Conditions for petroleum distribution investment to foreign investors in Vietnam

Currently, with the trend of integration and in line with Vietnam’s open mechanism, foreign investors who want to invest in the gas sector are increasing. However, this is a conditional business investment industry for foreign investors. Foreign investors wishing to operate in this field must first meet the conditions required by law. Viet An Law firm would like to advise investors on conditions for foreign investors in the field of the petroleum distribution business.

Legal basis

• WTO, FTAs, ACIA;
• Investment Law 2020;
• Decree No.83/2014/ND-CP dated September 3, 2014, on petroleum trading;
• Decree No.08/2018/ND-CP dated January 15, 2018, amending several decrees related to business investment conditions under the state management of the Ministry of Industry and Trade;
• Circular No.34/2013/TT-BCT dated December 24, 2013, announcing the roadmap for goods trading and activities directly related to the purchase and sale of goods of foreign-invested enterprises in Vietnam issued by the Minister of Industry and Trade.
• Decree No.09/2018/NP-CP dated January 15, 2018, detailing the Law on Trade and the Law on Foreign Trade Management on goods trading and activities directly related to the purchase and sale of goods by foreign investors and foreign-invested economic organizations in Vietnam.

Conditions for investment and distribution of petroleum

According to the international treaty that Vietnam is a member of

According to the provisions of international treaties to which Viet Nam is a member, foreign investors may not exercise the distribution rights to processed crude and oil.

Conditions by Vietnamese law

For the petroleum business, foreign investors wishing to invest in this sector in Vietnam must comply with the following conditions:

• Foreign-invested economic organizations may not exercise export rights to oil and oils obtained from bitumen minerals, in crude form; crude oil; Gases, and other types. In case the foreign investor is an oil and gas contractor under the provisions of the Law on Oil and Gas, he/she is entitled to export the oil and gas part-owned by him/her.
• Foreign-invested economic organizations may not exercise import rights to oil derived from petroleum and oils obtained from bitumen minerals, except crude oil; preparations that have not been detailed or recorded elsewhere, containing a content of 70% or more of CSO oil derived from petroleum oils or other oils from bitumen minerals, these oils are the basic component of such preparations; waste oil.
• Foreign-invested economic organizations may not exercise distribution rights to crude and processed oil including petroleum and oils obtained from bitumen minerals, in crude form; Oil is derived from petroleum and oils obtained from bitumen minerals.
• Foreign-invested economic organizations may produce petroleum under conditions by the approved planning.

Petroleum distribution conditions

Traders with the following conditions are granted a Certificate of eligibility as petroleum distribution traders by the Ministry of Industry and Trade when:

• Enterprises are established by the provisions of law, in the Certificate of registration of enterprises with petroleum business registration.
• Having warehouses, tanks with a minimum capacity of two thousand cubic meters (2,000^m3) owned by enterprises or co-owned or leased for use by traders trading in petroleum services for five (05) years or more.
• Having petroleum transport vehicles owned by enterprises or co-owned or leased for use by traders trading in petroleum services for five (05) years or more.
• Having laboratories owned by enterprises or co-owned or contracted services to hire state agencies with laboratories capable of testing and testing petroleum quality indicators by national technical regulations and applicable publishing standards.
• There is a petroleum distribution system in the area of two (02) provinces and centrally-run cities or more, including a minimum of five (05) retail stores owned or owned and co-owned, at least ten (10) stores belonging to petroleum retail agents are granted certificates of petroleum retail eligibility as prescribed.
• Managers and employees directly in business must be trained, trained, and have certificates of professional training and training in fire prevention, firefighting, and environmental protection by the current law.

The above are the investment conditions for foreign investors in the field of petroleum trading by Vietnamese law. If you have any questions or need advice on this matter, please contact us immediately for timely assistance.