On 22 April 2013, the Ministry of Trade and Industry (MOIT) issued Circular No. 08/2013/TT-BCT (Circular 08) providing guidelines on the import, export, and distribution of goods by foreign-invested enterprises (FIEs) in Vietnam.
Circular 08 allows FIEs to:
- Exercise export and import rights;
- Exercise distribution rights;
- Establish retail outlets;
- Engage in the trading of goods and related activities with an export processing enterprise;
- Contribute capital to, or purchase shares in, Vietnamese enterprises that engage in the trading of goods and related activities.
Establishment of Retail Outlets
An enterprise licensed for distribution has the right to set up one retail outlet with its initial business registration. Approval for the establishment of additional retail outlets is subject to an Economic Needs Test (ENT).
Master Plan
Circular 08 requires the set up of retail outlets, including the first retail outlet, to conform with the master plan of the city or province in which the outlet will be located.
Revised ENT
Circular 08 revises the ENT used to determine whether an additional retail outlet is permissible, initially outlined in Circular 09/2007/TT-BTM (17 July 2007) (Circular 09). The ENT in Circular 09 required a case-by-case analysis of the number of retail outlets, market stability and population density in the province or city where the retail outlet was to be located. Circular 08 narrows the geographic scope of ENT analysis to the district in which the additional outlet will be located, rather than the city or province. The other factors of the test outlined in Circular 09 remain unchanged.
Exemption from ENT
Circular 08 also incorporates an exemption from the ENT. The additional retail outlet will not be subject to ENT analysis if it satisfies the following conditions:
- The area of the retail outlet is less than 500m2;
- The retail outlet is situated in a location planned for retail by the city or province (e.g., trade centres); and
- The construction of the infrastructure of the location planned for retail has been completed.
Reports by FIEs
Companies engaged in trading and related activities must make annual reports on their export and import activities. The reports must provide information such as import or export turnover and names of the imported or exported goods. Circular 08 provides forms on which the reports must be made.
Effective Date and Implementation
Circular 08 will become effective on 7 June 2013 and will replace Circular 09/2007/TT-BTM (7 July 2007) guiding Government Decree 23/2007/ND-CP (12 February 2007) implementing the Commercial Law regarding trading and distribution activities by FIEs in Vietnam, and will also replace Circular No. 05/2008/TT-BCT (14 April 2008) amending and supplementing Circular 09.
Previously published on 16 May 2013
Keywords: new regulation, trading, distribution rights, foreign-invested enterprises, Vietnam
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