FOREIGN INVESTMENT IN RETAIL AND WHOLESALE TRADING OF LUBRICATING OILS IN VIETNAM

Dear Sir/Madam,

Thank you for your interest in DB Legal’s services. With regard to the legal regulations and investment registration procedures applicable to the retail and wholesale trading of lubricating oils in Vietnam, DB Legal provides the following response:

I. Legal Basis:

- Law on Investment No. 61/2020/QH14 dated 17 June 2020;

- Law No. 03/2022/QH15 dated 11 January 2022 Amending and Supplementing a Number of Articles of the Law on Public Investment, Law on Investment in the Form of Public-Private Partnership, Law on Investment, Housing Law, Bidding Law, Electricity Law, Law on Enterprises, Law on Excise Tax, and Law on Enforcement of Civil Judgments;

- Law No. 57/2024/QH15 dated 29 November 2024 amending and supplementing a number of articles of the Law on Planning, the Law on Investment, the Law on Investment in the form of Public–Private Partnership, and the Law on Bidding;

- Law No. 90/2025/QH15 dated 25 June 2025 amending and supplementing a number of articles of the Law on Bidding, the Law on Investment in the form of Public–Private Partnership, the Law on Customs, the Law on Value Added Tax, the Law on Export and Import Duties, the Law on Investment, the Law on Public Investment, and the Law on Management and Use of Public Property;

- Decree No. 31/2021/ND-CP dated 26 March 2021 detailing and guiding the implementation of a number of articles of the Law on Investment;

- Decree No. 239/2025/ND-CP dated 3 September 2025 amending and supplementing a number of articles of Decree No. 31/2021/ND-CP dated 26 March 2021 of the Government detailing and guiding the implementation of a number of articles of the Law on Investment;

- Circular No. 34/2013/TT-BCT dated 24 December 2013 of the Ministry of Industry and Trade on the announcement of the roadmap for implementation of trading activities and activities directly related to the trading of goods by foreign-invested enterprises in Vietnam.

II. Market Access Restrictions on the Retail and Wholesale Trading of Lubricating Oils:

Section 4, Part II of Vietnam’s Schedule of Specific Commitments on Services under the World Trade Organization (WTO), with respect to distribution services, provides that: “Cigarettes and cigars; books, newspapers and magazines; video records on whatever medium, precious metals and stones; pharmaceutical products and drugs; explosives; processed oil and crude oil, rice, cane and beet sugar are excluded from the commitments.”

Based on the above provision, it can be clearly determined that distribution activities, including wholesale and retail trading of lubricating oils and lubricants—which fall within the category of refined petroleum products—are expressly excluded from Vietnam’s market access commitments under the WTO framework. Such exclusion from the Schedule of Commitments means that Vietnam has not undertaken any commitment to allow foreign investors to access the market in this sector, including the right to establish distribution facilities, the right to conduct wholesale trading, or the right to conduct retail trading.

Accordingly, with respect to the distribution of lubricating oils and lubricants, Vietnam is under no obligation to open its market to foreign investors and retains full discretion to enact, maintain, and enforce restrictive or prohibitive measures in accordance with its domestic laws. The only obligations applicable to Vietnam in this regard are the general obligations under the General Agreement on Trade in Services (GATS), including, but not limited to, the principles of transparency, most-favoured-nation treatment, and other general disciplines stipulated under the GATS.

Therefore, any intention by foreign investors to engage in the wholesale or retail trading of lubricating oils and lubricants in Vietnam cannot be assessed on the basis of WTO market access commitments, but must be evaluated entirely in accordance with the prevailing provisions of Vietnamese law and the State’s sector-specific regulatory policies.

III. Vietnamese Legal Regulations on the Retail and Wholesale Trading of Lubricating Oils by Foreign Investors:

Pursuant to Appendix No. 03 promulgated together with Circular No. 34/2013/TT-BCT of the Ministry of Industry and Trade, which sets out the list of goods for which foreign-invested enterprises are not permitted to exercise distribution rights, crude oil and refined petroleum products are included within this restricted category. Specifically, the list covers petroleum and oils obtained from bituminous minerals in their crude form, as well as oils of petroleum or oils obtained from bituminous minerals, including refined petroleum products.

On that basis, lubricating oils and lubricants—which are petroleum-derived products and fall within the category of refined petroleum products—are considered goods for which distribution rights are not permitted to be exercised by foreign-invested enterprises under the aforementioned regulations.

Accordingly, under the current provisions of Vietnamese law, foreign investors are not permitted to exercise distribution rights in respect of lubricating oils and lubricants, including both wholesale and retail trading activities of such products in the Vietnamese market.

IV. Forms of Investment in Vietnam:

1. Investment in establishing an economic organization:

a) Regulations on investment in establishing an economic organization

According to Article 22 of the Law on Investment, investors establish economic organizations according to the following provisions:

- A domestic investor shall establish a business organization in accordance with regulations of law on enterprises and law corresponding to each type of business organization;

- A foreign investor that establishes a business organization shall satisfy market access conditions applied to foreign investors specified in Article 9 of the Law on Investment 2020;

- Before establishing a business organization, the foreign investor must have an investment project and follow the procedures for issuance or adjustment of an investment registration certificate, except for establishment of a small and medium-sized start-up enterprise and a startup investment fund in accordance with regulations of the Law on Small and Medium-sized Enterprises;

- Foreign investors are permitted to establish economic organizations to implement investment projects before carrying out the procedures for issuance or amendment of the Investment Registration Certificate in respect of newly established investment projects involving innovation centers, research and development centers, investment projects for the construction of infrastructure for large data centers, cloud computing infrastructure, mobile infrastructure from 5G and above, and other digital infrastructure in the field of strategic technologies as decided by the Prime Minister, as well as investment projects in the field of strategic technologies and production of strategic technology products as decided by the Prime Minister.

b) Dossier for requesting the issuance of an Investment Registration Certificate

- A written request for implementation of the investment project, including an undertaking to bear all costs and risks in case the project is not approved;

- Documents on the legal status of the investor;

- Documents evidencing the investor’s financial capacity, comprising at least one of the following: investor’s financial statements for the 02 most recent years; commitment of financial support from the parent company; commitment of financial support from a financial institution; guarantee of the investor’s financial capacity; or other documents evidencing the investor’s financial capacity;

- The investment project proposal comprising the following principal contents: the investor or the form of investor selection, investment objectives, investment scale, investment capital and capital mobilization plan, location, term, implementation progress, information on the current status of land use at the project implementation site and the proposed land use demand (if any), labor demand, proposed investment incentives, the project’s socio-economic impacts and efficiency, preliminary environmental impact assessment (if any) in accordance with the law on environmental protection; and any special mechanisms and policies (if any).

Where the law on construction prescribes the preparation of a pre-feasibility study report, the investor may submit the pre-feasibility study report in lieu of the investment project proposal;

- In cases where the investment project does not request the State to allocate land, lease land, or permit land use change, a copy of documents on land use rights or other documents determining the right to use the location for implementation of the investment project shall be submitted;

- Explanatory contents on the technology used in the investment project for projects subject to appraisal and consultation on technology in accordance with the law on technology transfer;

- Other documents related to the investment project and requirements on the investor’s conditions and capacity as prescribed by law (if any).

c) Conduct of investment activities by foreign-invested business organizations

When establishing a new business organization, making investment by contributing capital, purchasing shares, or purchasing capital contributions portion in economic organizations, or making investment under a BCC contract, a business organization must satisfy the same conditions and follow the same investment procedures as foreign investors if:

- Over 50% of its charter capital is held by a foreign investor(s) or, in case of a partnership, the majority of its general partners are foreigners;

- Over 50% of its charter capital is held by a business organization(s) mentioned in Point a of this Clause;

- Over 50% of its charter capital is held by a foreign investor(s) and a business organization(s) mentioned in Point a of this Clause

Business organizations other than those mentioned in Points a, b and c Clause 1 of this Article shall satisfy conditions and follow investment procedures applied to domestic investors when establishing a business organization, when making investment by contributing capital, purchasing shares, or purchasing capital contributions portion in economic organizations or when making investment under a BCC contract.

If a foreign-invested business organization that is established in Vietnam has a new investment project, procedures for executing such investment project shall be followed without having to establish a new business organization.

2. Investment in the form of capital contribution, share purchase, capital contribution portion purchase:

a) Conditions for capital contribution, share purchase, capital contribution portion purchase

Pursuant to Clause 2, Article 24 of the Law on Investment 2020, foreign investors contributing capital, purchasing shares, or purchasing capital contributions portion in economic organizations must satisfy the following condition:

- Satisfy market access conditions applied to foreign investors as prescribed in Article 9 of the Law on Investment 2020;

- Ensure national defense and security in accordance with this Law;

- Comply with regulations of the law on land and conditions for receipt of land use rights and conditions for use of land on islands or border or coastal communes.

b) Form of capital contribution, share purchase, capital contribution portion purchase

•  A foreign investor may contribute capital to a business organization in the following forms:

- Purchase of shares of joint-stock companies through the initial public or additional issuance;

- Contribution of capital to limited liability companies and partnerships;

- Contribution of capital to other business organizations not mentioned in Point a and Point b of this Clause.

•  A foreign investor purchase shares, purchase capital contribution portions of economic organizations in the following forms:

- Purchasing shares of joint-stock companies from companies or shareholders;

- Purchasing capital contribution portions of members of limited liability companies to become members of limited liability companies;

- Purchasing capital contribution portions of contributing members in partnerships to become contributing members of partnerships;

- Purchasing capital contribution portions of members of other economic organizations not falling under the cases specified in points a, b and c of this clause

c) Procedure of capital contribution, share purchase, capital contribution portion purchase

- Investors contributing capital, purchasing shares, purchasing capital contribution portions of economic organizations must meet the conditions and carry out procedures for changing members, shareholders as prescribed by law corresponding to each type of economic organization.

- Foreign investors carry out procedures for registering capital contributions, share purchases, capital contribution portion purchases of economic organizations before changing members, shareholders if they fall into one of the following cases:

+ The capital contribution, share purchase, share portion purchase increases the ownership ratio of foreign investors in economic organizations doing business in sectors with conditional market access for foreign investors;

+ The capital contribution, share purchase, share portion purchase leads to foreign investors, economic organizations specified in points a, b and c of clause 1 of Article 23 of this Law holding more than 50% of the charter capital of the economic organization in the following cases: increasing the ownership ratio of foreign investors from less than or equal to 50% to over 50%; increasing the ownership ratio of foreign investors when foreign investors already own over 50% of the charter capital in the economic organization;

+ Foreign investors contribute capital, purchase shares, purchase capital contribution portions of economic organizations that have land use right certificates on islands and communes, wards, border towns; communes, wards, coastal towns; other areas affecting national defense and security.

d) Dossier for registering capital contribution, share purchase, capital contribution portion purchase

- Document registering capital contribution, share purchase, capital contribution portion purchase;

- Copies of legal documents of individuals, organizations contributing capital, purchasing shares, purchasing capital contribution portions and economic organizations with foreign investors contributing capital, purchasing shares, purchasing capital contribution portions;

- Document on the principles of agreement on capital contribution, share purchase, share portion purchase between foreign investors and economic organizations with foreign investors contributing capital, purchasing shares, purchasing share portion purchase or between foreign investors and shareholders or members of that economic organization;

- A copy of the Land Use Rights Certificate of the economic organization in which the foreign investor contributes capital, acquires shares, or acquires capital contributions (in cases where such economic organization holds a Land Use Rights Certificate for land located on islands; in border communes, wards, or townships; and in coastal communes, wards, or townships; or in other areas affecting national defense and security, except for economic organizations implementing investment projects in industrial zones, export processing zones, high-tech zones, or economic zones established in accordance with Government regulations).

Accordingly, based on the current provisions of Vietnamese law as well as the relevant market access commitments, it can be affirmed that Vietnam has not undertaken any commitment to open the market for the distribution of lubricating oils and lubricants to foreign investors. At the same time, the prevailing laws of Vietnam do not permit foreign investors to exercise distribution rights, including wholesale and retail trading, in respect of these products in Vietnam.

As DB Legal has not yet had access to full and detailed information regarding the specific investment project, the above analysis and advice are of a general and basic nature only. DB Legal hopes that this article provides useful reference information for foreign investors in the process of considering and evaluating investment opportunities in Vietnam.