E-commerce activities of foreign investors in Vietnam

In recent times, e-commerce has become increasingly popular worldwide with many new advanced technologies being introduced in operation and development. Electronic commerce (e-commerce) allows companies to establish a market presence or enhance their existing market position by providing cheaper and more efficient distribution chains for products or services. The strong development of this activity has attracted foreign investors to invest heavily in Vietnam. In this article, Viet An Law has some legal opinions on the e-commerce activities of foreign investors in Vietnam as follows:

Legal basis

• WTO schedule of Vietnam.
• Law on Investment 2020;
• Law on Enterprise 2020;
• Decree 31/2021/ND-CP dated March 26, 2021;
• Decree 09/2018/ND-CP dated January 15, 2018;
• Decree 52/2013/ND-CP dated May 16, 2013;

Regulations on e-commerce activities in Vietnam

According to the provisions of Clause 1, Article 3 of Decree 52/2013/ND-CP dated May 16, 2013, E-commerce activities are the conduct of part or all of the process of commercial activities by means of electronic devices connected to the Internet, mobile telecommunications networks or other open networks.

Foreign investors are allowed to participate in e-commerce activities including:

• Foreign individuals residing in Vietnam;
• Foreign traders and organizations have a presence in Vietnam through investment activities, establishing branches, representative offices, or establishing websites under Vietnamese domain names.

Forms of organizing e-commerce activities

According to Vietnamese law, e-commerce activities have the following organizational forms:

• Sales e-commerce website;
• Website provides e-commerce services. Websites providing e-commerce services include the following types:
  • E-commerce exchange;
  • Online auction website;
  • Online promotional website;
  • Other types of websites are regulated by the Ministry of Industry and Trade.

Sales e-commerce website activities

A sales e-commerce website is an e-commerce website set up by traders, organizations, and individuals to serve their trade promotion activities, sell goods, or provide services.

Thus, an e-commerce sales website is a website created by a business to serve its own trade promotion, sales, or service provision activities. To start operating a business, it is necessary to ensure the following conditions:

• Having a profession suitable to the activities provided on the sales e-commerce website.
• Notify the Ministry of Industry and Trade about setting up a sales e-commerce website.
• Apply for a retail goods business license in case of conducting retail goods directly on an e-commerce sales website.

Procedures for notification of setting up a sales e-commerce website

The receipt and processing of sales e-commerce website announcements is done online by the Ministry of Industry and Trade at the e-commerce management portal at www.online.gov.vn.

Procedures for granting retail business licenses on e-commerce sales websites

Conditions for applying for a retail business license on sales e-commerce websites

• Satisfy the conditions on market access in international treaties to which Vietnam is a contracting party;
• Have a financial plan to carry out the activities requested for a Business License;
• No overdue tax debt in case established in Vietnam for 1 year or more.

Application for a retail business license on the e-commerce sales website

• Application for a Business License;
• The explanation contains;
• An explanation of the conditions for the grant of the corresponding business license as prescribed in Article 9 of Decree 09/2018/ND-CP;
• Business plan: Describes the content and methods of implementing business activities; presents business plans and market development; labor demand; evaluates the socio-economic impact and efficiency of the business plan;
• Financial plan: Report on business performance results on the basis of audited financial statements of the most recent year in the case established in Vietnam for 01 year or more; explanation of capital, capital sources, and capital mobilization plans; accompanied by financial documents;
• Business situation of goods purchase and sale activities and activities directly related to the purchase and sale of goods; The financial situation of the economic organization with foreign investment capital as of the time of application for a Business License, in the case of granting a Business License specified in Clause 6, Article 5 of this Decree.
• Tax authority documents proving no overdue tax debt.
• Copy: Enterprise Registration Certificate; Investment Registration Certificate for projects selling and buying goods and activities directly related to buying and selling goods (if have).

Website activities providing e-commerce services

A website providing e-commerce services is an e-commerce website set up by traders and organizations to provide an environment for other traders, organizations, and individuals to conduct commercial activities.

Thus, the nature of this website is that the supplier will provide an environment for other traders, organizations, and individuals to conduct trade promotion activities, sell goods, or provide services.

Operational conditions for e-commerce service provision website

• Registered business line of providing commercial services.
• Apply for a business license to provide commercial services
• Register a website providing e-commerce services with the Ministry of Industry and Trade.

Procedures for granting a business license to provide e-commerce services

Please refer to the same conditions as in the Procedures for Granting a Retail Business License on the sales e-commerce website mentioned in this article.

Procedures for registering a website providing e-commerce services with the Ministry of Industry and Trade

After being granted a Business License to provide e-commerce services, foreign-invested companies need to continue the procedure of registering websites providing e-commerce services with the Ministry of Industry and Trade.

Application for a business license to provide e-commerce services

• Application for website registration to provide e-commerce services.
• Authenticated copy of Enterprise Registration Certificate or Investment Registration Certificate.
• The prescribed service provision plan includes the following contents;
  • Operational organization model, including service provision activities, promotion activities, and service marketing both inside and outside the online environment;
  • Delineate rights and responsibilities between traders and organizations providing e-commerce services and service users.
• Regulations governing the operation of websites providing e-commerce services include the following contents:
  • Rights and obligations of users of e-commerce exchange services;
  • Describe the transaction process for each type of transaction that can be conducted on the e-commerce exchange;
  • Check activities and handling authority of traders and organizations providing e-commerce trading floor services when detecting business acts that violate the law on the exchange;
  • Rights and obligations of the parties in transactions performed on the e-commerce exchange;
  • Limit the liability of traders and organizations providing e-commerce trading floor services in transactions performed on the exchange;
  • Regulations on information security and information management on e-commerce exchange;
  • Mechanism to resolve complaints and disputes between parties related to transactions conducted on the e-commerce exchange;
  • Policy on protecting the personal information of users of e-commerce trading floor services as prescribed in Article 69 of this Decree;
  • Measures to deal with violations of consumer rights on e-commerce exchange;
  • Measures to handle violations for those who do not comply with the operating regulations of the e-commerce exchange;
  • Handling mechanism and time limit for handling when receiving complaints about illegal business acts on e-commerce service provision websites.
• Sample service contract or cooperation agreement between the trader or organization that owns the website providing e-commerce services and the trader, organization, or individual participating in the purchase and sale of goods and provision of services on that website
• General trading conditions apply to the purchase and sale of goods and provision of services on the website (if have).

Services of Viet An law firm related to e-commerce activities of foreign investors

• Consulting on conditions and procedures for establishing foreign-invested companies operating in e-commerce;
• Consulting on procedures and conditions for applying for a Business License;
• Consulting on procedures and conditions for notification of e-commerce sales;
• Consulting on procedures, conditions, and registration documents to provide e-commerce services.
• Investor representatives work with competent Vietnamese state agencies in the process of implementing procedures to adjust license types.