Conditions for establishing a restaurant business company in Vietnam

As economic conditions are developing and people’s incomes are improving and enhanced, people’s demand for delicious, beautiful, unique and nutritious food is increasing. Therefore, restaurant business is a very developing service industry and attracts many investors. However, to establish a restaurant business company, investors need to note the conditions of establishment. In the article below, Viet An Law will answer for investors conditions for establishing a restaurant business company.

Legal bases

• Vietnam’s commitments in the WTO.
• Enterprise Law 2020.
• Law on Food Safety 2010.
• Decree No. 67/2016/ND-CP stipulates conditions for food production and trading under specialized management of the Ministry of Health.
• Decree No. 105/2017/ND-CP on alcohol trading, amended and supplemented by Decree 17/2020/ND-CP.
• Decree No. 15/2018/ND-CP details the implementation of a number of articles of the Law on Food Safety.
• Decree 08/2022/ND-CP details a number of articles of the Law on Environmental Protection.
• Decree 136/2020/ND-CP details a number of articles and measures to implement the Law on Fire Prevention and Fighting and the Law amending and supplementing a number of articles of the Law on Fire Prevention and Fighting.
• Decree No. 01/2021/ND-CP on business registration

What is restaurant business?

A restaurant is a place specializing in selling and providing foods and drinks to customers to make a profit. Each restaurant is diverse and rich with different types of food and drinks to satisfy the needs of customers. Food and beverage business is the process of operating equipment, from management, supervision, receptionist, waitress, cashier to kitchen department. Each department takes on a different role and is trained according to the process to meet restaurant service standards. This is to improve service quality, bring the best experience to customers, and bring the highest revenue and profit to the restaurant.

Market access conditions for restaurant business services in Vietnam

According to Vietnam’s commitments in the WTO

• When Vietnam joined the WTO, it committed to open the market for foreign investors to access the market for restaurant business in Vietnam for the following subsectors: food service (CPC 642) and beverage (CPC 643)
• Vietnam does not restrict market access in the commercial presence of “food service (CPC 642) and beverage (CPC 643)”, does not restrict market access except that within 8 years from the date of accession, the provision of services should be carried out in parallel with construction investment, upgrade, renovate or acquire the restaurant, then without restrictions.

Thus, foreign investors can now set up restaurant companies in Vietnam without any market access restrictions as committed by the WTO. The conditions of incorporation applied in this case are the same for domestic investors.

Conditions for establishing a restaurant business company in accordance with Vietnamese law

Conditions for business registration

Restaurant business activities are activities with fixed locations and are regular, so they do not fall into business cases that are not subject to registration specified in Clause 2, Article 79 of Decree No. 01/2021/ND-CP. Therefore, investors who wish to do this service legally are required to register their business.

Conditions for ensuring fire safety and fighting

• Pursuant to Decree No. 136/2020/ND-CP regulating fire protection. Depending on the total business area or volume, the restaurant owner determines whether his establishment is under fire prevention and fighting management or the establishment is in danger of fire and explosion.
• In particular, restaurants with a total business area of 300 m2 or  more or a total volume of 3000m³ or more must meet the strict conditions set out in Article 5 of the Decree.

Thus, depending on the scale of business, restaurant owners need to carry out inspection, training and professional retraining according to the corresponding list of establishments to ensure that fire safety conditions are met according to regulations.

Conditions on food safety and hygiene

Clause 10, Article 5 of the 2010 Law on Food Safety and Hygiene stipulates acts of prohibiting food production and trading at establishments without certificates of satisfaction of food safety conditions as prescribed by law.

Pursuant to Clause 1 Article 11 of Decree No. 15/2018/ND-CP stipulating that food production and trading establishments must have certificates of satisfaction of food safety conditions when conducting food and catering business. Except for restaurants dealing in food that do not have a fixed location; Restaurants in hotels will not be subject to the certificate of food safety eligibility.

In order for a restaurant business company to own the certificate of food safety eligibility, it must meet the following criteria:

• Have sufficient conditions to ensure food safety suitable to each type of food production and trading according to regulations.
• Having registered food business lines in the business registration certificate.

Conditions on places of processing and restaurant business

• The kitchen is arranged securely, without cross-contamination between unprocessed food and processed food
• There is enough water meeting technical standards for processing and trading.
• Sewers in the store area, kitchen must be ventilated, not stagnant
• The cafeteria must be cool, well-lit, maintain a clean sanitary regime, take measures to prevent insect and animal pests
• There are food storage facilities, toilets, hand washing and daily waste and garbage collection.
• The head of the unit having a collective kitchen is responsible for ensuring food safety.
• Cooking and processing utensils must ensure safety and hygiene.
• Eating utensils must be made of safe materials washed, kept dry.
• Comply with regulations on health, knowledge and practices of persons directly involved in food production and trading.

Conditions in food processing and preservation

• Use of food and food raw materials must be clear of origin and ensure safety and store food samples
• Food must be prepared to ensure safety and hygiene.
• Food for sale must be kept in glass cabinets or hygienic storage equipment, resistant to dust, rain, sun and the penetration of insects and harmful animals; are sold on the table or the price is higher than the ground.

Conditions on persons directly involved in food processing

• Certificate of health adequacy of the establishment owner and persons directly involved in food production and trading issued by district-level health establishments or higher; report of negative stool culture results of pathogens causing intestinal diseases (cholera, dysentery, bacillus and typhoid) of people directly involved in food production in areas where diarrhea epidemics are circulating as announced by the Ministry of Health.
• Certificate of knowledge of food safety of the establishment owner and persons directly involved in food production and trading (certified copy of the establishment);

Some licenses related to the restaurant business in Vietnam

Environmental protection planning

Pursuant to Decree No. 08/2022/ND-CP stipulating depending on the production and business plan, capacity scale, frequency of wastewater, waste, emissions generated… to determine whether the restaurant is subject to registration of environmental protection plans according to regulations. Companies wishing to do restaurant business need to see in detail the criteria according to Decree No. 08/2022/ND-CP.

Consumer Alcohol Retail License

For a restaurant business company that does business or retails alcohol, it is necessary to apply for a retail license to sell consumer alcohol.

Pursuant to Article 19 of Decree No. 105/2017/ND-CP, a dossier of application for a retail alcohol license should contain:

• Application for a alcohol wholesale license according to Form No. 01 issued under Decree 105/2017/ND-CP)
• A copy of the certificate of registration of an enterprise, cooperative, cooperative union or business household.
• A copy of the lease/loan agreement or document proving the legal right to use the proposed premises as a retail location.
• A copy of the written introduction or principle contract of the alcohol producer, alcohol distributor or wholesale alcohol trader.

If you need advice on restaurant company establishment services, please contact Viet An Law Firm for the most effective support.