Circular 03/2024/TT-BCT amending regulations on commercial franchising and affiliates of foreign company in Vietnam

On January 30, 2024, the Ministry of Industry and Trade issued Circular 03/2024/TT-BCT amending and supplementing several articles of the Circulars of the Minister of Industry and Trade in the field of commercial franchising, representatives offices, and branches of foreign company in Vietnam. In the article below, Viet An Law will present some key updates to this Circular.

Information of Circular 03/2024/TT-BCT

• Sector: Commercial
• Place of issue: Ministry of Industry and Trade
• Signatory: Phan Thi Thang
• Issue date: 01/30/2024
• Effective date: 18/03/2024

Documents amended by Circular 03/2024/TT-BCT

• Circular 09/2006/TT-BTM guiding the registration of commercial franchising activities;
• Circular 34/2013/TT-BCT announcing the roadmap for implementing goods purchase and sale activities and activities directly related to goods purchase and sale of foreign-invested enterprises in Vietnam;
• Circular 11/2016/TT-BCT stipulates the form for implementing Decree 07/2016/ND-CP detailing the Commercial Law on Representative Offices and Branches of foreign traders in Vietnam.

Regulations on management of commercial franchising in Vietnam

Update authority

Circular 03/2024/TT-BCT has amended the regulations when only talking about competent state agencies in general, now clearly designating the Ministry of Industry and Trade as the agency responsible for announcing the deletion of activity registration. Commercial franchising action according to form TB-6A Appendix II issued with Circular 09/2006/TT-BTM and published on the website of the Ministry of Industry and Trade.

The Department of Industry and Trade is responsible for periodically reporting commercial franchising activities in the area to the Ministry of Industry and Trade.

Update the database of representative offices and branches of foreign traders

According to the amended regulations of Circular 03/2024/TT-BCT related to the authority to manage databases of dependent units of foreign traders in Vietnam, the name of the specialized unit in charge of the Ministry of Industry Thuong has changed from the Department of E-Commerce and Information Technology to a new name as the Department of E-Commerce and Digital Economy. The Department’s responsibility is to establish, manage, and operate the database of representative offices and branches of foreign traders in Vietnam. The newly updated website address: http://vpdd.dvctt.gov.vn/.

Names of competent authorities have been changed

Procedures for registering commercial franchising activities

Cases of registration of commercial franchising activities are deleted

Article 22 of Decree 35/2006/ND-CP stipulated the case revoked the license of commercial franchising activities registration as follows:

• Franchise traders stop doing business or change business lines;
• Traders have their Enterprise Registration Certificate or Investment Certificate revoked.

Contents on registration of commercial franchising activities

Regulations on the classification of goods

Instead of hard regulations on the list of import and export goods like Article 3.1 of Circular 34/2013/TT-BCT when regulating the sale of goods activities of foreign-invested enterprises in Vietnam, the Circular stipulates that the classification of goods according to HS codes and description of goods shall comply with the Circular of the Minister of Finance promulgating the List of Vietnam’s import and export goods through periods such as Circular 156/2011/TT-BTC, Circular 65/2017/TT-BTC, Circular 09/2019/TT-BTC, Circular 72/2022/TT-BTC.

According to this regulation, although the circulars have expired, they are still applied in terms of factors related to the List of imported and exported goods to support individuals and organizations when performing classified and described goods in the previous period are also not considered errors in the content of the dossier.

License to establish affiliates of foreign traders

Forms used in procedures for licensing the establishment of branches and representative offices of foreign traders are specified in Circular 11/2016/TT-BCT. The circular stipulates how to record the number of the Representative Office Establishment License (9-digit code) with the first 2 digits taken from the city and province code. Instead of adjusting separately in the Appendix such as Circular 11/2016/TT-BCT, Circular 03/2024/TT-BCT amends this regulation to the List of codes of provinces where citizens register their birth according to regulations of the Minister of Public Security from time to time. This regulation is intended to ensure that establishment registration is carried out correctly and does not conflict with regulations that are frequently changed.

The authority to grant a License to establish a representative office of a foreign trader in Vietnam belongs to:

• Departments of Industry and Trade of provinces and cities.
• Management board of industrial parks, export processing zones, economic zones, and high-tech zones.

Example of how to record the number of the License to establish a representative office of a foreign trader in Vietnam:

• The 15th license was issued by the Department of Industry and Trade of Hanoi to the first representative office of foreign trader A, the License number was recorded: 01-00015-01;
• The 6th license was issued by the Ho Chi Minh City Hi-Tech Park Management Board to the second representative office of foreign trader A, the License number is recorded: BQLKCNC-79-00006-02.

Legal consulting services of Viet An Law

• Consulting on legal regulations related to commercial franchising and issues related to the establishment of Representative Offices and Branches of foreign traders;
• Representing clients to carry out procedures at state agencies;
• Consulting and drafting commercial franchise contracts, drafting documents to establish representative offices and branches of foreign traders by client requirements and legal regulations;
• Accounting tax services for businesses when doing business as agents buying and selling goods for foreign traders.
• Consulting on procedures that need to be carried out after being granted a License to establish representative offices and branches of foreign traders.
• Monitor and provide regular legal advice during the franchising process if clients need it.

Clients who need advice on issues related to franchising, buying, and selling goods to foreign traders, please contact Viet An Law Firm for the best support!

Disclaimer: This article was last updated in May 2024. Laws may have changed since then. Please contact Viet An Law to confirm the information in this article is current and for any legal assistance.