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LEGAL INSIGHT

From 2024, FDI Enterprises that have been issued a Business License or a Retail Establishment License that do not submit an Annual Report on the implementation of the license may be fined and refused by the DOIT to process the application for License adjustment or even have the Licenses revoked.

At the end of 2023 and early 2024, FDI Enterprises submitting applications to adjust their Business License or Retail Establishment License (Licenses) at Ho Chi Minh City Department of Industry and Trade (DOIT) are required to submit additional reports on the implementation of the License for the most recent 2 years. If the enterprise does not submit a full additional report as required, the application to adjust the Licenses may be refused by DOIT, subject to administrative penalties, or even have the Licenses revoked.

This action shows that competent authorities such as MOIT and DOIT are tightening the enforcement of regulations on reporting obligations of licensed FDI Enterprises.

In fact, the regulations on the obligation to report on the implementation of annual licenses of FDI Enterprises were not recently issued but have been issued and effective from January 15, 2018, in Decree 09/2018/ND-CP by the Government. Accordingly, FDI Enterprises must submit a Report on the implementation of the Licenses during the year no later than January 31 of the following year. Sanctions for failure to report, provide documents, or explain issues related to enterprise operations to competent authority have also been stipulated. Specifically,

• Before October 15, 2020, fines range from 20,000,000 VND to 40,000,000 VND according to Decree 185/2013/ND-CP.
• From October 15, 2020 until now, FDI Enterprises that do not report according to regulations will be fined from 10,000,000 VND to 20,000,000 VND. Decree 09/2018/ND-CP also stipulates that if an FDI Enterprise does not implement the periodic reporting regime as prescribed for 24 consecutive months, it is likely to have its Licenses revoked.

However, it seems that from the time the regulations took effect from 2018 until the end of 2023, competent authorities have observed and encouraged the implementation of these regulations in the spirit of voluntariness and self-awareness of the business community and have not tightened the application of sanctions. After the above observation period, DOIT's current actions are showing that competent authorities are tightening and strictly managing compliance with periodic reporting obligations and providing information about Licensed FDI Enterprises. They are also beginning to be stricter in applying sanctions if enterprises violate these obligations, including fines, license withdrawal or refusal to process applications for License adjustment.

Therefore, ATIM LAW FIRM recommends that from 2024, FDI Enterprises have been issued a license for business activities such as retailing or importing and wholesaling oil, lubricants, machinery, equipment, and goods that use specific oils, lubricants or logistics services or other related activities must submit a full report on the implementation of the previous year's license. Specifically, the 2023 license implementation status report must be submitted no later than January 31, 2024. The report is made according to the form attached to Decree 09/2018/ND-CP and sent by post to the address of DOIT that issued the Licenses. In case the deadline has not yet been met, Enterprises should still quickly complete the additional submission as soon as possible.

If your business has questions or needs further advice, please contact: Ms. Mai Thi Hue Senior Associate Email: huemt@atim.com.vn - Phone: 0915.111.365