Wholesale/retail concepts under the commercial law of Vietnam

Decree 9/2018 introduces a new approach regarding trading activities of foreign invested enterprises (FIE) in Vietnam. In particular, wholesale of most goods is not subject to the requirement of Trading License (Giấy Phép Kinh Doanh). However, Decree 9/2018 is still uncertain on the category of wholesale versus retail activities. A clearer definition of these concepts is important because an FIE conducting retail activities must apply for a Trading License with the Ministry of Industry and Trade (MOIT).

Under Decree 9/2018,

  • “wholesale” means the activities of selling goods to (a) wholesalers, (b) retailers, and (c) other traders, organizations; exclusive of retail activities;

  • “retail” means the activities of selling goods to (a) individuals, (b) households, and (c) other organizations for consumption purposes.

There are some issues arising from the above definitions under Decree 9/2018:

New amendments to regulations on foreign investment in education sector in Vietnam

In June 2018, the Government issued Decree 86/2018 on cooperation with and investment by foreign investors (Decree 86/2018). Decree 86/2018 replaces Decree 73/2012 as from August 2018. In comparison with Decree 73/2012, Decree 86/2018 introduces certain notable changes as follows:

  • Decree 86/2018 no longer applies to foreign investment in vocational education (đào tạo nghề).  
  • For the first time, joint cooperation with foreign investors is permitted at all level of education including preliminary schools, secondary schools and high schools. Under Decree 73/2012, joint cooperation is only permitted for university education.
  • Decree 86/2018 expressly provides that a foreign investor to invest in education sector by contributing capital or to purchase shares and capital contribution from (1) a Vietnamese educational institution or (2) a foreign-invested business entity that establishes an educational institution in Vietnam. Decree 86/2018 also defines a foreign-invested educational institution as an education institution invested by foreign invested business entity.
  • Decree 86/2018 increases the cap on number of local students that a foreign-invested primary, secondary school, or a high school can enrol to 50% of the total students. Under Decree 73/2012, the cap is 20%.
  • Decree 86/2018 makes it more difficult for foreign investors to invest in universities in Vietnam by increasing the minimum investment amount to VND 1,000 billion (from VND 300 billion).

This post is contributed by Ha Kieu Anh, a legal trainee at Venture North Law.

New regulations on industrial zones in Vietnam

On 22 May 2018, the Government issued Decree 82/2018 on industrial zones and economic zones in Vietnam. Decree 82/2018 replaces Decree 29/2008 as amended from 10 July 2018. The salient points of Decree 82/2018 are as follows:

  • An economic zone located in an area entitled to investment incentive policies is now entitled to be regarded as an area facing extreme socio-economic difficulties.
  • Decree 82/2018 introduces three new kinds of industrial zones which are supporting industrial zone, eco-industrial zone, and industrial-urban-service zone. Certain investment incentives will be available to supporting industrial zones and eco-industrial zones (e.g., land rental exemption, soft loans, or maximum land lease term). An industrial-urban-service area may include a residential and service area which must not exceed one third of the area size of the industrial zone. In addition, an exporting processing zone is now regarded as a type of industrial zone instead of being classified as a separate type of zone.
  • The amended definition of export processing enterprise (EPE) seems to suggest that an EPE does not need to export all of its products. Instead, an EPE only needs to be specializing in manufacturing exported products.
  • Decree 82/2018 allows an industrial zone to have separate dwelling facilities for foreign managers, chief officers and experts.

This post is contributed by Ha Kieu Anh, a trainee at Venture North Law.