Korean investors operating in wholesale and retail of electric motorbikes in Vietnam

According to statistics from the Ministry of Planning and Investment, by the end of October 2024, there were 106 countries and territories investing in Vietnam, of which the top 3 countries and territories were Singapore, China and South Korea. It can be seen that South Korea is in the top 3 countries and territories investing in Vietnam. 

Currently, Ho Chi Minh City is one of the localities receiving the most investment capital in the country, second only to Bac Ninh. In this article, the author will clarify the wholesale and retail operation process of electric motorbikes of Korean investors in Vietnam. 

1. Market access conditions for foreign investors 

Korea has been a member of the WTO since January 1st, 1995. Pursuant to the WTO Commitments on Services, Wholesale trade services and Retail trade services are services that Vietnam has committed to open the market to foreign investors. Accordingly, the investors from Korea are allowed to invest in Vietnam to provide wholesale and retail services. 

However, item 22 point B Appendix I of Decree 31/2021/ND-CP stipulates that the trading of goods and activities directly related to the trading of goods by foreign service providers in Vietnam are industries and occupations with conditional market access for foreign investors. Article 3.1 of Decree 09/2018/ND-CP stipulates that the trading of goods and activities directly related to the trading of goods include activities such as exercising the right to export, import, wholesale distribution, retail distribution of goods, etc. Accordingly, Article 5.1.(a) of Decree 09/2018/ND-CP stipulates that Korean investors must apply for a Business License when retailing electric motorbikes.  

In addition, according to Section II Appendix I of Decree 69/2018/ND-CP, the used motorbikes are on the list of goods prohibited from import and under the management authority of the Ministry of Industry and Trade. Therefore, Korean investors are only allowed to import unused electric motorbikes to Vietnam for resale to other organizations and individuals. 

2. Steps to establish a foreign-invested company operating in wholesale and retail of electric motorbikes

a. Applying for an Investment Registration Certificate: 

• According to Point a, Clause 1, Article 37, and Clause 2, Article 39 of the Law on Investment 2020, Korean investors must complete the procedures to apply for an Investment Registration Certificate at the Department of Planning and Investment where the project is carried out. 

• However, the investors need to note two key issues:

• • They must demonstrate financial capacity through the financial statements of the last two years or a bank statement showing a balance equal to or greater than the proposed registered investment capital. 

• • Provide a Memorandum of Understanding or a Lease Agreement to prove the location of the project. 

b. Applying for an Enterprise Registration Certificate:  

• After obtaining the Investment Registration Certificate, the investors will proceed to apply for an Enterprise Registration Certificate to establish a company. According to the Enterprise Law 2020, there are three types of enterprises that the investor can consider: 

• • A single-member limited liability company, owned by the investor.

• • A limited liability company with two or more members, ranging from 2 to 50 members, where Korean investors can contribute capital together or with Vietnamese investors. 

• • A joint-stock company with three or more shareholders. 

• Investors need to consider two key issues during and after the issuance of the Enterprise Registration Certificate: 

• • The company can have one or more legal representatives. However, at least one legal representative must reside in Vietnam. 

• • Investors are obligated to fully contribute the committed capital in the correct form within 90 days from the date of issuance of the Enterprise Registration Certificate. 

c. Other required licenses: 

• As mentioned in part 1, after completing the above company establishment steps, the investor will apply for a Business License and/or a Retail Establishment License if the investor plans to retail electric motorbikes at showrooms and stores. 

The above information outlines the key points to note when Korean investors conduct wholesale and retail activities of electric motorbikes in Vietnam. 

See more:

1/ Chinese investors production activities of beds, cabinets, tables and chairs in Vietnam

2/ Foreign investors operating restaurants outside shopping centers

3/ Hong Kong investors engaging in architectural services and technical consultancy in Vietnam

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