Anyone working in commercial business or related professions has heard “trade promotion” . However, do you understand correctly and accurately such a term “trade promotion”?, so What is trade promotion? What are the characteristics of trade promotion? Let's find out together with NPLAW through this article.
Anyone working in commercial business or related professions has heard “trade promotion” . However, do you understand correctly and accurately such a term “trade promotion”?, so What is trade promotion? What are the characteristics of trade promotion? Let's find out together with NPLAW through this article.
I. What is trade promotion?
Trade promotion is an activity that promotes and seeks opportunities to purchase and sell goods and provide services, including promotional activities, commercial advertising, display, introduction of goods and services, and trade fairs and exhibitions (Clause 10, Article 3 of the Commercial Law 2005).
Therefore, trade promotion plays an important role in purchasing and selling goods and providing services developed towards industrialization and modernization, enhancing the competitiveness and efficiency of enterprises and contributing to the expansion of the market.
II. Principles of the foreign trade promotion organization in Vietnam.
The trade promotion activities have been organized inside and outside Vietnam, which is crucial in trade and service supply. Thus, the activities of the foreign trade promotion organization in Vietnam must be based on the following principles:
- Foreign trade promotion organizations include government or non-governmental organizations, associations (or other equivalent forms) established in accordance with the laws of the country where organizations are headquartered. In addition, when conducting activities related to trade promotion in Vietnam, these organizations must establish their representative offices in Vietnam.
For example: the European Business Association in Vietnam (EuroCham Vietnam) in collaboration with the Ministry of Industry co-organized the high-level conference and Green Economy Forum & Exhibition (GEFE) 2022 in THISO SkyHall, Ho Chi Minh City.
-Trade promotion organizations do not include foreign traders, foreign non-governmental organizations, organizations of cooperation and research, educational cultural institutions and foreign organizations regulated in other legal documents.
- A foreign trade promotion organization is allowed to establish 01 representative office in a province or city under central.
- The Charter (operation rules) of the representative office of the foreign trade promotion organizations in Vietnam must comply with the Vietnamese laws. The representative office shall not operate profit-making activities directly in Vietnam.
- The representative office is a unit of the foreign trade promotion organization and is not allowed to establish a new representative office under it.
- The head and personnel of the representative office in Vietnam are assigned by the foreign trade promotion organization and must be registered with the licensing authorities.
- The recruitment and appointment of foreigners working in the Vietnamese representative office must comply with Vietnamese laws and be consistent with Vietnam's commitments in international treaties to which Vietnam is a member.
- Being liable before the Vietnamese law for all operations of its representative office.
Legal basis: Article 24 of Decree No. 28/2018/ND-CP regulating the Law on Foreign Trade Management regarding some measures for foreign trade development.
III. Operation contents of the representative office of the foreign trade promotion organization in Vietnam.
Pursuant to Clause 1, Article 25 of Decree No. 28/2018/ND-CP regulating Law on Foreign Trade Management regarding some measures for foreign trade development, the Representative Office of the foreign trade promotion organization shall only implement activities related to trade promotion in Vietnam under the following contents:
- The representative office operates as a contact office;
- In addition, the representative office also performs activities to promote and support foreign enterprises in accessing and operating in the Vietnamese market; research and provide economic, trade and market information to foreign businesses and organizations; promote foreign trade activities with Vietnam with the aim of business connection between foreign enterprises and Vietnamese organizations and enterprises;
- Besides, the representative office performs other trade promotion activities in accordance with the Law.
IV. Rights and obligations of the representative office of the foreign trade promotion organization in Vietnam
Pursuant to Clause 1 Article 25 of Decree No. 28/2018 / ND-CP regulating the Law on Foreign Trade Management regarding some measures for foreign trade development, the representative office of the foreign trade promotion organization has the following rights and obligations:
- The representative office is obliged to operate strictly as prescribed in the contents specified in the Establishment License of the representative office;
- The representative office has the right to hire headquarters and recruit employees to work in the representative office according to the current provisions of the Vietnamese laws;
- The representative office registers and uses the seal according to the current provisions of Vietnamese laws;
- The representative office shall neither act as a representative for another trade promotion organization nor sub-lease its headquarters;
- Foreigners working in representative offices must have work permits according to Vietnamese laws.
V. Questions
1. In order to establish a representative office of the foreign trade promotion organization in Vietnam, what does the dossier include?
When Clients want to establish a representative office of the foreign trade promotion organization in Vietnam, Clients need to prepare the following documents:
- Proposal for issuing the Establishment License of the Representative Office in the form promulgated by the Ministry of Industry and Trade, and it is signed by a competent representative of a foreign trader;
- A copy of the Business Registration Certificate or other equivalently value documents of a foreign trader;
- A document of a foreign trader appointing the head of its representative office;
- A copy of audited financial statements or documents confirming the performance of tax or financial obligations in the last fiscal year or equivalent documents issued by competent authorities or organizations where a foreign trader establish its representative office certifying and proving their existence and activities in the last fiscal year;
- A copy of passport or identity card or citizen identity card for Vietnamese people or a copy of passport for foreigners of the Head of the Representative Office;
- The dossier of an expected location of the representative office includes:
+ A copy of the memorandum or agreement to lease a location or a copy of documents proving that the trader has the right to exploit and use an expected location for the Representative Office;
+ A copy of documents on an expected location for the Representative Office placement as prescribed in Article 28 of this Decree and relevant legal provisions.
Note: The following documents must be translated into Vietnamese and certified according to Vietnamese law: Business Registration Certification or equivalent documents; documents appointing the head of its representative office; audited financial statements or documents confirming the performance of tax or financial obligations in the last fiscal year or equivalent documents certifying and proving their existence and activities in the last fiscal year; a copy of passport for foreigners of the Head of the Representative Office.
The business registration certification or equivalent documents of foreign traders must be certified by the diplomatic missions and consular offices of Vietnam abroad in accordance with the provisions of Vietnamese law.
2. Which agency has the authority to issue the establishment license for representative office? How long is the processing term?
The foreign trade promotion organization submits a written request to the Ministry of Industry and Trade for issuance of the establishment License for the representative office in Vietnam. Thus, the competent authority for issuing the License is the Ministry of Industry and Trade where the representative office is proposed to be located.
The processing term of the application is within 15 working days from the date of receipt of the complete application, the licensing authority considers and issues the establishment License for the foreign trade promotion organization. In case of rejection, the licensing authority shall send a written notice in which reasons for rejections shall be specified.
3. In case of rejecting to issue the establishment License for the representative office
If it falls under any of the following circumstances, the application for issuing the establishment License for the representative office will be rejected:
- The foreign trade promotion organization failing to meet the operation principles and contents according to Vietnamese law isn’t subject to being issued the License;
- The foreign trade promotion organization applies for the license within 02 years from the date of revocation of the Vietnam-based representative office license;
- If there is evidence that the establishment of the representative office causes harm to national defense, security, social security and order, history, culture and customs, and the health of Vietnamese citizens, as well as destroys resources and pollutes the environment, the License shall be issued;
- When the application for the representative office license is incomplete in accordance with the Law, it shall be rejected unless having supplement and amendment;
- Foreign organizations and individuals subject to the list of imposed sanctions under Resolutions of the United Nations Security Council (UNSC) will not be issued the License to establish the representative office in Vietnam.
The above concerns what needs to be known about the foreign trade promotion organization in Vietnam. This information helps us know that the organization plays a crucial role in purchasing and selling goods and providing services, its representative office is established and operates in accordance with Vietnamese law.
If you have any questions about the above issue, please contact NP LAW. We provide legal services of the representative office establishment for foreign trade promotion organizations in Vietnam as follows:
- Advice on the establishment of the representative office of the foreign trade promotion organization in Vietnam;
- Support in drafting the application for representative office establishment of the foreign trade promotion organization in Vietnam;
- Application for the representative office License of the foreign trade promotion organization in Vietnam;
- Registration of seal and application for seal certificate for the representative office of the foreign trade promotion organization in Vietnam;
- Registration and completion of procedures for issuing the tax code to the representative office of the foreign trade promotion organization in Vietnam;
- Other legal services related to the representative office establishment of the foreign trade promotion organization in Vietnam.
