"Enterprises are free to do business in any business areas that are not prohibited by law" is one of the rights of the enterprises recognized in the applicable Law on Enterprise. What are the prohibited business areas which the foreign investors should be aware of when they make plan to invest in Vietnam? 

1. PROHIBITED BUSSINESS AREAS 

According to Article 6 of the applicable Law on Investment, there are 8 prohibited business areas, including: 

• Trade in the narcotic substances 

The prohibited narcotic substances are specified in Appendix I of the Law on Investment 2020, including 47 types, which can be followed by typical narcotics substances: Cetorphine, Acetyl-alpha- methylfenany, Alphacetylmethadol, Alpha-methylfentanyl, Beta-hydroxyfentanyl, Brolamphetamine, Cannabis and cannabis preparations, Heroine, opium and opium preparations… 

• Trade in the chemicals and minerals 

According to Appendix II of the Law on Investment 2020, there are 18 types of chemicals and minerals prohibited from investment and business, including some typical substances: burning gases containing sulfur, tear gas; Dodecyl benzene sulfonic acid 

• Trade in specimens of wild flora and fauna 

Prohibited business specimens of wild plants and animals are specified in Appendix 1 of the International Convention on endangered species of wild plants and animals divided into the vertebrate industry, including mammal, bird, reptile, amphibian, cartilage, fish, barramundi and echinoderm, arthropod, molluscs, and zygote. 

Specimens of endangered and rare wild animals and plants of Group I originate from nature, banned from business and investment are specified in Appendix III of the 2014 Investment Law. magnolia, pine industry. Animals include mammals, reptiles, birds ... 

• Prostitution 
• Human trafficking; trade in human tissues and body parts 
• Business activities pertaining to asexual human reproduction 
• Trade in firecrackers 
• Provision of debt collection services. 

Accordingly, organizations and individuals are not allowed to conduct business investment activities in the industries and trades mentioned above. 

2. LEGAL CONSEQUENCES OF DOING BUSINESS IN A PROHIBITED BUSINESS AREA 

According to the provisions of the Law on Enterprise 2020, one of the conditions to grant an enterprise registration certificate to an organization or individual is that the enterprise’s business area is not prohibited. When registering the business areas which are prohibited under the laws of Vietnam, organizations and individuals will not be eligible to be granted an enterprise registration certificate. 

In addition, doing business in a prohibited business area, if detected, may be subject to criminal prosecution for the prostitution business; illegally dealing in narcotics, trading in firecrackers, trading in human tissues, tissues and organs. The highest aggravation frame can go up to life in prison. 

3. REGULATION ON PRODUCTION AND USE OF NARCOTIC SUBSTANCES, CHEMICALS, MINERALS, SPECIMENS OF PLANT AND WILD ANIMALS IN ANALYSIS, TESTING, SCIENTIFIC RESEARCH, MEDICINE, PRODUCTION PHAMACEUTICAL PRODUCTS, CRIMINAL INVESTIGATION, SERCURITY PROTECTION 

Production and use of narcotic substances, chemicals, minerals, specimens of plants and wild animals in analysis, testing, scientific research, medicine, production pharmaceutical products, criminal investigation, security protection are performed as follows: 

• The narcotic substances specified in Appendix 1 of the Law on Investment are permitted to be produced and used by competent state agencies in accordance with the Government's regulations on the list of narcotic substances and precursors and the Convention on combating drugs in 1961, United Nations Convention of 1988 on combating illegal trafficking in narcotics and psychotropic substances 
• The chemicals and minerals specified in Appendix 2 of the Law on Investment are permitted to be produced and used by competent state agencies in accordance with the Government's regulations on management of chemicals subject to the Convention. prohibiting the development, production, possession, use and destruction of chemical weapons and guiding documents of the Rotterdam Convention on prior informed agreement procedure for certain hazardous chemicals and real protective drugs items in international trade 
• Species of wild flora and fauna specified in Appendix 3 of the Law on Investment to be exploited by competent authorities in accordance with the Government's regulations on management of forest plants and animals. Endangered, precious and rare forests and Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). 

Source from: Hung, L.(2021). Business Areas Prohibited Under the Laws of Vietnam?. Retrieved from: lexology, Asia Legal(June 23, 2021). https://www.lexology.com/library/detail.aspx?g=8e6f4e82-6557-4e68-9fa0-002468157b19