Overview of Decree 116 on Conditions for conducting automobile manufacturing, assembly, and import; and providing automotive warranty and maintenance

On October 17th, 2017, the Government issued Decree 116/2017/ND-CP (“Decree 116”) specifying conditions for conducting automobile manufacturing, assembly, and import; and providing automotive warranty and maintenance services. This decree came into effect on the issuance date.

Notable regulations of Decree 116 are those providing conditions and procedures for obtaining 3 types of new business licenses issued by the Ministry of Industry and Trade, (“MOIT”) namely: (1) a Certificate of satisfaction of conditions for automotive manufacturing and assembly, (2) a Business License for automobile import, and (3) a Certificate of automotive warranty and maintenance workshop. The conditions for applying for these certificates and business license are as follows:

(1)Certificate of satisfaction of conditions for automotive manufacturing and assembly:

An enterprise must meet the following conditions[1]:

(a)       Have the lawful right to use a manufacturing factory, automobile assembling line, soldering line, painting line, quality inspection line, and automobile testing road;

(b)       Have an automotive warranty and maintenance workshop, which is owned or contractually leased by the enterprise or by an authorized agent;

(c)       Have qualified technicians, each of whom must hold at least a relevant bachelor’s degree and 5 years of experience; and

(d)       Have a sufficient number of staff, an occupational safety and health plan, a fire prevention and fighting plan, and an environmental protection dossier.

(2)Business license for automobile import

An enterprise must meet the following conditions[2]:

(a)       Have an automotive warranty and maintenance workshop, which is owned or contractually leased, by the enterprise or by an authorized agent of the enterprise; and

(b)       Have obtained a written confirmation proving that the enterprise is authorized by the automobile manufacturer to summon, on behalf of the manufacturer, those imported automobiles in Vietnam.

(3)Certificate of automotive warranty and maintenance workshop

An enterprise must meet the following conditions[3] :

(a)        Have the lawful right to use the land on which the workshop is built;

(b)       Satisfying conditions stipulated in the new National Standard TCVN 11794(“TCVN 11794”), setting out standards for automotive maintenance and repair workshops, including: (1) the area of the workshop must appropriately fit the purpose of implementing repairing and maintenance services; (2) have areas for tasks, including receiving incoming automobiles, returning repaired automobiles, maintaining and repairing, and inspection before returning; and for operating office and components and accessories warehouse, and automobile-washing; (3) have sufficient equipment and tools for performing automotive repair and maintenance services; (4) have diagnostic devices, which are suitable for automobile repair or maintenance, to check the engines and status of technical functions (if the automobile has any electronic control unit), and software installed in the diagnostic devices must be used in compliance with the law on intellectual property; and (5) have qualified technical staff and a quality management system to ensure the quality of automotive repair and maintenance services;

(c)       Have obtained a commitment of the manufacturer of the automobile to provide technical support, and components for the rendering of automotive repair and maintenance services; and

(d)       Have a sufficient number of staff, an occupational safety and health plan, a fire prevention and fighting plan, and an environmental protection dossier.

[1] Article 7 and the Annex 1 of Decree 116

[2] Article 15 of Decree 116

[3] Article 21 of Decree 116

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