Article 11a of the draft amendment to Decree 24/2012 on gold business management says enterprises applying for a gold bar production license must hold a gold trading license and have charter capital of at least VND1 trillion. For credit institutions, in addition to a trading license, minimum charter capital of VND50,000 billion is required.

In feedback to the State Bank of Vietnam (SBV) which is drafting the decree, Vietnam Chamber of Commerce and Investment (VCCI) argued that requiring enterprises producing gold bars to also hold a gold trading license is unreasonable, as these are distinct activities. 

Production is the initial stage of the supply chain, while trading occurs during distribution. “Combining both licenses into one requirement creates a ‘license within a license’ issue, increasing compliance costs and administrative processing time for businesses,” VCCI’s document stated.

Regarding the charter capital requirement, VCCI said it cannot understand why the VND1 trillion threshold was set. Enterprises have also complained that the tentative requirement is too strict and the required capital is too high, which could be a barrier to enterprises’ activities.

This could lead to a situation where only a few businesses can participate in the gold market, thus reducing competition, diversity in supply, and ultimately affecting consumers’ rights and choices. VCCI urged regulators to reconsider these conditions.

In contrast, Nguyen Huu Huan from the University of Economics HCM City told VietNamNet that producing gold bars requires substantial capital and credibility. He disagrees with the view that the proposed required charter capital for enterprises and credit institutions is too high. 

Huan noted that before 2012, numerous entities produced gold bars, leading to widespread issues with low-quality and substandard gold, harming investors. This was one of the reasons for SBV to appoint SJC as the only entity permitted to produce gold bars.

“Gold bar trading must be the game for big players. High capital is justified to ensure liquidity, as sellers must be responsible for buying back gold bars,” Huan said.

Lawyer Nguyen Thanh Ha, Chair of SBLaw, also supported the draft, stating that gold trading is a capital-intensive sector heavily influenced by global market fluctuations. Thus, the proposed charter capital of VND1,000 billion for enterprises and VND50,000 billion for credit institutions is appropriate.

Proposal to eliminate gold import-export licenses

Article 14 of the draft says that the gold bar import must be put under multiple-layer control, including an import-export license, annual import-export quotas, and per-transaction licenses. 

VCCI argued that these requirements will create numerous “sub-licenses,” increasing administrative procedures, compliance costs, and challenges for enterprises’ production and business. VCCI proposed simplifying procedures while maintaining regulatory oversight, specifically by abolishing the import-export license and per-transaction licenses.

VCCI reasoned that import licenses are only granted to gold-producing enterprises, while gold production companies are licensed and tightly controlled by State Bank of Vietnam. 

Requiring an additional import-export license is unnecessary and adds to procedural and cost burdens. Furthermore, requiring per-transaction licenses while imposing annual quotas is illogical. In a fluctuating gold market influenced by domestic and international factors, waiting for per-transaction approvals could cause businesses to miss opportunities and reduce operational flexibility, VCCI argued.

The per-transaction licensing requirement may be intended to provide regulators with data on import-export activities for proactive management. VCCI suggested alternatives, such as requiring customs agencies to share data with the State Bank or mandating periodic reports from enterprises on their import-export quota usage.

Additionally, VCCI called for clarification on the requirement that enterprises only import gold bars or raw gold from producers certified by the London Bullion Market Association. VCCI views this as a trade restriction that narrows import markets, limits supplier choices, and could increase import costs, ultimately affecting product prices and business competitiveness.

The Gold Business Association has opposed the tentative regulation on the required charter capital of enterprises and credit institutions that want to import gold.

According to the association, very few enterprises, only one to three gold trading and production companies, can meet the charter capital requirement of VND1,000 billion or more. This regulation would result in a limited number of enterprises participating in gold bar production, potentially enabling the state to maintain a monopoly on gold bar production and supply, thus restricting the supply of gold bars.

“A charter capital requirement of VND500 billion or more for enterprises is appropriate,” the association suggested.

Tuan Nguyen