the platform.

Market access conditions for foreign investors in e-commerce trading platform

For foreign investors aiming to establish a commercial presence, Decree 85/2021 imposes two conditions

  1. Investment Forms: Foreign investors may only invest through a new or existing company in Vietnam, with other structures (e.g., business cooperation contracts) not permitted; and
  2. National Security Appraisal: If the foreign investor holds control over one or more of the top five e-commerce companies in Vietnam (as identified by the Ministry of Industry and Trade), an appraisal by the Ministry of Public Security is required.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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