Who is the trader? Obligation of traders to register business in Vietnam

Who is the trader? Obligation of traders to register business in Vietnam (Internet image)

1. Who are traders?

Article 6 of the Commercial Law 2005 stipulates traders as follows:

- Traders include lawfully established economic organizations and individuals that conduct commercial activities in an independent and regular manner and have business registrations.

- Traders are entitled to conduct commercial activities in occupations and sectors, in geographical areas, in forms and by modes which are not banned by law.

- The right of traders to conduct lawful commercial activities is protected by the State.

- The State exercises for a definite time its monopoly over commercial activities in respect to a number of goods and services or in a number of geographical areas in order to ensure the national interests.

The Government shall specify the lists of goods, services and geographical areas subject to the State monopoly.

2. Obligation of traders to register business in Vietnam

Article 7 of the Commercial Law 2005 stipulates obligation of traders to register business as follows:

Traders are obliged to register their business according to the provisions of law.

Where traders have not yet registered their business, they are still held responsible for all of their activities according to the provisions of the Commercial Law 2005 and other provisions of law.

3. Foreign traders conducting commercial activities in Vietnam

Article 16 of the Commercial Law 2005 stipulates that foreign traders conducting commercial activities as follows:

- Foreign traders mean traders established and making their business registrations according to the provisions of foreign laws or recognized by foreign laws.

- Foreign traders are entitled to set up their representative offices or branches in Vietnam; to establish in Vietnam foreign-invested enterprises in the forms provided for by Vietnamese law.

- Vietnam-based representative offices and branches of foreign traders have the rights and obligations specified by Vietnamese law. Foreign traders shall be held responsible before Vietnamese law for all activities of their Vietnam-based representative offices and branches.

- Foreign-invested enterprises established in Vietnam by foreign traders according to the provisions of Vietnamese law or international treaties to which the Socialist Republic of Vietnam is a contracting party shall be regarded as Vietnamese traders.

4. Governing scope of commercial activities in Vietnam

Article 1 of the Commercial Law 2005 stipulates governing scope of commercial activities

- Commercial activities conducted in the territory of the Socialist Republic of Vietnam.

- Commercial activities conducted outside the territory of the Socialist Republic of Vietnam in cases where the involved parties agree to this Law for application, or where a foreign law or a treaty to which the Socialist Republic of Vietnam is a contracting party stipulates the application of the Commercial Law 2005.

- Activities not for profit purposes conducted by a party in its transactions with traders in the territory of the Socialist Republic of Vietnam in cases where the party conducting such not-for-profit activities chooses to apply Commercial Law 2005.

5. Regulations on brokers for purchase and sale of goods through the Goods Exchange in Vietnam

Article 69 of the Commercial Law 2005 stipulates that brokers for purchase and sale of goods through the Goods Exchange as follows:

- Brokers for purchase and sale of goods through the Goods Exchange shall be allowed to operate at the Goods Exchange only when they fully satisfy the conditions provided for by law. 

The Government shall specify the conditions for operation of brokers for the purchase and sale of goods through the Goods Exchange.

- Brokers for purchase and sale of goods through the Goods Exchange shall be allowed to conduct only activities of brokerage for purchase and sale of goods through the Goods Exchange and must not be a party to a contract for purchase and sale of goods through the Goods Exchange.

- Brokers for purchase and sale of goods through the Goods Exchange shall be obliged to deposit money at the Goods Exchange to secure the performance of their obligations arising in the course of goods purchase and sale brokerage activities.

The deposit level shall be set by the Goods Exchange.

6.  Prohibited acts of brokers for purchase and sale of goods through the Goods Exchange in Vietnam

Article 70 of the Commercial Law 2005 stipulates prohibited acts of brokers for purchase and sale of goods through the Goods Exchange as follows:

- Enticing customers to enter into contracts by promising to compensate the whole or part of loss incurred or to guarantee profits for them.

- Offering or conducting brokerage for goods without entering into contracts with customers.

- Using sham prices or other fraudulent measures in the course of brokerage.

- Refusing or unreasonably delaying the brokerage for contracts in accordance with contents agreed upon with customers.

Ngoc Nhi

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