Investment conditions for foreign investors in the petroleum business sector
Currently, with the trend of integration and in line with Vietnam’s open mechanism, foreign investors have an increasing need to invest and do business in the gasoline field. However, this is a conditional business line for foreign investors. Foreign investors who want to operate in this field must first meet the conditions required by law. LSX Law Firm would like to advise investors on Investment conditions for foreign investors in the petroleum business sector.
Legal grounds
WTO, FTAs, ACIA;
Investment Law 2014;
Decree No. 23/2007/ND-CP dated February 12, 2007 Guiding the Commercial Law on goods purchase and sale activities and activities directly related to goods purchase and sale of foreign-invested enterprises in Viet Nam;
Circular No. 34/2013/TT-BCT dated December 24, 2013 announcing the roadmap for goods trading and activities directly related to goods purchase and sale of foreign-invested enterprises in Vietnam
Investment form
Investors conduct investment activities in one of the following forms:
- Investing in the establishment of economic organizations;
- Investment in the form of capital contribution, purchase of shares or capital contribution in economic organizations;
- Investment under business cooperation contract;
- Receiving transfer of investment projects or other cases of receiving investment projects;
- Amendment and supplementation of investment and business lines of foreign-invested economic organizations.
Investment conditions
Accordingly international treaties to which Vietnam is a signatory
Accordingly the provisions of international treaties to which Viet Nam is a member, foreign investors are not allowed to exercise the distribution rights to crude oil and processed oil.
Conditions as prescribed by Vietnamese law
For the petroleum business, foreign investors, when wishing to invest in this field in Vietnam, must comply with the following conditions:
Firstly, foreign-invested economic organizations may not exercise export rights to petroleum and oils obtained from bituminous minerals, in raw form; crude oil; condensate and others. In case a foreign investor is a petroleum contractor according to the provisions of the Petroleum Law, he is entitled to export the oil and gas portion under his/her ownership.
Secondly, soreign-invested economic organizations may not exercise the right to import oil derived from petroleum and oils obtained from bituminous minerals, except crude oil; preparations not elsewhere specified or included, containing by weight 70% or more of oils obtained from bituminous minerals, these oils being the basis of the preparation; waste oil.
Thirdly, foreign-invested economic organizations may not exercise the distribution rights to crude oil and processed oil, including: petroleum and oils obtained from bituminous minerals, in crude form; petroleum oils and oils obtained from bituminous minerals.
Lastly, foreign-invested economic organizations may produce petrol and oil with conditions consistent with the approved planning.
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