Set up a petroleum trading company in Vietnam

Petroleum is the main energy source, a strategic commodity, and plays an important role in the national economy. Currently, petroleum business activities are increasingly developing, leading to the establishment of many petroleum trading companies. In the article below, Viet An Law will analyze current Vietnamese regulations for investors to set up a petroleum trading company in Vietnam.

Legal basis

• Law on Enterprise 2020.
• Law on Investment 2020.
• Decree 01/2021/ND-CP on business registration.
• Decree 31/2021/ND-CP details the Investment Law.
• Decree 83/2014/ND-CP on petroleum business, amended and supplemented by Decree 08/2018/ND-CP, Decree No. 95/2021/ND-CP, and Decree 80/2023/ND-CP.

What is a petroleum trading company?

According to Clause 2, Article 3 of Decree 83/2014/ND-CP, as amended and supplemented by Decree 08/2018/ND-CP, Decree No. 95/2021/ND-CP, petroleum business includes activities:

• Export (domestically produced petroleum and raw materials and imported petroleum and raw materials), import, temporary import for re-export, border-gate transfer, export processing of petroleum and raw materials;
• Producing and mixing petroleum;
• Distributing petroleum in the domestic market;
• Warehouse and port rental services, receiving, preserving, and transporting petroleum.

A petroleum trading company is a company established to conduct petroleum business such as a petroleum trading company, a petroleum distribution company, a petroleum service company, a general agent company, a petroleum business agent, a petroleum retail agency…

For establishment, investors in the petroleum business need to carry out the following legal procedures:

• Procedures for applying for Investment Registration Certificate (for foreign-invested enterprises);
• Procedures for applying for an Enterprise Registration Certificate;
• Procedures for applying for a Petroleum Trading License.

Petroleum business according to Vietnamese law

When registering a petroleum business, you can register several industry codes as follows:

Procedures for establishing a petroleum trading company in Vietnam

Step 1: Procedures for applying for an Investment Registration Certificate for foreign investors

petroleum trading company is a company established in Vietnam by foreign investors (FDI). Because it is an investment project of a foreign investor, before carrying out procedures such as establishing a domestic enterprise, the enterprise needs to carry out procedures to apply for an Investment Registration Certificate.

The procedure is prescribed in the Investment Law 2020 and specifically guided in Decree 31/2021/ND-CP. Specifically:

Dossier components

• Written request to implement the investment project, including a commitment to bear all costs and risks if the project is not approved;
• Documents on the investor’s legal status;
• Documents proving the investor’s financial capacity;
• Proposed investment project. In cases where the law on construction stipulates the preparation of a pre-feasibility study report, the investor may submit a pre-feasibility study report instead of the investment project proposal;
• Content explaining the technology used in investment projects for projects subject to appraisal and consultation on technology according to the provisions of the law on technology transfer;
• Other documents related to the investment project, conditions, and capacity requirements of the investor according to the provisions of law (if any).
• Power of Attorney for Viet An Law.

The order of execution

• The investor submits 01 set of application documents for an Investment Registration Certificate to the investment registration agency. In case the investment project is implemented in 02 or more provincial administrative units, the investor submits documents to the Department of Planning and Investment of a province or centrally run city where the investor implements the project, or plan to set up an executive office to apply for an Investment Registration Certificate for the project.
• The investment registration agency issues an Investment Registration Certificate to the investor within 15 days from the date of receipt of valid documents when the project meets the conditions.

Step 2: Prepare business registration documents at the Department of Planning and Investment

One of the conditions for petroleum business is that the enterprise is established according to the law. Currently, the law does not have specific regulations on the type of business when establishing a petroleum business. Thus, it is possible to establish a petroleum business business in the form of a joint stock company, limited liability company, partnership company, or private enterprise. Procedures for establishing a business are carried out following the provisions of the Enterprise Law 2020 and Decree 01/2021/ND-CP.

The company registration dossier includes the following documents as prescribed in Decree 01/2021/ND-CP :

• Application for business registration.
• Company charters.
• List of members for multiple-member limited liability companies; List of founding shareholders and list of shareholders who are foreign investors for joint stock companies.
• Copies of legal documents of organizations and individuals who are members/shareholders of the company; Legal documents of the individual for the authorized representative and document appointing the authorized representative.
• Investment registration certificate in case the enterprise is established or participates in the establishment by foreign investors or economic organizations with foreign investment capital according to the provisions of the Investment Law.
• Power of Attorney for Viet An Law to carry out the procedure.

Step 3: Submit a business registration application.

After preparing the documents, the company founder or authorized person submits the documents to the business registration agency where the enterprise is headquartered in the following method:

• Register your business directly at the Business Registration Office;
• Register your business via postal service;
• Register your business via an electronic information network.

Step 4: Competent authority receives and processes documents.

• After receiving the business registration application, the Business Registration Office issues a Receipt of receipt of the application to the applicant.
• After giving the receipt of the application, the Business Registration Office fully and accurately enters the information in the business registration application, checks the validity of the application, and downloads the digitized documents. in the business registration dossier in the National Business Registration Information System.
• Enterprises are granted an Enterprise Registration Certificate when they meet all the conditions prescribed in Clause 1, Article 27 of the Law on Enterprises. The Business Registration Office issues the Enterprise Registration Certificate in the National Business Registration Database within 03 working days from the date of receipt of valid documents.

Step 5: Publication of the business registration content

After being granted an Enterprise Registration Certificate, an enterprise must make a public announcement on the National Business Registration Portal within 30 days from the date of publication. Enterprises pay the fee and send a request for publication of enterprise registration contents to the Business Registration Office where the enterprise is registered.

Step 6: Carve the company seal

Currently, after engraving the seal, the company manages the seal itself without having to carry out the procedures for posting the seal announcement as before. The Company reserves the right to engrave multiple seals without any restrictions. Business seals only need to ensure uniformity in form and contain the name and business code information.

Step 7: Carry out procedures after being granted a License

• Hang signs at company headquarters;
• Notice of application of tax calculation method;
• Open a business bank account, register 08 bank account forms with the tax authority, and register for electronic tax payment;
• Register for an electronic digital signature to pay taxes electronically;
• Print and order invoices;
• Declare and pay license tax.

Procedures for applying for a license to conduct petroleum business

After completing the procedures for establishing the company, it is necessary to apply for a License to qualify for specific petroleum trading according to business needs as prescribed in Decree 83/2014/ND-CP on petroleum trading, as amended and supplemented by Decree 08/2018/ND-CP, Decree No. 95/2021/ND-CP. Specifically:

Cases of applying for a License

• Major traders in petroleum trading (including petroleum import and export activities) must have a Certificate of eligibility to act as a major petroleum trader;
• Petrol and oil distributors must have a Certificate of eligibility to act as petrol and oil distributors;
• A general petroleum trading agent must have a Certificate of eligibility to act as a general petroleum trading agent;
• Gasoline retail agents must have a Certificate of eligibility to act as a gasoline retail agent.
• Gasoline retail stores must have a Certificate of eligibility to retail gasoline and oil.

Authorization

The Department of Industry and Trade has the authority to issue licenses for the following types of documents:

• Certificate of eligibility to act as a petroleum retail agent for traders with headquarters in the area and a system of two (02) or more petroleum retail stores in one (01) province;
• Certificate of eligibility to act as a general agent for petroleum trading for traders headquartered in an area with a petroleum distribution system in one (01) province;
• Certificate of store qualified to retail gasoline and oil in the area.

The Ministry of Industry and Trade has the authority to issue licenses for the following types of documents:

• Certificate of eligibility to act as a petroleum trader;
• Certificate of eligibility to act as a petroleum distributor;
• Certificate of eligibility to act as a general agent for petroleum trading for traders with petroleum distribution systems in two (02) provinces or more.

Some popular petroleum companies in Vietnam

Currently, in Vietnam, there are several popular petroleum trading companies such as:

• Vietnam Petroleum Group (Petrolimex) is the largest petroleum products trading company in Vietnam;
• Military Petroleum Corporation;
• Ba Ria – Vung Tau Petroleum Company (Petrolimex Bariavungtau);
• Petro Times Joint Stock Company.

Company establishment services of Viet An Law

• Legal advice on documents and procedures for registering petroleum business, License to qualify for petroleum business;
• Drafting documents, records, and papers for clients according to legal regulations;
• Representing clients, conducting procedures at state agencies to obtain a License;
• Regular legal advice after establishing a petroleum trading company.

Clients who need advice on regulations to set up a petroleum trading company in Vietnam, please contact Viet An Law Firm for the most effective support!