FDI Lubricant Business License in Vietnam

An FDI lubricant business license in Vietnam is a mandatory legal requirement before a foreign-invested enterprise can import and conduct wholesale distribution of lubricating oils and greases. As a conditional business sector, obtaining this license requires the enterprise to meet legal and financial capacity criteria and comply with specialized regulations on import-export and trade.

Conditions for a Business License

The conditions for granting a business license to a foreign-invested enterprise are detailed in Decision 233/QĐ-BCT, issued by the Minister of Industry and Trade on January 18, 2018. The foreign-invested organization must ensure:

• A specific financial plan to execute the activities for which the Business License is requested. This condition proves the organization’s financial strength to maintain stable import and wholesale distribution of lubricating oils and greases.
• No overdue tax debts if the enterprise has been established in Vietnam for one year or more. A clean tax record demonstrates the credibility and financial management capacity of the foreign-invested organization.
• Compliance with criteria regarding suitability with specialized laws and the level of competition with domestic enterprises.
• The capacity to create employment for the domestic workforce and the level of contribution to the state budget.
• Crucially, the organization must either manufacture lubricating oils and greases in Vietnam or manufacture/distribute machinery and equipment that uses special-purpose lubricating oils and greases.

Meeting all conditions, from financial capacity and tax obligations to direct production activities in Vietnam, is a mandatory requirement for any foreign-invested economic organization seeking to enter the lubricant import and distribution market.

Business Registration Procedure for a Foreign-Invested Enterprise

The business registration procedure for a foreign-invested enterprise in Vietnam differs significantly from that for a domestic enterprise. The process involves two main stages: obtaining an Investment Registration Certificate (IRC) and then establishing the enterprise.

Step 1: Prepare the dossier for an Investment Registration Certificate (IRC) as per Clause 1, Article 33 of the Investment Law 2020 (if implementing an investment project).

• An application form for the implementation of an investment project (Form A.I.1, Appendix A, Circular 25/2023/TT-BKHĐT of the Ministry of Planning and Investment, dated December 31, 2023).
• For an organization, a copy of the Certificate of Incorporation or equivalent legal document; for an individual, a copy of the ID card or Passport.
• An investment project proposal detailing the investor, objectives, capital, project scale, capital mobilization plan, location, duration, investment schedule, labor needs, and socio-economic impact assessment.
• Proof of financial capacity: the last two years of financial statements for an organization, or a bank account balance confirmation for an individual.
• A lease agreement for the head office and documents proving the lessor’s right to lease.
• For projects using technology on the list of restricted technologies for transfer, a detailed explanation of the technology’s name, process diagram, origin, technical specifications, and equipment status is required.

After submitting the dossier to the Department of Planning and Investment, the investor will track the process and receive the Investment Registration Certificate within 15-20 working days, as stipulated in Point b, Clause 1, Article 38 of the Investment Law 2020.

Step 2: The economic organization submits one set of the following documents to the Business Registration Office of the Department of Planning and Investment where the enterprise is headquartered:

• An application for enterprise registration, corresponding to the chosen enterprise type. Forms are available in the Appendices of Circular 01/2021/TT-BKHĐT of the Ministry of Planning and Investment.
• The company’s charter.
• A list of members.
• The issued Investment Registration Certificate.

Step 3: After receiving the dossier, the competent authority will review and issue the Enterprise Registration Certificate (ERC) to the economic organization.

Step 4: The company must then publish its information on the National Business Registration Portal, create a company seal, and open a direct investment capital account (DICA) to complete the establishment process.

The registration process for a foreign-invested organization is a strict sequence of legal procedures. Obtaining the Enterprise Registration Certificate is not the final step for an FDI lubricant business license in Vietnam.

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Procedure to Obtain the Business License for Import and Wholesale Distribution of Lubricating Oils and Greases

Completing the procedure for an FDI lubricant business license in Vietnam is the decisive step for a foreign-invested economic organization to legally import and wholesale distribute lubricating oils and greases in Vietnam.

Application Dossier

The dossier for a Business License is specified in Decision 233/QĐ-BCT dated January 18, 2018. The components include:

• An application for a Business License using Form No. 01 from the Appendix of Decree 09/2018/NĐ-CP, dated January 15, 2018.
• An explanatory statement following Clause 2, Article 12 of Decree 09/2018/NĐ-CP, detailing the financial plan, compliance capabilities, and specific activities of the organization.
• A document from the tax authority confirming no overdue tax debts.
• A copy of the Enterprise Registration Certificate.
• For cases with an investment project, a copy of the Investment Registration Certificate for the project related to goods trading and directly related activities.

Note: All foreign-language documents in the dossier must be translated into Vietnamese and consular legalized as required by Vietnamese law.

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Implementation Process

The process for granting the Business License is conducted according to Decision 233/QĐ-BCT:

• Step 1: Submit one set of the dossier to the Department of Industry and Trade (DOIT) where the organization’s head office is located.
• Step 2: Within 10 working days of receiving a complete and valid dossier, the DOIT reviews the application against the conditions. If the conditions are not met, the DOIT will issue a written rejection stating the reasons. If the conditions are met, the DOIT will forward the dossier with a request for opinion to the Ministry of Industry and Trade (MOIT).
• Step 3: The MOIT has 15 days from receiving the dossier to review the contents as per Article 10 of Decree 09/2018/NĐ-CP. The MOIT will then issue a written approval or a reasoned rejection.
• Step 4: Upon receiving the MOIT’s written approval, the DOIT has 03 working days to issue the Business License to the organization.

The entire process to obtain an FDI lubricant business license in Vietnam takes approximately 28 working days, excluding time for any dossier amendments.

Consulting and Authorization Services at Long Phan Consulting Company

Long Phan Consulting Company provides comprehensive consulting and authorization services for the entire process of obtaining an FDI lubricant business license in Vietnam. Our experience in foreign investment consulting ensures optimal and effective solutions. Our services include:

• Advising on meeting the conditions for the business license.
• Consulting on completing the business registration and license application dossiers.
• Providing A-Z guidance on the license application procedure.
• Drafting necessary application forms.
• Advising on tax obligations after enterprise establishment.
• Acting as an authorized representative to submit dossiers, communicate with authorities, monitor the process, and deliver the license.
• Providing support for any issues arising during the service.

With the motto “Entrust Faith – Receive Solutions,” Long Phan Consulting Company partners with you throughout your investment and business journey in Vietnam.

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Frequently Asked Questions about the FDI Lubricant Business License in Vietnam

What are the main criteria the Ministry of Industry and Trade (MOIT) uses for approval?

According to Article 10 of Decree 09/2018/NĐ-CP, the MOIT considers the enterprise’s compliance with specialized laws, its alignment with the strategic development goals of the trade sector, the competitiveness of domestic enterprises in the same field, its job creation potential, and its contribution to the state budget.

What is the total cost to complete this procedure?

The total cost includes state fees for issuing licenses and consulting service fees (if used). State fees are fixed and generally not high. However, consulting fees vary based on the complexity of the dossier and the scope of work undertaken by the law firm.

Can an existing FDI enterprise in another sector in Vietnam apply for this additional license?

Yes. An existing FDI enterprise can apply for an FDI lubricant business license in Vietnam. The enterprise must amend its Investment Registration Certificate (IRC) according to Article 36 of Decree 31/2021/NĐ-CP to add the new project objective. Afterward, it can submit the application for the Business License as outlined, provided it meets all regulatory conditions.

What content should the financial plan in the dossier include?

The financial plan must clearly present forecasts for revenue, operating costs, investment capital, projected cash flow, and the break-even point. The objective is to demonstrate the project’s feasibility and the enterprise’s financial capacity for sustainable operation.

Is it mandatory for the enterprise to have a warehouse at the time of application?

The law does not require ownership or usage rights of a warehouse at the time of submitting the Business License application. However, the investment project proposal must clearly outline the location and logistics plan, including warehousing. A warehouse lease contract or a memorandum of understanding is a crucial document to prove the project’s feasibility.

Conclusion

Obtaining an FDI lubricant business license in Vietnam is a multi-step legal procedure, from securing an Investment Registration Certificate (if applicable) and an Enterprise Registration Certificate to finally acquiring the Business License for the import and wholesale distribution of lubricating oils and greases. For detailed consultation and support in obtaining your business license, please contact our hotline at 1900 636389 for a free consultation and a detailed quote.