In addition to many industries that foreign investors often choose to invest in and do business in Vietnam, such as advertising, management consulting, restaurants, and computers, the energy and mineral industries are also considered industries that investors are interested in. These are special industries because of their regulations of specialized laws and policies from the Government that create the conditions for foreign investors to operate in Vietnam's mineral industry. In this article, we will share the industry codes related to mineral activities that recently received attention from foreign enterprises.
- Mining minerals industry
The current mineral exploitation industry is arranged according to code CPC 883. Accordingly, this industry can still be invested in if an FDI enterprise has mineral exploration and exploitation activities. However, this is a conditional market access industry for foreign investors based on the provisions of Decree 31/2021/ND-CP. According to this regulation, foreign-invested enterprises must successfully meet the conditions specified in Clause 2, Article 53 of the Mineral Law 2010, to be granted a mineral exploitation license. This includes:
- Having an investment project to mine minerals in the explored area with approved mineral deposits in conformity with the master plans (according to the provisions of the law on planning). Such a project must contain a plan of employment of professional human resources; advanced and appropriate equipment, technologies and mining methods; for toxic minerals, the Prime Minister's written permission is also required;
- Having an environmental impact assessment report or an environmental protection commitment made under the environmental protection law;
- Having an equity capital at least equal to 30% of the total investment capital of the mining investment project.
- Export and purchasing of minerals industry
The industry's export and purchasing of minerals is arranged according to code CPC 6227. In circumstances where FDI enterprises only purchase raw minerals from mineral exploitation units for export, this industry has no restrictions on the participation of foreign investors according to the WTO Schedule of Commitments. However, to trade minerals, businesses must meet the conditions in Article 14 of Decree 17/2020/ND-CP. The exported minerals must meet the standards, quality, and desired type of mineral that the Ministry of Industry and Trade prescribes.
In addition, the minerals must have a legal origin, whereby the minerals must have an origin in one of the following cases: (i) Mining or salvage mining from mines, mine sites, and waste dumps within the validity period of the Mining License or License for Salvage Mining issued by a competent state agency; (ii) Minerals are imported according to the Import Goods Declaration certified by the Border checkpoint customs; (iii) Confiscated and distributed by Competent state agencies. (iv) For exported minerals, in addition to meeting specific regulations, they must also be on the list of types of minerals and meet the standards and quality prescribed by the Ministry of Industry and Trade. For exported minerals containing thorium or uranium equal to or greater than 0.05% by weight, there must be a license from the Ministry of Science and Technology to export these radioactive materials according to the provisions of the Atomic Energy Law. (v) In cases where imported minerals are still in inventory because they are not consumed domestically and want to be re-exported, or minerals need to be shipped abroad for analysis, research, testing of processing technology and other special cases.
- Manufacturing and trading of semiconductors and processing chips (CPC 6228, 884, 885)
According to the WTO Schedule of Commitments, this industry has no restrictions for foreign investors. In addition, electronic accessories and components production is an industry with investment incentives according to the Investment Law 2020. Therefore, investors are completely allowed to carry out the above-mentioned business activities in Vietnam. However, in the case of production, before choosing a location for an investment project that is also the headquarters of operations, investors need to check the specific regulations of that area to determine whether that location is allowed to operate in manufacturing industries. This comes from environmental law requirements for industries whose activities will affect the surrounding living environment.
After determining the industry that is expected to operate in Vietnam, the next step that the investor needs to take is to determine the type of company that is to be established, number of members/shareholders, charter capital level, total investment capital, investment project term, legal representative, person in charge of accounting, as well as many other variables that are related to foreign company operations in Vietnam. Determining accurate and complete initial information will help foreign investors anticipate the advantages and disadvantages of doing business in Vietnam and estimate the time and costs incurred to complete legal procedures as competent authorities require.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
