Granting a license to set up a retail outlet for a company in Vietnam

Vietnam possesses an appealing and highly potential retail market that attracts not only domestic investors but also numerous foreign investors. There have been considerable foreign investors from countries such as Japan, Thailand, South Korea, and others. However, when foreign investors intend to engage in retail activities in Vietnam, they are required to meet certain conditions.

According to Decree 09/2018/NĐ-CP, economic organizations with foreign investment must obtain a Retail Establishment License in order to establish retail outlet in Vietnam.

Conditions for Granting a license to set up a retail outlet for a company in Vietnam

For the first retail establishment

• Have a financial plan to set up a retail establishment;
• No more overdue tax debt in case it has been established in Vietnam for 01 year or more;
• The location of the retail establishment is consistent with the relevant planning in the geographical market area.

For other than the first retail establishment

According to the law, when setting up a retail establishment other than the physical retail establishment, investors must carry out an economic needs test (ENT), unless the retail establishment has an area of ​​less than 500m2, set up in a commercial center and not a convenience store or mini supermarket. Thus, depending on each case, investors need to meet different conditions to be granted a license to set up a retail establishment:

• In case the economic needs test is not required:

Satisfying the conditions corresponding to the conditions for setting up the first retail establishment;

• In case the economic needs test must be carried out:

Satisfying the same conditions as the first retail establishment and meeting the economic needs test (ENT):

• The size of the geographic market area is affected when the retail establishment operates;
• Number of retail establishments operating in the geographic market area;
• Impacts of retail establishments on the stability of the market and business activities of retail establishments, traditional markets in the geographical market area;
• The influence of retail establishments on traffic density, environmental sanitation, fire prevention and fighting in the geographical market area;
• The ability of retail establishments to contribute to the socio-economic development of the geographical market area.

Dossier for granting a license to set up a retail outlet for a company in Vietnam

1. An application form for a license to set up a retail establishment (made according to the form);
2. Explanatory statement;
3. Documents from tax authorities proving that there are no past due tax debts.
4. Copy: Enterprise Registration Certificate; Investment Registration Certificate in retail establishment project (if any); Business license.
5. An explanation of the ENT criteria (for some specified criteria) in the event that an ENT must be performed.

The dossier shall be submitted to the Department of Industry and Trade where the foreign-invested economic organization is headquartered. Depending on the cases prescribed by law, the Department of Industry and Trade shall grant permits to dossiers after meeting all conditions or after consulting the Ministry of Industry and Trade and the line ministries.

Procedures for granting a license to set up a retail outlet for a company in Vietnam

In case of granting a license to establish a retail establishment and a retail establishment other than the first retail establishment but ENT procedures are not required

The investor sends the dossier to the Department of Industry and Trade where the foreign-invested economic organization has a retail establishment. If the dossier meets the conditions, the Licensing Agency shall send the dossier to the Ministry of Industry and Trade for opinions and only grant the license to establish a retail establishment to the investor after obtaining the written approval of the Ministry of Industry and Trade.

In case of granting the License to establish a retail establishment other than the actual retail establishment, ENT procedures are required

Upon receipt of a qualified application, the Licensing Authority proposes to establish an ENT Council. After obtaining the conclusion of the license proposal from the Chairman of the ENT Council, the Department of Industry and Trade has the authority to send the dossier together with the written opinion of the Ministry of Industry and Trade. The Department of Industry and Trade shall issue licenses to investors after receiving written approval from the Ministry of Industry and Trade.

A license to set up a retail establishment has the following contents:

• Name, enterprise code, head office address;
• Name and address of the retail establishment;
• Type of retail establishment;
• Size of retail establishment;
• Other contain;
• Term of license to set up retail establishment.

For any questions related to service of granting a license to set up a retail outlet for a company in Vietnam and carry out investment procedures in a foreign-invested company , please contact Viet An Law Firm for detailed advice!