Navigating the dynamic landscape of Vietnam’s e-commerce sector requires a keen understanding of the country’s legal framework. As e-commerce continues to expand rapidly in Vietnam, businesses must stay informed about the relevant legal policies to ensure compliance and protect their operations. Key areas of focus include regulations on online transactions, data protection, consumer rights, and digital advertising standards. By getting a better grip on the Vietnamese e-commerce legal policies, companies can effectively manage risks and capitalize on the burgeoning opportunities in this vibrant market.
The Updated Regulations
Under new regulations, online sellers must provide clear and accurate information about their goods or services to help customers identify product characteristics and avoid misunderstandings before entering into a contract. This information must include mandatory label contents as per goods labeling laws, excluding specific details like manufacturing date, expiration date, and production number.
For goods and services requiring investment and business conditions, sellers must disclose the license or certificate of eligibility, including its number, date, and place of issuance, as stipulated by industry-specific business condition laws.
Foreign Entities and Cross-Border Activities
Decree 52/2013 mandates that foreign legal entities engaged in e-commerce in Vietnam must comply with the nation’s e-commerce laws, encompassing investment, the establishment of branches or representative offices, or maintaining websites with Vietnamese domain names. Decree 85/2021 extends these regulations, ensuring that all foreign organizations and individuals involved in e-commerce activities within Vietnam are subject to its provisions.
Decree 85/2021/ND-CP outlines various operational forms for e-commerce trading platforms in Vietnam. These include websites that allow participants to open booths for displaying goods or services, websites enabling account creation for contract execution with customers, websites featuring sections for buying and selling goods or services, and social networks facilitating such activities, where participants may directly or indirectly pay fees.
Entities Subject to Registration
Decree 85/2021 introduces a new definition for e-commerce services and specifies that providers of these services do not include traders or entities solely offering website design services. It further clarifies that these excluded entities do not directly engage in the business, operation, or coordination of activities on such websites. This decree aims to outline the scope of e-commerce service providers more clearly, ensuring a better understanding of their roles and responsibilities within the digital marketplace.
The Bigger Picture
Decree 85/2021 has broadened the scope of entities involved in e-commerce activities in Vietnam. While Decree 52/2013 primarily addressed infrastructure providers, the new decree now encompasses a wider range of participants. This includes not only traders but also entities offering technical infrastructure, logistics, and other supportive services essential to e-commerce operations. The definition of these support services, however, remains unspecified and requires further clarification.
Moreover, Decree 85/2021 extends its regulatory reach to foreign entities engaged in e-commerce within Vietnam. Such entities are now subject to the decree if they meet certain criteria: operating an e-commerce website under Vietnamese domain names, displaying content in Vietnamese, or conducting transactions originating from Vietnam annually. Determining the transaction volume can be based on reports from the entities themselves, official data from state authorities (such as customs, tax, internet management, and banking), or public reports verified by relevant state authorities. Additionally, foreign entities selling goods on Vietnamese e-commerce platforms fall under this expanded regulatory framework.
Regulating Operations Conducted by Foreign Entities
Operating e-commerce websites in Vietnam as a foreign entity requires registration of their activities and a representative office or appointing an authorized representative within the country. This is a change from the Decree 52/2013 prior to this, which did not demand a physical presence. Compliance with these regulations is mandatory by the end of 2022. Additionally, foreign sellers on Vietnamese e-commerce platforms may need to appoint a commercial agent in Vietnam, and platform owners are required to verify the identities of these foreign sellers.
Rules Essential for Access
Decree 85/2021 outlines conditions for foreign investors in Vietnam’s e-commerce sector. Foreign investors must establish a new company or invest in an existing one in Vietnam to engage in e-commerce services. Other forms of investment, like contracts or projects, without a physical presence in Vietnam are not allowed. Additionally, if a foreign investor seeks to control one of Vietnam’s top five e-commerce enterprises, as designated by the Ministry of Industry and Trade, they must undergo a national security evaluation by the Ministry of Public Security. This evaluation isn’t required if the enterprise being acquired is a startup or a small to medium-sized business.
The criteria for control include owning more than 50% of the enterprise’s capital or voting shares, having authority to appoint or remove key management, and influencing significant business decisions such as technology platforms, business operations, and financial strategies. This regulatory framework aims to manage foreign participation in Vietnam’s e-commerce sector, ensuring compliance with national security protocols and fostering structured investment practices in the country.
Consumer Protection Law
Vietnam’s Consumer Protection Law (CPL) 2023 marks a significant expansion in regulatory scope, now encompassing offshore entities alongside domestic ones. The concept of online or electronic purchases (called “remote transaction”) where consumers cannot physically inspect goods beforehand. Businesses engaging in remote transactions must provide comprehensive and accurate information to consumers, ensuring clarity on rights and complaint procedures.
Moreover, the CPL 2023 introduces new regulations covering those operating self-established or intermediary digital platforms. Responsibilities vary based on the nature of the platform, with intermediary platforms required to store transaction information, provide access to transaction documents, and manage content censorship. Large digital platforms face additional obligations, including monitoring advertisements and addressing issues under forthcoming government guidelines. These updates reflect Vietnam’s proactive stance in adapting consumer protection laws to the digital age, aiming to safeguard consumer rights across diverse online transactions.
E-Transactions Law
The Law on E-Transactions 2023 focuses on regulating digital platforms facilitating e-transactions in Vietnam. Administrators of these systems, such as those managing e-commerce platforms, must comply with laws on network security, cybersecurity, personal data protection, and other relevant regulations. Large and extremely large intermediary digital platforms have specific responsibilities, such as the fact that large platforms must disclose their methods for handling legal violations within transactions and report incidents annually to the Ministry of Information and Communications, while extremely large platforms must disclose the basis for user recommendations and allow users to uninstall any pre-install applications without affecting system functionality.
In addition to these requirements, a forthcoming government decree will further outline the obligations of administrators of large and extremely large intermediary digital platforms, taking into account factors like user base and operational scale in Vietnam. The decree aims to clarify and enhance compliance with the Law on E-Transactions 2023, ensuring these platforms operate securely and responsibly within the Vietnamese digital landscape.
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"Foreign traders and organizations setting up websites for provision of e-commerce services in Vietnam” comply e-commerce regulations under Decree 85/2021?
Foreign traders or organizations setting up websites for provision of e-commerce services in Vietnam need to comply regulations under Decree 85/2021 in case they have an e-commerce website which operate under Vietnamese domain names, or display content in Vietnamese, or conduct over 100,000 transactions originating from Vietnam annually. Compliance of foreign traders and organizations includes registering activities, establishing a representative office or appointing an authorized representative, and adhering to local regulatory frameworks.
What are the key obligations for digital platforms under Vietnam's Consumer Protection Law (CPL) 2023?
Under CPL 2023, digital platforms must ensure transparency in transactions by providing comprehensive product information and clarity on consumer rights and complaint procedures. Intermediary platforms are required to store transaction data, provide access to transaction documents, and manage content censorship. Larger platforms face additional responsibilities, including monitoring advertisements and complying with forthcoming government guidelines on consumer protection.
