Trade in goods and activities directly related to trade in goods of foreign service providers in Vietnam

–

Franchise Service

Measures that apply to all sub-sectors in distribution services: Tobacco and cigars, books, newspapers and magazines, videotapes, precious metals and gems, pharmaceuticals[1], explosives, crude and processed oils, rice, cane and beet sugar are excluded from the scope of the commitments.

1.1. Distribution services include:

1. i) Commission agency service (CPC 621, 61111, 6113, 6121)
2. ii) Wholesale service (CPC 622, 61111, 6113, 6121)

iii) Retail services (CPC 631 + 632, 61112, 6113, 6121).

The establishment of retail establishments (other than the first) will be considered on the basis of an economic needs test (ENT)[2]. Particularly for CPTPP and EVFTA, 5 years after the Agreement comes into effect, the economic needs test will be abolished and this reservation will expire.

1.2. Franchise service (CPC 8929): unlimited. Allow the establishment of branches. The head of the branch must be a permanent resident in Vietnam.

2. Law of Vietnam

Clause 1, Article 3 of Decree No. 09/2018/ND-CP stipulates goods trading activities and activities directly related to goods trading, including the following activities:

a) Exercising exportation right;

b) Exercising importation right;

c) Exercising distribution right;

d) Providing commercial appraisal service;

dd) Providing logistics services;

e) Good rental, excluding finance lease;

g) Providing commercial promotion services, excluding advertising services;

h) Providing commercial intermediary services;

i) Providing electronic commerce services;

k) Providing bid-holding services.

– Regarding distribution of pharmaceuticals: Establishments that have the right to import but are not allowed to exercise the right to distribute drugs and medicinal ingredients in Vietnam, are not allowed to carry out activities directly related to the distribution of drugs and medicinal ingredients in Vietnam, except for drugs and medicinal ingredients manufactured in Vietnam by the establishment itself (Clause 10, Article 91 of Decree No. 54/2017/ND-CP).

– Commercial Law 2005

– Law on Foreign Trade Management 2017

– Decree No. 09/2018/ND-CP dated January 15, 2018 of the Government detailing the Commercial Law and the Law on Foreign Trade Management on goods purchase and sale activities and activities directly related to the purchase and sale of goods by foreign investors and foreign-invested economic organizations in Vietnam

– Decree No. 54/2017/ND-CP dated August 4, 2017 of the Government detailing a number of articles and measures to implement the Law on Pharmacy.

1. WTO, VJEPA, CPTPP:Other machinery and equipment rental services (CPC 83109): Uncommitted
2. EVFTA and VKFTA:allowed foreign capital contribution in joint venture not to exceed 51%. As for AFAS, foreign capital contribution in joint ventures is not allowed to exceed 70%.

Additional commitments: Equipment brought into Vietnam must comply with relevant Vietnamese regulations on import and export management, standards, technical requirements, national security, national telecommunications infrastructure, and comply with relevant legal provisions on telecommunications licensing as well as licenses to use radio and frequency equipment.

In addition, AFAS is also open to the following services:

– Aircraft rental service without operator (CPC 83104): unlimited.

– Rental services related to furniture and other household items (CPC 83203): unlimited.

– Boat rental service without a driver (CPC 83103): no restrictions, except that foreign capital contribution in joint ventures does not exceed 70%.

– Private car rental service without driver (CPC 83101): unlimited.

EVFTA is also open to charter/leasing services related to ships (CPC 83103): No restrictions, except for joint ventures in which the foreign capital contribution cannot exceed 70% is allowed to be established.