Establishment of a gas business company in Vietnam

On June 15, 2018, the Government issued Decree 87/2018/ND-CP on Gas Business, which officially took effect on August 1, 2018, and is currently amended by Decree 17/2020/ND-CP and Decree 85/2024/ND-CP. Currently, the energy demand is constantly increasing, especially natural gas – an indispensable resource in production. Gas Business has become an important part of the global economy as well as Vietnam. Therefore, organizing a business operating in the field of Gas Business requires a deep understanding of the energy market, in accordance with legal regulations in Vietnam. In the article below, Viet An Law will present the legal contents related to the establishment of a gas business company in Vietnam.

What is the gas business?

According to Article 3 of Decree 87/2018/ND-CP amended and supplemented by Decree 17/2020/ND-CP regulating gas business, gas business is currently regulated to include: liquefied petroleum gas, liquefied natural gas, and compressed natural gas.

• Liquefied petroleum gas is a hydrocarbon product derived from petroleum with the main component being propane (chemical formula C₃H₈) or butane (chemical formula C₄ H₁₀) or a mixture of both, English name: Liquefied Petroleum Gas (abbreviated as LPG); normal temperature and pressure, LPG is in gaseous state and the gas is compressed to a certain pressure or cooled to a certain temperature, LPG turns into liquid state.
• Liquefied natural gas is a hydrocarbon product in liquid form, derived from natural gas with the main component being Methane (chemical formula: CH₄ English name: Liquefied Natural Gas (abbreviated as LNG); at normal temperature and pressure, LNG is in gaseous form and when cooled to a certain temperature, LNG turns into liquid form.
• Compressed natural gas is a hydrocarbon product in gaseous form compressed at high pressure (200 to 250 bar), derived from natural gas with the main component being Methane (chemical formula: CH_{4 with} English name: Compressed Natural Gas, abbreviated as CNG).

Gas Business is the continuous implementation of one, several, or all of the following activities: production, processing; export, import; Gas Business; gas filling and supply; temporary import for re-export; leasing of gas tanks, gas cylinders, LPG cylinder warehouses, wharves; gas delivery and transportation for profit purposes. Thus, Gas Business is one of the activities of Gas Business.

Conditions for the establishment of a gas business company in Vietnam

Conditions for foreign investors

Currently, according to the regulations in Vietnam’s WTO Commitment Schedule, the Gas Business can be classified into the distribution service group, commonly the Wholesale service of liquefied petroleum gas, liquefied natural gas, and compressed natural gas. (CPC 622, 61111, 6113, 6121). This service industry group currently has no market restrictions except for retail services, however, this type is not popular with foreign investors in Vietnam.

For business involving manufacturing, foreign investors need to meet the conditions in Services related to manufacturing (CPC 884 and 885).

However, because gas is a special commodity, foreign investors must also meet the conditions for Gas Business according to Vietnamese law, similar to domestic investors when establishing a new business project in Vietnam.

Conditions for Gas Business

According to Appendix IV of the Investment Law 2020, the gas business is on the list of conditional investment and business sectors. According to Article 8 of Decree 87/2018/ND-CP, as amended and supplemented by Decree 17/2020/ND-CP, traders trading in gas must meet the following conditions:

• Being a trader established following the provisions of law;
• Have a gas tank or a gas tank rental contract or have an LPG cylinder or an LPG cylinder rental contract;
• Meet the conditions on fire prevention and fighting as prescribed by law;

For each type of gas traded, the Gas Business company must also meet the following conditions:

• Gas Business through pipelines: must have a gas supply station that fully meets the safety conditions in Gas Business activities according to the provisions of law.
• LNG trading: must have an LNG supply station or LNG filling station in vehicles that meet all safety, fire prevention, and fighting conditions as prescribed by law.
• Buying and selling CNG: must have CNG tank trucks, CNG compression stations, CNG supply stations, or CNG filling stations for vehicles that meet all safety, fire prevention, and fighting conditions as prescribed by law.

Note the procedures when establishing a gas business company

• Procedures for applying for Investment Registration Certificate for foreign investors;
• Procedures for applying for an Enterprise Registration Certificate;
• Procedures for applying for a Certificate of Eligibility for Gas Business.

Procedures for applying for an Investment Registration Certificate for foreign investors

Documents required by customers

• Documents on the legal status of the investor;
• Documents proving the financial capacity of the investor;
• Copy of documents on land use rights to implement investment projects (if any);
• Other relevant documents (if any).

Agency receiving application

• The Management Board of industrial parks, export processing zones, high-tech zones, and economic zones issues Investment Registration Certificates for investment projects in industrial parks, export processing zones, high-tech zones, and economic zones.
• The Department of Planning and Investment issues Investment Registration Certificates for investment projects outside industrial parks, export processing zones, high-tech zones, and economic zones.

The time limit for settlement

The investment registration agency shall issue an Investment Registration Certificate to the investor within 15 days from the date of receipt of a valid application. In case of refusal to issue an Investment Registration Certificate, the investment registration agency shall issue a written notice stating the reasons.

Administrative procedure results

Certificate of Investment Registration

State Fees

None

Procedures for applying for an Enterprise Registration Certificate

Documents required by clients

• Legal documents of individuals and organizations contributing capital;
• Company charter;
• List of members;
• Certificate of investment registration for foreign investors.

Agency receiving application

Business Registration Office where the enterprise has its headquarters

The time limit for settlement

Within 3 working days from the date of receiving complete and valid documents, the Business Registration Office of the Department of Planning and Investment will proceed to issue a business license.

Administrative procedure results

Enterprise Registration Certificate.

State Fees

• Business registration fee: 50,000 VND/time.
• Fee for publishing business registration content: 100,000 VND/time.

Procedures for applying for a Certificate of Eligibility for Gas Business

After completing the legal documents of a company (IRC and ERC), before conducting gas business activities, the enterprise needs to apply for a business eligibility license.

Authority to issue Certificate of Eligibility

According to Article 44 of Decree 87/2018/ND-CP, the Department of Industry and Trade is authorized to issue Certificates of eligibility for Gas Business.

Dossier components

According to Article 38 of Decree 87/2018/ND-CP amended and supplemented by Decree 17/2020/ND-CP, the application dossier for a Certificate of eligibility for Gas Business includes:

• Application for Certificate of eligibility for Gas Business business (according to prescribed form);
• Copy of Enterprise Registration Certificate;
• Copy of Certificate of technical safety inspection results of the tank;
• Documents proving compliance with fire prevention and fighting requirements.

For traders trading in LPG with only LPG cylinders or renting LPG cylinders, in addition to the documents specified in Clause 2 of this Article, the following documents must be supplemented:

• Copy of valid LPG cylinder inspection certificate;
• Copy of Certificate of Conformity for LPG cylinders.

For companies trading in gas through pipelines, in addition to the above documents, they must also provide:

• Documents proving the existence of a gas pipeline or gas pipeline lease contract;
• Copy of valid Pipeline Inspection Certificate;
• Documents proving that the gas station meets safety, fire prevention, and fighting regulations as prescribed.

For LNG trading companies, in addition to the above documents, they must have:

• Documents proving that there is an LNG filling station that meets safety regulations as prescribed or an LNG filling station for vehicles that has been granted a valid certificate.

For companies trading in CNG, in addition to the above required documents, they must also provide:

• Documents proving that the CNG tanker has been inspected and is still valid;
• Documents proving that there is a CNG supply station or a CNG filling station for vehicles that meets safety, fire prevention, and fighting regulations;
• Documents proving that the CNG compression station meets safety, fire prevention, and fighting regulations as prescribed.

Implementation sequence

• Traders submit 01 set of documents requesting a Certificate of Eligibility directly or by post or electronically to the Department of Industry and Trade.
• In case the trader does not have sufficient valid documents, the Department of Industry and Trade shall issue a written request for the trader to supplement.
• Within 15 working days from the date of receipt of complete and valid dossiers, the Department of Industry and Trade shall be responsible for reviewing, assessing, and issuing a Certificate of Eligibility to the trader. In case of refusal to issue a Certificate, a written response must be given stating the reasons.

Note: The validity of the Certificate of Eligibility is 10 years from the date of the new issue.

Some gas business companies in Vietnam

Bao An Gas Business Company Limited

Address: 114 Phan Van Han, Ward 17, Binh Thanh District, Ho Chi Minh City

Main industry: 4661: Wholesale of solid, liquid, gaseous fuels and related products

Southern Liquefied Gas Business Company

Address: 45, 47 Nguyen Kiem, Ward 03, Go Vap District, Ho Chi Minh City.

Main business lines: 0910: Support services for crude oil and natural gas exploitation

Lien Quang Thanh Liquefied Petroleum Gas Business Joint Stock Company

Address: Lot A Tran Lam Industrial Park, Tran Lam Ward, Thai Binh City, Thai Binh.

Main industry: 4661: Wholesale of solid, liquid, gaseous fuels and related products

Northern Liquefied Gas Business Company

Address: 5th and 6th floors, 59 Quang Trung building, Nguyen Du ward, Hai Ba Trung district, Hanoi.

Main industry: 8299: Other business support service activities not elsewhere classified

Hanoi Liquefied Petroleum Gas Business One Member Co., Ltd.

Address: No. 34 Dao Tan, Cong Vi Ward, Ba Dinh District, Hanoi.

Main industry: 4669: Other specialized wholesale not elsewhere classified

If you have any questions or legal needs related to the establishment of a gas business company in Vietnam, please contact Viet An Law Firm for the best advice and support!