Conditions for establishing an alcohol trading company in Vietnam

With the culinary culture of our country, the wine business is now a very potential field in the Vietnamese market. To learn more about the necessary conditions when establishing an alcohol trading company, Viet An Law Firm sends to customers a summary of legal regulations surrounding this field as follows.

General conditions for establishment of companies and enterprises according to current regulations in Vietnam

Conditions on charter capital and legal capital when establishing a company

• Charter capital: is the total value of assets contributed or committed by members when establishing a limited liability company or partnership; is the total par value of shares sold or registered to buy when establishing an enterprise, for joint-stock companies. Charter capital will affect the license tax payable annually of the business, and is also a consideration factor when your partners refer to cooperation
• Legal capital: is the minimum capital required by law to establish an enterprise

Conditions on the entity establishing an enterprise

All organizations and individuals have the right to establish and manage enterprises in Vietnam, except for the cases specified in Clause 2, Article 17 of the Law on Enterprises 2020 Conditions on legal representatives

The legal representative of the enterprise must be an individual, from full 18 years old, have full capacity for civil acts, not be prohibited from managing and establishing an enterprise (mentioned in Section 2. Conditions on the entity establishing the enterprise); The legal representative does not have to be a capital contributor in the company.

The legal representative of the enterprise can be Vietnamese or foreigner. The company’s charter specifies the number, management titles and rights and obligations of the legal representative of the enterprise.

Company name conditions

The conditions for company name are specified from Articles 38 – 42 of the Enterprise Law 2020 and do not fall into the following prohibited cases:

• Naming the same name or confusing name with the name of the registered enterprise is specified in Article 42 of this Law.
• Use the names of state agencies, people’s armed forces units, names of political organizations, socio-political organizations, socio-political-professional organizations, social organizations, socio-professional organizations to make all or part of the proper name of the enterprise, unless otherwise approved by the agency, that unit or entity.
• Using words and symbols that violate the historical, cultural, moral and fine traditions and customs of the nation.

Business conditions when registering

Enterprises are allowed to do business in non-prohibited legal lines and have registered business lines with management agencies, are not allowed to do business in lines prohibited from business investment; doing business in conditional investment lines when the business conditions prescribed by the Law on Enterprises and the Law on Investment are not satisfied or the business conditions are not maintained during operation.

Conditions on the head office of the company

The head office of the enterprise is the contact point of the enterprise in the territory of Vietnam, whose address is determined including the number of houses, niches, alleys, alleys, streets, streets or villages, hamlets, hamlets, communes, wards, townships, districts, districts, towns, cities of provinces, provinces or centrally-run cities; telephone number, fax number and email (if applicable).

Meet specific business conditions in the field of alcohol business in Vietnam

Pursuant to the provisions of  Section 46 of Appendix IV of the Law on Investment 2020, the alcohol business is a conditional business. Therefore, if a legal entity wants to establish and put a company into operation, in addition to establishing a business, the legal entity must apply for a license that meets the conditions corresponding to the fields of alcohol business.

Specific conditions for each field of alcohol business are specified in Decree 105/2017/ND-CP as follows:

Industrial alcohol production conditions:

• Being an enterprise established in accordance with the provisions of law.
• There are lines of machinery, equipment and technological processes for alcohol production to meet the expected scale of production.
• Ensure food safety conditions as prescribed.
• Ensure environmental protection conditions as prescribed.
• Meet regulations on alcohol labeling.
• Having qualified and professional technicians suitable to the winemaking business and profession.

Conditions for the production of craft alcohol for business purposes

• Being an enterprise, cooperative, union of cooperatives or business households established in accordance with the provisions of law.
• Ensure food safety conditions and label alcohol goods according to regulations.

Conditions for the production of craft alcohol for sale to enterprises with an Industrial Alcohol Production License for reprocessing

• Having a purchase and sale contract with an enterprise that has an industrial alcohol production license.
• In case alcohol is not sold to an enterprise having an industrial alcohol production license, craft alcohol producing organizations or individuals shall have to carry out procedures for issuance of craft alcohol production licenses for business purposes as prescribed in this Decree.

Conditions of alcohol distribution

• Being an enterprise established in accordance with the provisions of law.
• Having a alcohol distribution system in 02 provinces and centrally-run cities or more (including the area where the enterprise is headquartered); In each province or centrally-run city, there must be at least 01 wholesale alcohol trader. In case an enterprise establishes a branch or business location outside the head office for alcohol trading, a certificate from the wholesale alcohol trader is not required.
• There are written introductions or principle contracts of alcohol producers, other alcohol distributors or overseas alcohol suppliers.

Conditions of wholesale of alcohol

• Being an enterprise established in accordance with the provisions of law.

There is a wholesale alcohol system in the province or centrally-run city where the enterprise is headquartered with at least 01 alcohol retailer. In case an enterprise establishes a branch or business location outside its head office for alcohol trading, a certificate from a alcohol retailer is not required

• Have written referrals or principle contracts of alcohol producers, alcohol distributors or other wholesale alcohol traders,

Conditions of retail sale of alcohol

• Being an enterprise, cooperative, union of cooperatives or business households established in accordance with the provisions of law.
• Have the legal right to use a  fixed business place with a clear address.
• There are written referrals or principle contracts of alcohol producers, alcohol distribution merchants or alcohol wholesale traders.

Conditions for the sale of alcohol for on-site consumption

• Being an enterprise, cooperative, union of cooperatives or business households established in accordance with the provisions of law.
• Have the lawful right to use a fixed business place, clear address and have registered the sale of alcohol for on-site consumption with the Economic Division or the Economic and Infrastructure Department of the district where the trader has his/her business establishment
• Alcohol for on-site consumption must be supplied by a merchant who holds a license to manufacture, distribute, wholesale or retail alcohol
• Where traders produce their own alcohol for sale for on-site consumption, they must obtain an industrial alcohol production license or a craft alcohol production license for business purposes as prescribed in this Decree.

Competence to grant alcohol business licenses

• The Ministry of Business and Trade is the agency issuing industrial alcohol production licenses with a scale of 03 million liters / year or more and alcohol distribution licenses;
• The Department of Business and Trade is the agency issuing licenses for industrial alcohol production with a scale of less than 03 million liters/year and licenses for wholesale sale of alcohol in provinces and centrally-run cities;
• The Economic Division or the Economic and Infrastructure Division under the district-level People’s Committee is the agency that issues craft alcohol production licenses for business purposes and alcohol retail licenses in the locality

Duration of Alcohol License

• The term of the Industrial Alcohol Production License is 15 years;
• The term of the Craft Alcohol Production License for Business Purposes, Alcohol Distribution License, Alcohol Wholesale License, Alcohol Retail License, On-Site Consumption Alcohol Sale License is 05 years.

As a professional law firm in the field of carrying out business registration procedures, establishing companies and consulting on issuance of operating licenses, Viet An Law Firm is reliable for businesses. Customers wishing to advise and perform services to establish an alcohol trading company, please contact Viet An Law directly for the fastest and most professional support!