World Trade Organization (World Trade Organization) or WTO is an organization establish and operating since 1995 to establish a free global trade. Then, the WTO inherits and extends the principles of the General Agreement on Trade and Tariffs (GATT 1947). Three important documents upon Vietnam’s WTO accession include: Report of the Working Committee on the accession of Vietnam. Vietnam; Schedule of commitments on trade in goods; Schedule of commitments on trade in services. In which, the Schedule of Commitments on Trade in Services is an important document for foreign investors investing in Vietnam. LSX Lawfirm will give you an article about: “WTO Commitments Schedule foreigner need to know in Vietnam”, as follows:
Law on investment 2020
WTO Commitments Schedule means?
It is the result of negotiations between Vietnam and other WTO members in order to open the service market upon joining the WTO. Vietnam’s schedule of commitments upon joining the WTO consists of three parts: general commitments, specific commitments and a list of measures to exempt the most national treatment (MFN). Note that in addition to the Schedule of Commitments on Services; Vietnam also made a number of commitments to open the market in the Report of the Working Party on Vietnam’s accession to the WTO.
Then, simply put, in this document, the Government of Vietnam has conditions and commitments to open and restrict investment for specific groups of trade and service industries.
In addition, Investors need to have a certain understanding of the provisions of this WTO Commitments Schedule to know if the investment activities they want to invest in are subject to uncommitted; restricted or conditional investment. or has been opened in some other way.
WTO Commitments Schedule foreigner need to know in Vietnam
In the WTO Schedule of Commitments, normally trade-related industry groups such as wholesale, retail (without setting up retail establishments); information technology sector, consulting sector, construction sector and a number of other services. Other services are industries that have been fully opened; allowing foreign investors the right to establish economic organizations with 100% foreign investment capital. For activities in this group; the time and cost of setting up a company with 100% foreign capital is not too large.
Industry groups related to activities such as entertainment, advertising, telecommunications, medical examination and treatment, beauty spa, transportation, education, finance, legal advice, tax, accounting, etc. Industry groups have restrictions in opening to foreign investors; often accompanied by conditions related to the percentage of foreign investors’ capital (can be specified below 51% or less than 99%). Conditions related to investment capital; personnel and experience of foreign investors or approval of relevant ministries; sectors and localities are required.
Group of industries related to production activities, currently this group of industries has not been committed in the WTO schedule of commitments on trade and services. However, Vietnam is still open to foreign investors to make investment registration with these activities. When registering for investment; foreign investors need to rent land or factories in suitable industrial parks, or outside the industrial zones if approved by the locality.
In addition, there are groups of industries banned from business investment, foreign investors do not register their business such as: Publishing books, trading in items such as cigarettes, pipe tobacco, pharmaceutical, etc.
The service commitment schedule consists of 3 parts:
-List of Most Favored Nation (MFN) exemptions.
Transportation services, etc.
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