Establish foreign restaurant in Vietnam

Currently, doing catering business is a potential investment sector which is growing rapidly. Tastes and trend of Vietnamese diners are diverse and variable. They are eager to try new dishes. In large cities, it is not hard to find restaurants owned by foreigners which provides their traditional dishes of many nations such as: France, Italy, Japan, Korea, Singapore, Thailand, China, India… No matters how the economy changes, our food demand is an everyday issue. However, running a medium and above restaurant requires a huge capital and year-long paypack period as well as an effective marketing plan in order to compete with many competitors.  Many foreigners have been living in Vietnam for a long time wish to open restaurants here to serve their traditional dishes. It is not only passion in culinary arts but also their pride helping them through homesick.

With many years of experiences in investment and enterprises consulting, Viet An Law Firm realizes that many foreign investors often feel confused and waste time for administrative procedures; especially in food industry which is a concerned issue of this society. In order to give our Clients a hand to establish foreign restaurant in Vietnam, Viet An Law Firm collects and provides some basic information as follows:

In accordance with the Schedule of Specific Commitments in Services of Vietnam in WTO, catering services (CPC 642) and beverage (CPC 643) do not contain any limitation on foreign investors. That means foreigners are allowed to establish 100% foreign-owned company to provide catering services in Vietnam.

There are two options foreign investors may choose:

• Establish foreign-owned company providing catering services in Vietnam;
• Contribute capital, purchase shares, purchase capital contribution to Vietnamese company providing catering services in Vietnam.

Option 1: Establish foreign-owned company providing catering services in Vietnam

Step 1: Apply for the Investment Registration Certificate

An application for the Investment Registration Certificate includes:

• A written request for permission for project execution;
• Individual investors: copies of ID or passport of each individual;
• Organization investors: copies of Establishment Certificate or equivalent paper confirming the legal status;
• Project proposal specifying: the investors, project’s objectives and scale; capital and capital rising method; location, duration and schedule of the project; labor demand;
• Copies of financial statements in the current 02 years or financial support commitment of the parent company or financial institutions; guarantee for investors’ financial capacity, description of investors’ financial capacity; request for investment incentives; assessment of socio-economic effects of the project;
• Land use demand. If the project does not use land allocated or leased by the State or does not require the State to change land use purpose, the copies of the lease agreement or equivalent papers proving that investors have rights to use the location shall be submitted;
• If the project use any technology in the List of technologies restricted from transfer, investors have to submit the explanation on technology transfer.

Submit the application at: The Department of Planning and Investment.

The process: Within 15 days from the receipt date of the valid application, the Department of Planning and Investment will grant the Investment Registration Certificate to foreign investors. If the Department of Planning and Investment refuse to grant, they will respond in notices and explain the reasons.

Step 2: Apply for Business Registration Certificate

An application for the Business Registration Certificate includes:

• A written request for business registration;
• The Articles of Associates;
• The list of members of the multi-member limited liability company or the list of partners of partnership;
• Notarized copies of ID or valid passport of each individual member; notarized copies of the Business Registration Certificate/Establishment Certificate of each organization member; notarized copies of ID or valid passport of each legal representative of each organization;
• Power of attorney (Clients grant to Viet An);
• Certificate of Investment Registration of foreign investors.

Submission place: The Department of Planning and Investment.

Duration: 03 – 06 working days.

Announce the business registration contents:

• Business registration information must be announced publicly on the National Portal of Business Registration within 30 days from the date of issuance of the Business Registration Certificate. The contents of the announcement are all the information stated in the Business Registration Certificate.
• Notice: In accordance with Clause 1 Article 26 of the Decree 50/2016/NĐ-CP, if the company does not announce or lately announce the business registration information on National Portal of Business Registration, they are fined an amount of money from 1.000.000 VND to 2.000.000 VND.

Engrave the seal and publish the seal sample:

• The company can authorized Viet An Law Firm or can engrave the seal by itself then announce the seal sample to the Department of Planning and Investment. The company is allowed to decide about the appearance, quantity and the contents of the deal but it must contain the name and the code of the company;
• After receiving the announcement on the seal sample, the Business Registry Office shall grant the receipt to the company, post the announcement on the National Portal of Business Registration and issue the Announcement on Publication of the seal sample to the company.

Step 3: Apply for Food Safety Certificate:

An application for Food Safety Certificate includes:

• A written request for Food Safety Certificate;
• Copy of the Business Registration Certificate;
• Description on facilities, devices, equipment meeting requirements of food safety;
• Health certificates (issued by clinics of districts and above) of the owners and employees directly making food;
• Certificates of food safety training of the owners and employees directly making food.

Place of submission: Department of Health.

Within 15 days from the date of submission of full and valid application, Department of Health shall directly assess food safety satisfaction of the facilities; if the restaurant meets the requirements, the Food Safety Certificate shall be granted; in case of refusal, the Department shall issue written explanation providing reasons.

Option 2: Contribute capital, purchase shares, purchase capital contribution to Vietnamese company providing catering services in Vietnam

This option shall help foreign investors save time and money as Investment Registration Certificate is not required. There is no limitation on foreign capital for this sector. Hence, foreign investors can own up to 100% capital of the company. Foreign investors just need to register to contribute capital, purchase shares, purchase capital contribution at the Department of Planning and Investment.

Step 1: Foreign investors register to contribute capital, purchase shares/capital contributions to the company

Application includes:

• Application for capital contribution, shares/capital contributions purchase indicating: the information of the target company, the foreign capital contribution after completing the procedures;
• Copies of the ID or passport of each individual investor; copies of Establishment Certificate or equivalent papers confirming the legal status of each investor who is an organization.

Submission place: The Department of Planning and Investment.

The process: If the capital contribution, shares purchase, capital contribution purchase of foreign investors comply with the regulations on investment forms and foreign capital contribution, within 15 days from the date of receipt of the valid application, the Department of Planning and Investment will grant a written announcement. If the application does not satisfies conditions, the Department of Planning and Investment will grant a written announcement providing reasons and explanation.

Step 2: Transfer the shares, capital contributions and change the shareholders or members of the company

Foreign investment consulting services at Viet An Law Firm:

• Consult about regulations and procedures for investment and business registration for foreign-owned companies in Vietnam;
• Consult about conditional business sectors and specialized conditions of each sector;
• Consult about application and documents for Investment Registration Certificate, Business Registration Certificate, sublicenses…;
• Consult about after-establishing issues: tax, labor, social insurance, intellectual property, commercial franchise.

If you are looking for legal advice about regulations and procedures to establish foreign restaurant in Vietnam, please contact Viet An Law Firm for more information!