Three legal matters important for manufacturers in Vietnam
Firstly, in regards of the location of headquarters: Enterprises operating in the sectors of producing, processing, farming, etc. are not permitted to be headquartered in densely populated areas or urban areas, but only in the adjacent regions far away from residential areas. In the case where an enterprise wishes to place its headquarters within the city, such enterprise may only conduct the activities of purchasing and selling goods and displaying products and is required to establish factories/branches in adjacent areas for production, processing, farming, etc.
The People’s Committee of Ho Chi Minh City has promulgated Decision No. 200/2004/QĐ-UBND on August 18, 2014. Accordingly, the Ho Chi Minh City People’s Committee shall not grant new Business Registration Certificate to enterprises located in densely populated areas and operating in the following sectors, namely: basic chemical manufacturing and the manufacturing of batteries, storage batteries, pesticides, refrigerants, alum, detergents, dyes, paints, etc. In the event where the need to conduct production activities at a different address other than the headquarters located in residential areas arises, enterprises may apply for business registration of the abovementioned sectors and commit not to conduct these at the headquarters.
For enterprises in densely populated areas, manufacturing and trading in the aforementioned business sectors must comply with the relocation plan of the Municipal People’s Committee; if relocation is done promptly and accurately as planned, the enterprises will be rewarded according to the provisions of the city.
Pending relocation, operating enterprises are required to be in strict compliance with the standards and regulations on environmental protection.
Secondly, regarding regulations on environmental protection: Depending on the nature, scale and capacity of a project, the project owner must draft and register Environmental Protection Commitment or make a report on environmental impact assessment and submit to the competent authority for evaluation and approval as provided for by laws.
Enterprises are obliged to register Environmental Protection Commitment as prescribed by laws; if they fail to comply with the requirement, enterprises not subject to investment project establishment will be fined 2 million to 3 million VND, whereas those subject to investment project establishment will face fines ranging from 40 million to 50 million VND.
Similarly, enterprises are also required to submit approved Environmental Impact Assessment Reports; in case of failed compliance, enterprises will be fined 200 million to 250 million VND. Apart from financial penalties, the violating enterprises will also be suspended from operation from six to 12 months.
Thirdly, in regards of sublicenses: Depending on certain manufacturing and trading sectors, enterprises are required to apply for one or several business licenses/business eligibility certificates/other documentation (collectively referred to as “sublicenses”) as provided for by laws before operating.
For instance:
Regarding to to the business sectors of seal production, industrial explosive material production or those involving the use of industrial explosives, enterprises must possess a Certificate of Security and Order Qualification.
Relating to the manufacturing sector of food packaging materials, enterprises must have a Certificate of Food Safety Qualification and Receipt of the written publication of regulation conformity (regarding products with technical regulations) or a written Certification of conformity publication of food safety regulations (regarding products without technical regulations).
