This content is from: Local Insights

Vietnam: Commercial brokerage services

Huong Thi Thanh Nguyen

Vietnam started opening its market for distribution services in 2007, immediately upon its official accession into the World Trade Organisation (WTO). Until 2010, the door for foreign trading companies was fully open for three main trading services, namely: (i) commission agent services, (ii) wholesale trade services, and, (iii) retailing services, except for certain kinds of products that were expressly reserved under Vietnam's WTO commitments as regards services; and the limitation on the permitted number of retail outlets, which was subject to the so-called economic needs test.

While the number of foreign-invested trading companies being established has increased since then, foreign investors still find it difficult or even impossible to engage in commercial intermediary activities in Vietnam.

In particular, commercial brokerage services have been closed to foreign investors, as Vietnam did not commit to opening the market for this type of business. As such, the Vietnamese authorities (namely, the Ministry of Industry and Trade) have sole discretion on whether a particular foreign investor is allowed to engage in commercial brokerage services in Vietnam, and this is subject to the prevailing policy of the country at the time.

The good news is that it has been revealed that, from the beginning of 2015, the Ministry of Industry of Trade has loosened the policy and has started to allow some foreign investors to engage in commercial brokerage on a pilot basis, within a determined time frame. This new policy, although still at an experimental stage and determined on the basis of strict criteria on a case-by-case basis, is a positive sign for foreign investors, with hope of a wider door for commercial activities in the future.

Vietnam's Commercial Law 2005 defines commercial brokerage as a commercial activity through which a business entity provides brokerage services for which it is remunerated under a contract. Those services include the entity acting as an intermediary between parties selling and purchasing goods or providing services during the negotiations and signing of contracts for the sale and purchase of goods or the provision of services.

Huong Thi Thanh Nguyen

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