With the issuance of new regulations on September 3, 2026, which take effect on October 18, 2026, the legal landscape surrounding goods trading by foreign investors has significantly shifted. Specifically, Decree 342/2026/ND-CP on goods trading activities of FDI companies in Vietnam establishes a new legal framework concerning the right to export, the right to import, the right to distribute, as well as activities directly related to the purchase and sale of goods by foreign investors and any FDI company in Vietnam. Notably, this new regulation narrows the application scope of the economic needs test, adds specific requirements for the location of establishing an FDI retail establishment, more clearly defines the affected geographic market area according to a 5,000 square meter threshold, and supplements the business licensing mechanism in certain cases related to national security. Consequently, these changes will deeply impact the market access conditions for foreign investors looking to expand their commercial presence.
04 notable changes for establishing an FDI retail establishment in Vietnam under Decree 342/2026/ND-CP
Compared to the previous framework, Decree 342 replacing Decree 09 is notable in the following four groups of issues:
| Content | Decree 09/2018/ND-CP | Decree 342/2026/ND-CP |
| Economic Needs Test (ENT) | In principle, a retail establishment beyond the first establishment had to conduct the economic needs test, except for some exempt cases. | Narrows the scope of the economic needs test; it does not apply to investors from countries or territories with international treaties in which Vietnam has committed to abolish the economic needs test. |
| Location conditions | Mainly required the location to conform with relevant planning. | Mandates that the location must comply with laws on land, planning, investment, construction, fire prevention and fighting, traffic safety, and environmental sanitation. |
| Affected geographic market area | No area threshold existed to determine the market level. | Under 5,000 square meters: considered at the commune or ward level; from 5,000 square meters and above: considered at the provincial level. |
| National security appraisal | Did not have a correspondingly specified mechanism. | Certain dossiers must obtain the approval opinions of the Ministry of Public Security and the Ministry of National Defense regarding national security issues. |
How the Economic Needs Test (ENT) barrier is removed under Decree 342/2026/ND-CP
What is the ENT in Vietnam?
ENT stands for Economic Needs Test Vietnam, which is used in the process of reviewing the establishment of a retail establishment beyond the first retail establishment of a foreign-invested enterprise in certain cases.
According to Article 23 of the previous Decree 09/2018/ND-CP, the establishment of a retail establishment beyond the first retail establishment had to conduct the economic needs test, except in cases where the retail establishment had an area of under 500 square meters, was established in a commercial center, and did not belong to the type of convenience store or mini supermarket.
The new decree has significantly changed this approach to goods trading by foreign investors.
Investors under CPTPP and EVFTA may enjoy the mechanism of not applying ENT
According to Clause 1, Article 22 of the decree:
“Article 22. Economic Needs Test (ENT)
1. Cases where the ENT must be conducted:
A foreign investor belonging to a country or territory that does not participate in an international treaty to which Vietnam is a member containing a commitment on abolishing the ENT, establishes a retail establishment beyond the first retail establishment, except in cases where that retail establishment has an area of under 500 square meters, is established in a commercial center, and does not belong to the type of convenience store, mini supermarket, or supermarket.”
Thus, the case that must conduct the economic needs test is a foreign investor from a country or territory that does not participate in an international treaty to which Vietnam is a member that contains a commitment on abolishing the test, when establishing a retail establishment beyond the first retail establishment.
Therefore, instead of widely applying the economic needs test to the second retail establishment onwards, the new decree ties the application of this test to the country or territory of the investor and the international commitments of Vietnam.
This is a point of significant meaning for foreign retailers coming from countries belonging to the free trade agreements where Vietnam has commitments to abolish the economic needs test, among which commitments related to CPTPP and EVFTA can be mentioned. However, when applied to each specific project, enterprises still need to check the international treaty and the scope of the corresponding market access conditions for foreign investors, rather than automatically determining that all investors from CPTPP or EVFTA are exempt from all conditions.
Besides the newly mentioned case, the exception for small retail establishments in commercial centers continues to be maintained under the new decree: a retail establishment beyond the first establishment that has an area of under 500 square meters, is established in a commercial center, and does not belong to the type of convenience store, mini supermarket, or supermarket does not fall into the case requiring an economic needs test.
How an FDI company in Vietnam should understand the removal of ENT
When planning to expand a retail system, it should not be understood that from October 18, 2026, every FDI company in Vietnam will be exempt from the economic needs test.
It should be understood that:
- Decree 342/2026/ND-CP narrows the application scope of the economic needs test and implements the international commitments of Vietnam on abolishing this test for investors from the corresponding countries or territories.
- For an investor who still falls into the case requiring the economic needs test, the enterprise must satisfy the criteria stipulated in Clause 2, Article 22 of Decree 342/2026/ND-CP .
New conditions on the location for opening an FDI retail establishment in Vietnam
This is a change that foreign retailers need to pay special attention to. According to Clause 1, Article 21 of Decree 342/2026/ND-CP, for the case of establishing the first retail establishment, the foreign invested economic organization must satisfy the condition of having no overdue tax debts if it has been established in Vietnam for one year or more as calculated up to the date of submitting the dossier.
Simultaneously, the location for establishing an FDI retail establishment must fully satisfy the conditions according to the laws on land management, planning, investment, construction, fire prevention and fighting, traffic safety, and environmental sanitation in order to establish a retail establishment in the relevant geographic market area.
The notable point is that this requirement is significantly expanded compared to the previous approach. According to Article 22 of the previous decree, the condition regarding location was mainly tied to conformity with the relevant planning in the geographic market area. Meanwhile, the new regulations add a series of specialized legal groups that enterprises must note.
This can be generalized into:
Land → Planning → Investment → Construction → Fire Prevention and Fighting → Traffic Safety → Environmental Sanitation.
Therefore, finding a commercially suitable premise does not mean that the location is automatically qualified to apply for a retail license for foreign companies.
A foreign direct investment enterprise should check the legality of the location right from the stage of selecting the premise, instead of only doing so after signing a long term lease contract.
The 5,000 square meter threshold when determining the relevant geographic market area
Another notable change is that Decree 342/2026/ND-CP for the first time more clearly stipulates the level of the affected geographic market area in the economic needs test criteria.
According to Point a, Clause 2, Article 22 of Decree 342/2026/ND-CP:
- For a retail establishment under 5,000 square meters, the affected geographic market area is considered at the commune or ward level or equivalent;
- For a retail establishment of 5,000 square meters or more, the affected geographic market area is considered at the provincial or centrally run city level.
This regulation has practical significance in determining the market scope that needs to be assessed when conducting the Economic Needs Test Vietnam.
Comparing the scope of the geographic market area:
| Retail establishment area | According to Decree 342/2026/ND-CP | Level of consideration |
| Under 5,000 square meters | Affected geographic market area | Commune or ward level or equivalent |
| From 5,000 square meters and above | Affected geographic market area | Provincial or centrally run city level |
Thus, 5,000 square meters is not the threshold to determine whether an economic needs test must be conducted or not. This is a point that requires special attention. The 5,000 square meter threshold is used to determine the level of the affected geographic market area during the process of evaluating the economic needs test criteria.
Therefore, it should not be understood that an FDI retail establishment under 5,000 square meters is automatically exempt from the test.
Addition of business licensing mechanism of FDI retail establishment in certain cases related to national security in Vietnam
One of the new contents that foreign direct investment enterprises must pay special attention to is the mechanism for seeking opinions on national security.
According to Point c, Clause 3, Article 8 and Point d, Clause 2, Article 36 of Decree 342/2026/ND-CP, the agency granting the business licensing or the license to establish a retail establishment must seek the approval opinions of the Ministry of Public Security and the Ministry of National Defense regarding national security issues in the following cases:
- A foreign investor not belonging to a country or territory participating in an international treaty to which Vietnam is a member;
- The case where the business service has not been committed for market opening in the international treaties to which Vietnam is a member;
- The case where the business goods have not been committed for market opening in the international treaties to which Vietnam is a member (lubricating oils, lubricating greases derived from petroleum; rice; sugar; recorded items; books, newspapers, and magazines);
- A foreign investor dominating an economic organization that is the owner of an intermediary e-commerce platform, a social network operating in e-commerce, or an integrated e-commerce platform that is a large digital platform according to the legal regulations on consumer protection and e-commerce;
- Granting a license to establish a retail establishment allowing the retail establishments to continue operating for: 100 retail establishments with a sales area of under 500 square meters each, and/or 50 retail establishments with a sales area of 500 square meters to under 3,000 square meters each, and/or 30 retail establishments with a sales area of 3,000 square meters or more each, in Vietnam;
- Granting a new license to establish a retail establishment when currently owning or participating in owning 100 retail establishments with a sales area of under 500 square meters each, and/or 50 retail establishments with a sales area of 500 square meters to under 3,000 square meters each, and/or 30 retail establishments with a sales area of 3,000 square meters or more each, in Vietnam.
Thus, this mechanism may be raised for certain specific groups of dossiers, among which the notable ones are:
- Certain cases where the investor is outside the scope of commitments of the international treaties applied by Vietnam;
- Certain e-commerce platforms with foreign elements falling under the regulatory scope;
- Retail chains reaching certain thresholds regarding the number and area of retail establishments.
This indicates that expanding the retail system of a foreign investor in the future requires not only attention to commercial conditions but also consideration of the entire chain’s scale and factors related to national security when evaluating market access conditions for foreign investors.
Frequently asked questions about Decree 342 replacing Decree 09 on goods trading by foreign investors
What an FDI company in Vietnam needs to prepare when opening a new retail point from October 18, 2026?
From the changes mentioned above, foreign investors and any FDI company in Vietnam planning to open additional retail establishments in Vietnam should conduct a review in the following sequence:
- Determine the country or territory of the investor and the relevant international treaties. This is an important step to determine whether the enterprise falls into the case of enjoying the commitment to abolish the economic needs test.
- Determine whether the proposed retail establishment is the first establishment or an establishment beyond the first establishment. The legal conditions of these two groups are not entirely identical.
- Determine the area and type of the retail establishment. It is especially necessary to distinguish the cases of under 500 square meters, from 500 square meters and above, and the 5,000 square meter threshold in determining the scope of the geographic market area.
- Check the legality of the location. The enterprise should not only check the planning but also simultaneously review land, investment, construction, fire prevention and fighting, traffic safety, and environmental sanitation according to the requirements in Article 21.
- Determine whether it falls into the case of requiring an economic needs test or requiring opinions on national security.
- Prepare the dossier for business licensing and/or the retail license for foreign companies in exact accordance with the enterprise’s specific case.
Conducting this review right from the project preparation stage will help limit situations where the enterprise has signed a premise lease contract but subsequently encounters obstacles regarding the legal conditions of the location or licensing conditions.
How Decree 342/2026/ND-CP impacts foreign retailers?
It can be seen that Decree 342 replacing Decree 09 creates two parallel trends.
- On one hand, the new regulation creates significant facilitation for certain foreign investors, especially investors from countries or territories that have international commitments from Vietnam on abolishing the economic needs test. This may create more room for foreign retail chains to expand their systems in Vietnam.
- On the other hand, the decree imposes more specific requirements on the legality of the location, the scope of the geographic market area, and national security.
Therefore, evaluating the impact of Decree 342/2026/ND-CP should not merely stop at the assessment that dropping the economic needs test means opening the market, but must comprehensively consider all the new conditions.
For foreign investors currently planning to open a new retail establishment, especially large scale retail chains, the timeline from October 18, 2026, must be viewed as a crucial milestone to review their expansion strategy, proposed locations, and licensing dossiers. Decree 342/2026/ND-CP takes effect from this date and simultaneously replaces the previous decree.
From October 18, 2026, must an FDI company in Vietnam still conduct ENT when opening a second retail establishment?
Not all cases require the test. According to Clause 1, Article 22 of Decree 342/2026/ND-CP, the economic needs test is applied to investors belonging to countries or territories that do not participate in an international treaty to which Vietnam is a member containing a commitment to abolish the economic needs test, when establishing a retail establishment beyond the first retail establishment, except for the cases exempted according to regulations.
Is an FDI retail establishment under 5,000 square meters exempt from ENT?
The 5,000 square meter mark is not the threshold to determine whether an economic needs test is required or not. According to Point a, Clause 2, Article 22 of Decree 342/2026/ND-CP, an area of under 5,000 square meters is merely the basis to determine that the affected geographic market area is considered at the commune or ward level or equivalent; from 5,000 square meters and above, it is considered at the provincial or centrally run city level.
What location conditions must be checked when an FDI company in Vietnam opens a new retail establishment?
According to Point b, Clause 1, Article 21 of Decree 342/2026/ND-CP, the location must satisfy the conditions according to the laws on land management, planning, investment, construction, fire prevention and fighting, traffic safety, and environmental sanitation.
As Decree 342/2026/ND-CP on goods trading activities of FDI companies in Vietnam creates a new legal framework for the goods trading activities of foreign-invested enterprises, Viet An Law is ready to support enterprises in reviewing and carrying out the appropriate procedures to secure a retail license for foreign companies.
Article written by: Lawyer Do Quynh Trang
Article reviewed and supervised by: Lawyer Trung Thi Lieu – over 15 years of experience.
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