Overview of Decree 85/2021 regarding e-commerce on social networks
Effective from January 1, 2022, Decree 85/2021 provides significant amendments impacting foreign investors in Vietnam’s e-commerce sector, particularly in areas involving social networks that facilitate transactions between businesses and consumers. Below, we summarize key provisions affecting e-commerce operations via social networks
Social network as e-commerce trading platform
Under Decree 85/2021, a social network is classified as an e-commerce trading platform if it meets the following criteria:
- Platform Activities:The network allows users to (i) open online shops to display or introduce goods/services, (ii) open accounts to contract with customers, or (iii) host shopping sections where users post sales information.
- Payment of Fees:Users on the platform, directly or indirectly, pay fees to engage in the activities above.
Responsibilities of E-commerce Trading Platform Providers
Registration for e-commerce trading platform. To provide e-commerce services in Vietnam, foreign entities must register with the Ministry of Industry and Trade. Without its commercial presence in Vietnam, these entities must establish a representative office or appoint an authorized representative in the country.
E-commerce trading platform obligations. Decree 85/2021 outlines critical responsibilities for e-commerce platforms, including:
- Regulatory Contact Point:Designate a contact to receive and respond to regulatory information requests about legal violations, with a 24-hour response time.
- Representation of Foreign Sellers:Represent foreign sellers on the platform in consumer complaint resolution and notify tax obligations for these sellers.
- Consumer Complaint Handling:Act as a point of contact for consumer complaints in transactions involving multiple parties.
- Order Record Retention:Retain records of orders as required by the Law on Accounting.
- Liability for Damages:Jointly compensate for damages arising from failure to address legal violations on the platform.
Market access conditions for foreign investors in e-commerce trading platform
For foreign investors aiming to establish a commercial presence, Decree 85/2021 imposes two conditions
- Investment Forms:Foreign investors may only invest through a new or existing company in Vietnam, with other structures (e.g., business cooperation contracts) not permitted; and
- National Security Appraisal:If the foreign investor holds control over one or more of the top five e-commerce companies in Vietnam (as identified by the Ministry of Industry and Trade), an appraisal by the Ministry of Public Security is required.
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Please do not hesitate to contact Dr. Oliver Massmann at [email protected] if you have any questions. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.
