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CONDITIONS FOR FOREIGN INVESTORS TO TRADE IN PETROLEUM
Foreign investors who want to do business in petroleum in Vietnam must meet the legal conditions according to international regulations and Vietnamese law. So what are the conditions for foreign investors to do business in petroleum? Please join Siglaw to find out the details in this article:
WHAT IS PETROLEUM BUSINESS?
According to Clause 2, Article 3 of Decree 83/2014/ND-CP on Petroleum Business,“Petrol and oil trading covers export (of domestically produced petrol and oil and raw materials and imported petrol and oil and raw materials), import, temporary import for re-export, border-gate transfer and export processing of petrol and oil and raw materials; production and processing of petrol and oil; distribution of petrol and oil on the domestic market; and provision of services of warehouse and port leasing and receipt, preservation and transportation of petrol and oil.”
Thus, it can be seen that the current law defines “petroleum business” by listing a series of activities that are considered to be performing petroleum business activities.
LAWS REGULATING FOREIGN INVESTORS IN PETROLEUM BUSINESS IN VIETNAM
Foreign investors wishing to invest in the petroleum business sector must meet investment conditions according to the provisions of Vietnamese law and international treaties to which Vietnam is a member. Specifically, foreign investors investing in basic telecommunications services will be subject to the following documents: WTO Agreement, FTAs, ACIA; Investment Law 2020 and a number of guiding decrees.
CONDITIONS FOR FOREIGN INVESTORS IN PETROLEUM BUSINESS ACCORDING TO INTERNATIONAL REGULATIONS (ACCORDING TO WTO, FTAS, ACIA)
The provisions in international treaties to which Vietnam has participated place restrictions on the right to distribute crude oil and processed oil for foreign investors. This is of great significance in the management and control of the country’s petroleum resources.
Foreign investors are not allowed to directly operate or operate in the form of ownership or management of distribution rights for crude oil and processed oil in the Vietnamese market. This regulation limits the rights of foreign investors in the petroleum industry and aims to protect national interests, ensure energy security and sustainable development of the domestic petroleum industry.
Instead, foreign investors can participate in cooperation with units in the process of exploiting, processing and transporting petroleum. They can invest in petroleum exploitation projects, set up processing plants in Vietnam or export processed petroleum according to the country’s export and import regulations.
This regulation helps create a fair business environment, while ensuring the protection and control of Vietnam’s petroleum resources. This also demonstrates Vietnam’s commitment to complying with international rules and standards in the oil and gas industry, while ensuring the sustainable and safe development of the domestic energy industry.
CONDITIONS FOR FOREIGN INVESTORS TO TRADE IN PETROLEUM UNDER VIETNAMESE LAW
EXPORT AND IMPORT OF PETROLEUM
First, conditions on business registration. Investors wishing to do business in petroleum must have registered for petroleum business in the Certificate of Business Registration granted to the investor under Vietnamese law.
Second, conditions on facilities.
- Investors must own or co-own or lease for 5 years a specialized wharf in Vietnam’s international port system, provided that the wharf must be able to receive petroleum tankers or other petroleum transport vehicles with a minimum capacity of 7,000 tons.
- Own or lease for 5 years a warehouse receiving imported petroleum with a minimum capacity of 15,000 m3. Within 3 years from the date of issuance of the Sub-license for petroleum export and import business, the trader must own/co-own with a minimum capital contribution of 51% of the charter capital for the warehouse system and be able to meet at least 1/3 of the trader’s reserve needs
- Own or lease for 5 years domestic petroleum transport vehicles. Within 2 years from the date of issuance of the Petroleum Export and Import Business License, the trader must own/co-own with a minimum capital contribution of 51% for domestic petroleum transport vehicles with a total capacity of at least 3,000 m3.
- Have a qualified petroleum distribution system
- Must have a means of fueling aviation fuel owned or co-owned by the trader.
Thirdly, ensure compliance with the planning of petroleum export and import traders.
CONDITIONS FOR PETROLEUM PRODUCTION
- Firstly, have registered petroleum business in the Business Registration Certificate.
- Second, the investor has a petroleum production facility in accordance with the planning granted an Investment Certificate.
- Third, the investor owns a testing room and ensures sufficient capacity to inspect and test petroleum quality indicators according to KTQG standards
CONDITIONS FOR PETROLEUM DISTRIBUTION
- Having a petroleum business registration in the Business Registration Certificate.
- Having a warehouse or tank with a minimum capacity of 2,000 m3
- Having a team of managers and direct business staff who must be trained, coached and have training certificates, professional training in fire prevention, fire fighting and environmental protection according to current law provisions.
- Having means of transporting petroleum
- Having a petroleum distribution system
- Having a testing room
In addition, the state also has separate regulations with details for a number of other petroleum business sectors in Decree 83/2014/ND-CP, amended by Decree 95/2021/ND-CP, investors need to carefully study or receive advice from Siglaw to be able to invest in this field smoothly.
Above is information on the topic “Conditions for foreign investors to trade petroleum” from the staff of Siglaw Law Firm. If you have any problems that need to be resolved, please contact Siglaw for the fastest and completely free support.
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