Regulation on import and wholesale and retail of new and used cars in Vietnam

Question: We are the FDI in Vietnam, we would like that SBLAW may support the Company with the supplement of Company’s business lines of import and wholesale and retail of new and used cars (hereinafter is referred to as “Business Lines”).

Answer: SBLAW would like to advise as follows:

I. OUR PRELIMINARY COMMENTS

1. According to Article 15 Decree 116/2017/ND-CP dated 17^th October 2017 regarding requirements for manufacturing, assembly and import of automobiles and trade in automobiles and warranty and maintenance services, the automobiles importer must obtain a license for automobiles import. For this purpose, following requirements must be satisfied:

• To have an automobile warranty and maintenance facility owned or leased by the Company, or belonging to the company’s authorized dealer network;
• To have a written certification or document proving that the Company is authorized to act on behalf of the foreign automobile manufacturer and assembler to issue a recall order for imported cars in Vietnam;

2.According to Article 21 of Decree 116/2017/ND-CP, for carrying out motor vehicle, warranty/maintenance services, the service provider must obtain a certificate of eligible motor vehicle warranty/maintenance center. The license shall be granted subject to following requirements:

• The factory is built on the land area under legal ownership of the trader.
• The premises and factory ensure warranty/maintenance services.
• There are areas for reception, transfer, maintenance, repair, factory inspection, operation building, warehouse storing automotive parts and accessories and motor vehicle wash to meet the workload.
• There are adequate facilities for motor vehicle warranty/maintenance services. Measurement facilities used for motor vehicle warranty/maintenance services comply with regulations of law on measurement.
• The equipment used to diagnose engines and specifications of motor vehicles (in case of motor vehicles having electronic control units) is suitable for the motor vehicle classes that the center in charge. Diagnosing equipment software complies with regulations on intellectual property rights.
• Personnel and quality management system ensure the quality of motor vehicle warranty/maintenance services.
• The aforesaid requirements shall satisfy requirements for premises, facilities, personnel and quality management system for motor vehicle maintenance and repair centers for each corresponding motor vehicle class mentioned in the national standard TCVN 11794 on motor vehicle warranty and maintenance centers and equivalent vehicles.
• Commitments are made to technical support and provision of automotive parts and accessories for motor vehicle warranty/maintenance services of: (i) domestic manufacturers/assemblers (if providing warranty/maintenance services for domestic manufacturers/assemblers); or (ii) Foreign manufacturers/assemblers (if providing warranty/maintenance services for motor vehicle importers).
• Accordingly, in order to register importation, retail and wholesale distribution activities, the Client shall be required to undergo the following steps:

a) Step 1: Amend the Investment Registration Certificate (“IRC”)

• At present, activity of import, wholesale and retail of new and used cars has not yet been recorded in the IRC of Client. Therefore, the Client need to add this activity into the project objectives in the IRC at first.

b) Step 2: Supplementing the Business Lines in the Enterprise Registration Content of the Company

• We shall apply for amendment of enterprise registration contents to add business lines of import, wholesale and retail of new and used cars into the list of business lines of Company.

c) Step 3: Obtaining the Business License for the wholesale of automobiles

• Retailing involving selling goods to individuals, households, other organizations for consumption purpose.
• According to Article 5.1(c) of Decree 09/2018/ND-CP dated 15^th January 2018 guiding Law on commerce and the Law on foreign trade management regarding sale of goods and other activities directly related to sale of goods of foreign investors and foreign-invested enterprises in Viet Nam, a business license to be issued to a foreign-invested enterprise to perform the retail distribution right.

d) Step 4: Obtain License for the establishment of automobiles retail outlet

• Retail outlet means the place where retailing activities is conducted.
• According to Article 5.2 Decree 09/2018/ND-CP, a license for establishment of retail outlet is issued to a foreign-invested enterprise setting up a retail outlet.

e) Step 5: Obtain Certificate of eligible automobiles warranty and maintenance facility

In order to obtain the license for automobiles import, the Client is required to have an automobile warranty and maintenance facility. Then, the Client need to obtain Certificate of eligible automobiles warranty and maintenance facility for this facility.

f) Step 6: Obtaining the License for import of automobiles.

II.SCOPE OF WORK AND PERFORMANCE TIME

1.The expected roadmap for the licensing procedure can be described as follows:

Preparing the application dossier: We shall collect necessary information and documents from you. Upon receipt of necessary information and documents from you, we shall translate documents from English into Vietnamese and prepare the application dossier under the standard forms. The initial drafted application dossier shall be sent to you for your comments. Then, after updating the application dossier based on your comments, we shall obtain the preliminary comments from the competent authority and send the finalized application dossiers for you to sign and seal. We anticipate that this phase shall be completed within from 10 working days. The prepared documents shall then be sent to you for review, signing and seal.

Licensing procedure:

(i) Amending the Investment Registration Certificate: Within 02 working days from receipt of duly signed and sealed application dossier, we shall submit the application dossier to the competent authority. Within 20 working days from submission of application dossier to Licensing Agency, we shall obtain the amended Investment Registration Certificate for the Client.

(ii) Supplementing the business nines in the Enterprise Registration Content of the Company: Within 02 working days from receipt of the revised Investment Registration Certificate, we shall submit the application dossier for changing enterprise registration content to Licensing Agency. Within 05 working days from submission of application dossier to Licensing Agency, we shall obtain Confirmation on the change of Enterprise Registration Content for the Client.

(iii) Obtaining the Business License for the wholesale of automobiles: Within 02 working days from receipt of Confirmation on the change of Enterprise Registration Content, we shall submit the application dossier to the competent authority. Within 45 working days from submission of application dossier to Licensing Agency, we shall obtain Business License for the Client.

(iv) Obtaining License for the establishment of automobiles retail outlet: Within 02 working days from receipt of duly signed and sealed application dossier, we shall submit the application dossier to the competent authority. Within 45 working days from submission of application dossier to Licensing Agency, we shall obtain License for the establishment of automobiles retail outlet for the Client.

(v) Obtaining the Certificate of eligible automobiles warranty and maintenance facility: Within 02 working days from receipt of duly signed and sealed application dossier, we shall submit the application dossier to the competent authority. Within 40 working days from submission of application dossier to Licensing Agency, we shall obtain Certificate of eligible automobiles warranty and maintenance facility for the Client.

(vi) Obtaining the License for import of automobiles: Within 02 working days from receipt of duly signed and sealed application dossier, we shall submit the application dossier to the competent authority. Within 25 working days from submission of application dossier to Licensing Agency, we shall obtain License for import of automobiles for the Client.

For avoidance of doubts, we confirm that administrative procedures at competent state agencies may be lengthened in practice because the competent authority might consult with relevant departments and ministries before licensing. Under such conditions, SB Law will make reasonable efforts to accelerate work in order to receive licensing results as soon as possible.

III. Our scope of work: