What is an American Chamber of Commerce?
Updated: Oct 21, 2016.
American Chambers of Commerce (AmChams) are organizations formed under two systems: the system of their host country and the system of the United States.
In Vietnam, AmCham is established under the authority of the Decree of the Government Promulgating the Regulations on the Establishment of Foreign Business Associations in Vietnam, Decree No. 08/1998/NĐ-CP, 22 Jan 98.
In the United States, chambers of commerce are established and granted tax-exempt status under the authority of the Internal Revenue Code, 501(c)(6).
Vietnam: Regulations on the Establishment of Foreign Business Associations
In Vietnam, a foreign business association (chamber of commerce) is required to be
”…voluntary, … non-governmental, non-political, and non-profit.” Membership consists of ” … foreign businesses licensed … in Vietnam,” who nominate representatives to participate in the association. Only one association per foreign country is permitted, with its ” … main office located and registered in a province or city directly under the Central Authority of Vietnam.” The AmCham Vietnam Charter provides that the Chapter Board of Governors consists of “Any Company Representative, … Associate Company Representative resident in Vietnam … , provided that no less than two-thirds the Chapter’s Board of Governors shall be Company Representatives,” and “Members of the Chapter Board shall be elected at the Annual General Meeting by voting members of the relevant Chapter.”
Regulations on the Establishment of Foreign Business Associations in Vietnam, Decree No. 08/1998/NĐ-CP, 22 Jan 98 authorizes the following activities of a Foreign Business Association (Chamber of Commerce):
- organize internal information activities;
- organize activities and explore opportunities in commerce and investment;
- participate in activities for promoting commerce and investment which are organized by the Vietnam Chamber of Commerce and Industry and other Vietnamese authorities;
- organize meetings between the members of the Association and Vietnamese State management authorities in regard to matters in commerce, investment, and services;
- the Leadership Board of an Association shall have the right to represent the Association in putting forth proposals and measures to the Vietnamese State management authorities for the purpose of protecting the lawful rights and interests of member businesses and contributing to the creation of a healthy business environment;
- publish and circulate within the Association newsletters regarding commercial and investment activities in accordance with provisions of the Law on Publication of the Socialist Republic of Vietnam.
United States: Internal Revenue Code, Section 501(c)(6)
The Internal Revenue Code, Section 501(c)(6) provides for tax-exempt status for chambers of commerce and some other organizations that are not organized for profit. The predecessor of IRC 501(c)(6) was enacted as part of the Tariff Act of 1913 based on a request from the U.S. Chamber of Commerce for exemption for “nonprofit civic” and “nonprofit commercially-oriented” organizations.
U.S. Treasury Department regulations define a chamber of commerce as
” … an association having a common business interest, whose purpose is to promote the common business interest and not to engage in regular business of a kind ordinarily carried on for profit. Its activities are directed to the improvement of business conditions of one or more lines of business rather than the performance of particular services for individual persons.” Chambers of commerce ” … direct their efforts at promoting the common economic interests of all the commercial enterprises in a given trade or community.”
A “chamber of commerce” in the United States must possess all of the following characteristics:
- Common business interest
- Rules regarding membership and meaningful membership support
- Not organized for profit
- Earnings may not inure
- Activities directed to the improvement of business conditions
- Primary activity may not consist of performing particular services for individual persons
- Not engage in a regular business ordinarily carried on for profit.
For a brief explanation by the Internal Revenue Service of the United States about the above characteristics, please click: Characteristics of Business Leagues (Chambers of Commerce). To view a detailed explanation with examples, please click: Internal Revenue Code (IRC) 501(c)(6) Organizations (747kb pdf file).
The common business interest of AmCham companies is improve business conditions so as to promote trade and investment between Vietnam and the United States. Our charter and by-laws provide for member and associate company status to companies licensed and legally engaged in business in Vietnam. International and Vietnamese companies that are substantially involved with trade and investment between the Vietnam and the U.S. may qualify as associates. Similarly, companies outside of Vietnam that are substantially involved with trade and investment between the Vietnam and the U.S. may qualify for non-resident associate status. AmCham’s activities are directed to the improvement of business conditions related to trade and investment between Vietnam and the United States. AmCham does not perform particular services for individual persons or companies, and does not engage in a regular business ordinarily carried on for profit.
AmCham is an “Organization Member” of the national-level Chamber of Commerce of the United States of America®, and adheres to the Principles to Govern American Chambers Abroad established by the Chamber of Commerce of the USA, in cooperation with AmChams.
As an organization legally established in Vietnam, and a member of the Chamber of Commerce of the USA®, we respect and adhere to both of the above-mentioned regulatory systems.