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Friday, October 22, 2021

Ecommerce to become conditional business for foreign investors in Vietnam

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HANOI – Foreign investors will have to comply with Vietnam’s new regulations on operating ecommerce trading platforms as ecommerce will become a conditional sector for foreign investors in Vietnam, according to the Government’s Decree 85.

The Government has issued Decree 85 amending and supplementing some articles in the previous Decree 52 released in 2013 on ecommerce. Decree 85 will come into force on January 1 next year.

Under Decree 85, foreign investors that want to tap the local ecommerce market must meet the following conditions: they must provide ecommerce services in Vietnam as stipulated under terms 1 and 2, Article 21, of the Law on Investment; foreign investors with a dominant stake in one or more enterprises in the group of the top five ecommerce operators in Vietnam would have to obtain national security clearance from the Ministry of Public Security. These top five ecommerce operators will be recognized based on criteria such as the number of visits, sellers, transactions and the transaction value.

Foreign investors that invest in small and medium enterprises (SMEs) in line with the country’s regulations on supporting SMEs do not have to seek clearance from the Ministry of Public Security.

The decree also stipulates that foreign investors are considered a dominant stake holder in ecommerce service providers if the investor owns more than 50% of charter capital or over 50% of voting shares of the enterprise; if they are directly involved in making decisions to appoint, dismiss, or sack a majority or all members of the management board, chairman of the members’ council, director or general director of the enterprise; and if they have the right to make important business decisions of the enterprise.

According to the above-mentioned decree, foreign traders and organizations that set up websites with Vietnamese domain names or in the Vietnamese language or establish ecommerce trading platforms with 100,000 transactions annually from Vietnam would have to register ecommerce activities with the authorities and establish their representative offices in Vietnam or appoint their representatives in the country.

Foreign traders, organizations that operate websites offering ecommerce services in Vietnam have to coordinate with State agencies to prevent the illegal transaction of goods and services, fulfill their roles to protect consumers and ensure the quality of products in line with Vietnam’s laws, as well as make reports to the competent agencies.

Further, import and export items traded on ecommerce platforms have to undergo customs procedures on par with the customs laws.

By Van Ly

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