Removing Barriers to Set Up Retail Establishments for FDI Companies in Vietnam

(under Decree No. 342/2026/ND-CP effective from October 18, 2026)

The issuance of Decree 342/2026/ND-CP by the Government on September 3, 2026, brings many positive signals for foreign investors. This document officially replaces Decree 09/2018/ND-CP, creating a breakthrough legal framework by removing barriers to set up retail establishments for FDI companies in Vietnam starting from October 18, 2026. The most significant highlight is the narrowing of the economic needs test (ENT) procedures, the reduction of documents proving financial capacity, and the shortening of application processing times. To help investors grasp the opportunity to expand their commercial supply chains, the expert team at Viet An Law has compiled and analyzed in detail the latest conditions and legal regulations applying to an FDI company engaging in business licensing for retail operations.

Summary of new points of Decree 342/2026/ND-CP for an FDI company opening a retail establishment in Vietnam

Narrowing the scope of economic needs test (ENT) application in Vietnam

Regulations on the ENT have always been the biggest bottleneck when an FDI company wants to expand its retail chain.

From October 18, 2026, Article 22.1 of Decree 342/2026/ND-CP comprehensively restructures this ENT exemption mechanism, specifically:

• Exempting the execution of ENT procedures for foreign investors belonging to countries and territories that have FTA commitments with Vietnam on abolishing the ENT (such as members of the CPTPP, EVFTA, and UKVFTA) when setting up a retail outlet FDI company from the second establishment onwards;
• Continuing to maintain the ENT exemption exception for retail establishments with an area of under 500 m2 located in a commercial center;
• Adding the supermarket model to the group excluded from the ENT exemption regulation (along with convenience stores and mini supermarkets according to the old regulations);

Consequence: Investors coming from countries without FTA commitments (only applying WTO commitments) are still subjects required to perform the ENT evaluation procedure in accordance with the provisions of current law.

Reforming conditions and licensing dossiers to establish retail establishments under the new regulations in Vietnam from 2026

The establishment of the first retail establishment is strongly simplified in terms of conditions by Decree 342/2026/ND-CP, helping the issuance of a retail outlet establishment license become more transparent and feasible in practice:

• Completely eliminating the requirement for a “financial plan”: accordingly, enterprises no longer have to attach audited financial statements, bank guarantee documents, or financial support commitments from the parent company;
• Abolishing the qualitative condition of conformity with the provincial retail network planning: the new regulation replaces this with a set of quantitative criteria based on specialized laws to avoid legal conflicts. The requirement for the establishment location must fully meet the conditions for establishing retail establishments in Vietnam regarding land management, investment, construction, fire prevention and fighting, traffic safety, and environmental sanitation;
• Standardizing documents on the location of the retail establishment into two mandatory groups: (1) documents proving the right to legal exploitation and use (lease contract) and (2) documents proving compliance with the specialized standards mentioned above.

Classifying the scale of retail establishments according to Decree 342/2026/ND-CP

Article 3.12 of Decree 342/2026/ND-CP for the first time defines the types of retail establishments by specific area thresholds:

Important definitions to determine the type are supplemented, including:

• The definition of sales area encompasses display, storage, and direct supplementary areas, requiring the premises owner and the FDI company to agree on the measurement method right in the premises lease contract;
• Excluding vending machines and mobile sales vehicles from the definition of a retail establishment (Article 3 Clause 10), which means these models do not generate the obligation to apply for a retail establishment license FDI in Vietnam;
• Converting the business model to a convenience store, mini supermarket, or supermarket will generate procedures to adjust the license and may entail supplementary ENT evaluation processes.

Recommendation: An FDI company operating a store with a scale of 300 to 500 m2 needs to review the type identification according to the new criteria.

Simplifying ENT criteria and optimizing administrative procedures in Vietnam

For cases where an FDI company must still perform the ENT, the evaluation process in Article 22.2 of Decree 342/2026/ND-CP is also significantly simplified compared to Decree 09/2018/ND-CP:

Decentralizing the geographic market evaluation by area

• Retail establishments under 5,000 m2: considered at the commune or ward level or equivalent;
• Retail establishments from 5,000 m2 and above: considered at the province or centrally-run city level.

Reducing the number of ENT evaluation criteria to 04 main groups

• Impact on market stability and the operation of retail establishments and traditional markets;
• The necessity of opening the establishment;
• The ability to contribute to socio-economic development;
• Conformity with requirements to ensure security, order, border and island security, and military zones.

Completely abolishing criteria that easily cause subjectivity from state agencies, such as:

• The number of retail establishments operating in the area;
• Impact on traffic density, environmental sanitation, fire prevention and fighting (already transferred to location conditions in Article 21);
• Job creation ability;
• Ability and level of contribution to the state budget.

Establishing an ENT Council

The ENT Council is established according to a regular operating regulation issued by the provincial People’s Committee, instead of an ad-hoc establishment for each licensing dossier.

Order and procedures for business licensing with ENT and without ENT applicable in Vietnam from October 18, 2026

Handling agency: The provincial People’s Committee acts as the focal point, abolishing the mechanism of sending dossiers to seek appraisal opinions from the Ministry of Industry and Trade (except for extremely large chain projects or those related to national security).

Submission method: submit directly at the One-Stop-Shop section, via public postal service, via authorization, or online at the National Public Service Portal.

Number of dossier sets: 01 set for all procedures (old regulations required 02 to 03 sets depending on the case).

Specific process:

Comparison of resolution time limits:

Expanding distribution business rights under the new Vietnamese regulations of Decree 342/2026/ND-CP

• Allowing an FDI company to exercise wholesale and retail rights for goods processed in Vietnam (besides goods manufactured in Vietnam and legally imported goods), thoroughly resolving obstacles for companies outsourcing domestic processing (Article 7.4 of Decree 342/2026/ND-CP);
• Allowing supermarkets, mini supermarkets, and convenience stores belonging to an FDI company to retail certain items not yet committed to opening (such as rice, sugar, books and newspapers) if fully meeting specialized conditions (Article 9.4 of Decree 342/2026/ND-CP);
• Synchronizing the regular term (except for some cases fixed at a 5-year term) of the goods trading business license of an FDI company according to the term of the Enterprise Registration Certificate, no longer rigidly bound to the term of the investment project (Article 10.2 of Decree 342/2026/ND-CP);
• Allowing flexible change of location for stores with an area of under 500 m2 within the same commercial center through the license adjustment procedure (taking only 05 working days) (Article 28.2 of Decree 342/2026/ND-CP).

Tightening control regulations and license revocation sanctions in Vietnam

Besides loosening the conditions for establishing retail establishments in Vietnam, Decree 342/2026/ND-CP also strengthens post-inspection work to ensure a healthy competitive environment:

• Increasing the frequency of periodic reporting to 02 times per year (before January 15 and July 15 annually) instead of one reporting period before January 31 according to the old regulations;
• Clearly stipulating the obligation to continuously maintain licensing conditions throughout the business operation process;
• Applying the sanction of operation suspension (maximum 12 months) if the enterprise does not fully meet the conditions according to legal regulations;
• Adding grounds for revocation of the business license and retail outlet establishment license if the enterprise is administratively sanctioned 03 times or more within 12 months for violations of the contents recorded on the license;
• Stipulating the milestone for the term of the retail outlet establishment license to be calculated according to the remaining validity period of the Investment Registration Certificate or the premises lease contract (prioritizing whichever time milestone is shorter).

Strategy for applying transitional regulations in Vietnam of Decree 342/2026/ND-CP

To maximize the benefits from the regulation on removing barriers to set up retail establishments for FDI companies in Vietnam from October 18, 2026, enterprises need to note the transitional milestones when submitting dossiers:

• Types of licenses issued before October 18, 2026, retain their full legal value and only have to apply the new Decree when a need for adjustment arises;
• For dossiers already submitted and undergoing processing, if the enterprise cannot supplement valid documents within 06 months from the time of request, the state agency will automatically switch to applying the new standards;
• For investors in the FTA bloc eligible for the ENT exemption for retail establishments in Vietnam, delaying the time of submitting dossiers to open a second retail establishment to the period after October 18, 2026, is an optimal plan to completely avoid the procedure of establishing an economic needs evaluation council.

Frequently asked questions about the retail outlet establishment license in Vietnam

Do vending machines of an FDI company need to apply for a retail outlet establishment license?

According to the new regulations, vending machines and mobile sales vehicles are not classified into the group of retail establishments. Therefore, an FDI company does not incur the obligation to apply for a retail outlet establishment license for these business forms.

Are supermarkets under 500 m2 exempt from ENT?

No, according to the new regulations of Decree 342/2026/ND-CP, a supermarket is a model that does not fall under the ENT exemption for retail establishments in Vietnam with an area of under 500 m2.

Do retail establishments under 500 m2 require an Investment Registration Certificate?

Decree 342/2026/ND-CP clearly differentiates: establishments under 500 m2 only require a Branch or Business Location Operation Registration Certificate. Projects setting up a retail outlet FDI company from 500 m2 and above are mandatorily required to apply for an Investment Registration Certificate.

Does an FDI company receiving the transfer of a domestic retail chain have to suspend business to apply for a license?

No. The law allows economic organizations that have received capital contributions or shares from foreign investors to continue maintaining retail operations at existing establishments. However, the enterprise is obligated to complete the procedures for granting a retail distribution license in Vietnam within a maximum period of 12 months.

Consulting services for setting up a retail outlet FDI company at Viet An Law

As a strategic legal partner for hundreds of FDI companies, Viet An Law provides comprehensive solutions related to business licensing:

• Appraising and evaluating legal risks of premises dossiers and location lease contracts before the enterprise makes an investment decision;
• Representing the FDI company in drafting the explanation of market access conditions, preparing dossiers to apply for a retail outlet establishment license and commercial business license;
• Building a safe legal roadmap, optimizing costs and time for mergers and acquisitions transactions of buying and merging retail chain systems;
• Providing compliance consulting services, supporting enterprises in executing periodic reports and explanations with state management agencies after licensing.

Removing barriers to set up retail establishments for FDI companies in Vietnam from October 18, 2026, in the spirit of Decree 342/2026/ND-CP, is an important step forward, promoting the competitiveness of the Vietnamese distribution market. To ensure the process of establishing a commercial chain takes place smoothly, in the right direction, and with legal safety, please contact Viet An Law directly for in-depth consultation and support for the fastest business licensing procedures.