Conditions for registering brokering services for trading commodities for foreign invested enterprises in export processing zones

Conditions for registering brokering services for trading commodities for foreign invested enterprises in export processing zones
Conditions for registering brokering services for trading commodities for foreign invested enterprises in export processing zones

1. What are brokering services for trading commodities? 

According to the Vietnam Standard Industrial Classification issued with Decision No. 27/2018/QD-TTg dated July 6th, 2018, brokering service for trading commodities has VSIC code 46102 and is classified into group “461-4610: commission agents, brokers and auction agents”. 

Accordingly, brokering services for trading commodities are activities in which the trader is an intermediary (broker) for parties buying and selling goods (brokered parties) regarding various types of goods, include:  

  • Agricultural and forestry products in their original form, live animals, raw textile materials and semi-finished products; 
  • Fuels, ores, metals and industrial chemicals, fertilizers; 
  • Food, beverages and tobacco; 
  • Textiles, clothing, fur, footwear, leather and faux leather products; 
  • Timber and building materials; 
  • Machinery, including office machinery and computers, industrial equipment, ships and aircraft; 
  • Beds, wardrobes, tables, chairs and similar furniture, household appliances, household goods and hardware.  

Currently, the list of sectors/sub-sectors listed in the WTO Schedule of Commitments as well as the description of sectors/sub-sectors in the United Nations’ PCPC abovementioned does not have a specific classification or description of brokering services for trading commodities. Therefore, foreign-invested enterprises may encounter difficulties when registering their business lines. 

2. Notes when applying for amending business lines 

To register the business line “Brokering services for trading commodities”, businesses submit an registration application for the amending business line specifically stipulated in Decree 01/2021/ND-CP on enterprise registration. The dossier components are specifically specified as follows: 

  • A notification of changes to enterprise registration information which is signed by the enterprise’s legal representative; 
  • The resolution or decision and the copy of the minutes of meeting of the Board of Members of the multi-member limited liability company or partnership, or of the General Meeting of Shareholders of the joint-stock company, or the resolution or decision of the owner of the single-member limited liability company on change of business lines; 
  • Power of Attorney for the individual to submit the application in case the applicant is an authorized representative; 
  • Notarized copy of the applicant’s legal documents. 

However, some “special” Joint Stock Companies (such as Public Companies) when submitting dossiers to notify changes in business lines, in addition to submitting documents and records according to the regulations on dossier components according to the provisions of the Law on Enterprise, the Company needs to supplement a Statement of the General Meeting of Shareholders to record the amendment of the company’s business lines. 

Besides, joint stock companies should note that the Minutes of the General Meeting of Shareholders must show the number of shareholders attending the meeting and that the percentage of votes in favor of approval and the one in favor of disapproval match each other to avoid cases where the recorded data different or if different, it needs to be clearly explained. 

3. Notes for foreign-invested enterprises operating in export processing zones 

Export processing zone is defined under the Law on Investment 2020 as an industrial park specialized in manufacturing of exported products or provision of services for manufacturing of exported products and export. In recent years, foreign investors have tended to choose areas of export processing zones, industrial parks, etc. as places to carry out their production and business activities because the above areas are designated areas which are entitled to investment preferences. However, when operating in an export processing zone, an enterprise will be under the management of the Export Processing Zone Authority if there is an activity to adjust the contents of the Investment Registration Certificate for an investment project according to the provisions of Clause 1, Article 39 of the Law on Investment 2020. This means that when an enterprise adjusts the project implementation goal, specifically amending the business line “brokering services for trading commodities”, the Export Processing Zone Authority still has the right to review and approve or reject the business’s application. 

Although the procedure for amending business lines on the Enterprise Registration Certificate is under the authority of the Business Registration Office – Department of Planning and Investment where the enterprise has its headquarters address. However, according to Apolat Legal’s experience, the “Brokering services for trading commodities” is a business line that has not been committed to the WTO Schedule of Commitments and the enterprise is also located in an export processing zone in this case, so the Business Registration Office will send an official dispatch to consult with the Export Processing Zone Authority on amending the business line ” Brokering services for trading commodities ” for the enterprise. In fact, the Export Processing Zone Authority will refuse the enterprise’s request to add amending business line on the grounds that brokerage services for trading commodities are not within the scope of the export processing zone’s activities and the Business Registration Office can reject the enterprise’s application from the Export Processing Zone Authority’s point of view. However, with its experience and ability to grasp and understand legal regulations, Apolat Legal has successfully assisted a foreign-invested enterprise that was allowed by the Department of Planning and Investment to operate in its industry “Brokering services for trading commodities” with operating conditions in accordance with the regulations of the Department of Planning and Investment and the Export Processing Zone Authority. 

Above are some basic legal issues related to registration for amending the business line “Brokering services for trading commodities” for foreign-invested enterprises operating in export processing zones. Based on the specific characteristics of each enterprise, the enterprise needs to comply with the law and at the same time meet the operating conditions of the Department of Planning and Investment and the Export Processing Zone Authority. 

 


Disclaimers:

This article is for general information purposes only and is not intended to provide any legal advice for any particular case. The legal provisions referenced in the content are in effect at the time of publication but may have expired at the time you read the content. We therefore advise that you always consult a professional consultant before applying any content.

For issues related to the content or intellectual property rights of the article, please email cs@apolatlegal.vn.

Apolat Legal is a law firm in Vietnam with experience and capacity to provide consulting services related to Business and Investment and contact our team of lawyers in Vietnam via email info@apolatlegal.com.

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