What is a Merchant?

Once upon a time, individuals who specialized in trading goods and engaging in free commercial exchanges for the purpose of seeking profit were called merchants or traders.

Nowadays, merchants are entities regulated quite strictly under commercial law. According to the Commercial Law 2005, merchants are economic organizations established according to the provisions of law and individuals conducting commercial activities frequently, independently, and registered for business as per applicable law.

From the above concept, it can be seen that to become a merchant, the following conditions must be met:

First, regarding the subject:

- Individuals (Vietnamese citizens and foreign citizens): Must have full civil act capacity, not be subject to criminal prosecution or serving a prison sentence, and not in a period of being stripped of the right to practice due to smuggling, speculation, etc.;- Economic organizations that are legally established in accordance with the provisions of law.

Second, individuals or economic organizations must engage in commercial activities, which means engaging in the sale of goods, provision of commercial services, promotion of trade, and other profit-seeking activities.

Third, conduct commercial activities independently legally. This means that individuals or organizations must participate in commercial activities or commercial transactions as independent legal subjects. They must have the capability, by their own actions, to participate in legal relationships in their own name and bear responsibility for those actions by themselves. Branches and representative offices of enterprises are not merchants because they do not have the capability to participate in and bear independent responsibility in legal relationships but are merely dependent units of merchants.

Fourth, commercial activities must be conducted regularly by individuals or organizations. This means commercial activities must occur continuously, not interrupted or merely temporarily, with the main source of income being profit from commercial activities.

Fifth, to become a merchant, an individual must register for business; economic organizations will emerge as legal subjects and simultaneously as merchants from the moment they are granted an Enterprise Registration Certificate by the competent authority. If not registered for business, merchants still have to bear responsibility for all their activities according to this Law and other provisions of law. Business registration is a mandatory condition; if an individual carries out some business activities for profit but is not required to register for business according to the provisions of business registration law, they will not be considered a "merchant."

Relevant documents:

Commercial Law 2005

Decree 39/2007/ND-CP on independent and regular commercial activities without business registration

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