VI In a market economy, economic concentration is an activity that is gradually becoming popular among businesses to create new businesses with a larger scale than before or to increase the economic potential of businesses. Present. However, this act of economic concentration is likely to form an enterprise with a dominant position or monopoly position in the relevant market. And this will have an impact or is likely to have a significant anti-competitive impact if the enterprise carrying out economic concentration abuses this dominant or monopoly position and carries out acts that influence bad for the market. Therefore, economic concentration acts are strictly controlled by the provisions of Vietnam Competition Law through notification to State Management Agencies. In this article, Pham Consult will share with you specific businesses about this procedure so that you can further consider the status of your business before implementing economic concentration.
Related legal documents:
• Competition Law 2018;
• Decree 35/2020/ND-CP
1. What is economic concentration?
Vietnam’s Competition Law does not have a regulation to define exactly what is considered an act of economic concentration, however, lawmakers have listed the following forms of economic concentration: According to the provisions of Article 29 of the Competition Law 2018:
a. Merging businesses;
b. Business consolidation;
c. Business acquisition;
d. Joint venture between businesses;
e. Other forms as prescribed by law.
2. Cases of economic concentration are carried out:
According to the provisions of Clause 2, Article 14 of Decree 35/2020/ND-C; Economic concentration is carried out in one of the following cases:
(1) The combined market share of the enterprises intending to participate in the economic concentration is less than 20% in the relevant market;
(2) The combined market share of enterprises intending to participate in economic concentration is 20% or more in the relevant market and the total square of market share of enterprises after economic concentration in the relevant market lower than 1,800;
(3) The combined market share of enterprises participating in economic concentration is 20% or more in the relevant market, equal to the square of the market share of enterprises after economic concentration in the relevant market above. 1,800 and the amplitude of increase in the sum of squared market shares of businesses in the relevant market before and after economic concentration is lower than 100;
(4) Enterprises participating in economic concentration have relationships with each other in the production, distribution, and supply chain for a certain type of goods or service or the business lines of the participating enterprises. Economic concentrations that are inputs to each other or complement each other have a market share of less than 20% in each related market.
3. Cases requiring notification of economic concentration:
Pursuant to Clause 1, Article 33 of the Competition Law 2018, enterprises participating in economic concentration must submit economic concentration notification documents to the National Competition Commission before conducting economic concentration if they fall within the notification threshold. economic concentration.
The threshold for notification of economic concentration is specifically specified in Article 13 of Decree 35/2020/ND-CP. The thresholds must be specifically announced as follows:
First, applicable to businesses that are not credit institutions, insurance businesses, and securities companies:
• Total assets in the Vietnamese market of an enterprise or group of affiliated enterprises of which that enterprise is a member reaches VND 3,000 billion or more in the fiscal year immediately preceding the year of expected implementation of economic concentration.
• Total sales revenue or purchase revenue in the Vietnamese market of an enterprise or a group of affiliated enterprises of which that enterprise is a member reaches VND 3,000 billion or more in the fiscal year immediately preceding the year of expected implementation. economic concentration;
• Transaction value of economic concentration is VND 1,000 billion or more;
• The combined market share of enterprises planning to participate in economic concentration is 20% or more in the relevant market in the fiscal year immediately preceding the year in which the economic concentration is expected to be implemented.
Second, the threshold for notification of economic concentration for businesses that are credit institutions, insurance businesses, and securities companies:
• Total assets in the Vietnamese market of an enterprise or group of affiliated insurance enterprises of which that enterprise is a member, of a company or group of affiliated securities companies of which that company is a member reached VND 15,000 billion or more in the fiscal year immediately preceding the year in which economic concentration is expected to be implemented; Total assets in the Vietnamese market of a credit institution or group of affiliated credit institutions of which that credit institution is a member reach 20% or more of the total assets of the system of credit institutions in the market Vietnam in the fiscal year immediately preceding the year expected to implement economic concentration;
• Total sales revenue or purchase revenue in the Vietnamese market of an enterprise or group of affiliated insurance enterprises of which that enterprise is a member reaches 10,000 billion VND or more in the fiscal year immediately preceding the expected year implementing economic concentration; Total sales revenue or purchase revenue on the Vietnamese market of the company or group of affiliated securities companies of which that company is a member reaches VND 3,000 billion or more in the fiscal year immediately preceding the year of expected implementation. currently economic concentration; Total revenue in the Vietnamese market of a credit institution or group of affiliated credit institutions of which that credit institution is a member reaches 20% or more of the total revenue of the system of credit institutions in the year the financial year immediately preceding the year in which economic concentration is expected to be implemented;
• Transaction value of economic concentration of insurance enterprises and securities companies is VND 3,000 billion or more; The transaction value of the economic concentration of the credit institution is 20% or more of the total charter capital of the system of credit institutions in the fiscal year immediately preceding the year in which the economic concentration is expected to be implemented;
• The combined market share of enterprises intending to participate in economic concentration is 20% or more in the relevant market in the fiscal year immediately preceding the year in which the economic concentration is expected to be implemented.
4. Documents for notification of economic concentration:
Pursuant to the provisions of Clause 1, Article 34 of the Competition Law 2018, your business must prepare a dossier including the following documents when making an economic concentration announcement:
(1) Notice of economic concentration according to the form issued by the National Competition Commission;
(2) Draft content of economic concentration agreement or draft contract, memorandum of understanding on economic concentration between enterprises;
(3) A valid copy of the Business Registration Certificate or equivalent document of each enterprise participating in the economic concentration;
(4) Financial statements of each enterprise participating in economic concentration for 02 consecutive years immediately preceding the year of announcement of economic concentration or financial statements from the time of establishment to the time of announcement of economic concentration for newly established enterprises with certification from an auditing organization according to the provisions of law;
(5) List of parent companies, subsidiaries, member companies, branches, representative offices and other dependent units of each enterprise participating in economic concentration (if any);
(6) List of goods and services that each enterprise participating in the economic concentration is trading;
(7) Information on market share in the intended field of economic concentration of each enterprise participating in economic concentration for 02 consecutive years immediately preceding the year of announcement of economic concentration;
(8) Plan to overcome the possibility of causing anti-competitive effects of economic concentration;
(9) Report assessing the positive impact of economic concentration and measures to enhance the positive impact of economic concentration.
If your business has any problems or needs support during the process of implementing economic concentration notification procedures, do not hesitate to contact Pham Consult immediately to receive the most dedicated and supportive support. best service quality.
