(+84) 96 167 55 66
info@vietanlaw.com

Set up a retail business foreign capital company in Vietnam

Establishing a distribution company with foreign  capital is a service that many foreign investors are interested in in Vietnam, an emerging market with more than 90 million people, more than 50% of the young population under 35 years old. Vietnam has so far participated in many major international treaties such as WTO, AFAS,…

foreign capital foreign investment

With the purpose of supporting investors to carry out retail distribution investment procedures (to consumers) in Vietnam,  Viet An Law Firm would like to advise on legal procedures as follows:

Legal basis

  • International treaties: WTO, AFAS, FTAs, VKFTA;
  • Investment Law 2020:
  • Enterprise Law 2020;
  • 2005 Commercial Law;
  • Decree 35/2006/ND-CP dated 31/03/2006;
  • Decree 08/2018/ND-CP dated 15/01/2018 amending Decree 35/2006/ND-CP;
  • Decree 09/2018/ND-CP dated 15/01/2018.

Conditions for investment in setting up a retail business company or contributing business investment capital in Vietnam

Investment conditions under treaties to which Vietnam is a contracting party (WTO, AFAS, FTAs, VKFTA)

  • The scope of operation of foreign capital economic organizations includes:
  • Commission Agents (CPC 621, 61111, 6113, 6121);
  • Wholesale (CPC 622, 61111, 6113, 6212);
  • Retail (CPC 631 + 632, 61112, 6113, 6212) (including multi-level sales);
  • Franchising (CPC 8929).
  • Distribution franchises for: cigarettes and cigars, books, newspapers and magazines, recorded items, precious metals and precious stones, pharmaceuticals, explosives, crude and processed oil, rice, cane sugar and beet sugar.
  • Conditions for setting up retail establishments: The establishment of retail establishments (other than the first retail establishment) by foreign capital economic organizations will be considered on the basis of economic needs examination (ENT).

Investment conditions under Vietnamese law

Conditions for establishing retail establishments

  • Have a financial plan to set up a retail facility;
  • No more overdue tax debts in case they have been established in Vietnam for 01 year or more;
  • The location of the retail establishment in accordance with the relevant planning in the geographical market area.

Conditions for setting up a retail establishment other than the first retail establishment

  • In case economic needs inspection is not required: The same conditions as for setting up the first retail establishment apply
  • Where an economic needs check must be performed:
  • Satisfy the conditions specified in Clause 1 of this Article;
  • Meeting the Economic Needs Inspection criteria includes: The size of the geographic market area affected when the retail establishment operates; The number of retail establishments operating in the geographic market area; The impact of retail establishments on the stability of the market and business activities of retail establishments and traditional markets in the geographical market area; Impacts of retail establishments on traffic density, environmental sanitation, fire protection in the geographical market area;  The ability of retail establishments to contribute to the socio-economic development of the geographical market area.

For franchising

Traders are allowed to grant franchises when the business system intended to be used for franchising has been in operation for at least 01 year”.

Procedures to set up a foreign capital company doing retail distribution business in Vietnam

Step 1: Investors apply for an Investment Registration Certificate

Dossier of issuance of Investment Certificate

  • A written request for implementation of an investment project;
  • Documents on the legal status of the investor: a copy of the identity card or identity card or passport (if an individual); a copy of the certificate of incorporation or equivalent document and the passport of the capital manager (if it is an organization);
  • An investment project proposal includes the following contents: investors implementing the project, objectives, scale and investment capital, capital mobilization plan, location, duration, investment progress, labor demand, proposal for investment incentives, impact assessment, socio-economic efficiency of the project;
  • Documents proving the financial capacity of the investor include at least one of the following documents: financial statements of the last 02 years of the investor; commitment to financial support of the parent company; commitment to financial support of the financial institution; guarantee on the financial capacity of the investor; other documents proving the financial capacity of the investor;
  • An investment project proposal includes the following principal contents: investor or investor selection form, investment objectives, investment scale, investment capital and capital mobilization plan, location, duration, implementation progress, information on the current status of land use at the project site and land use demand proposal (if any), demand for labor, proposal for investment incentives, impacts, socio-economic efficiency of the project, preliminary environmental impact assessment (if any) in accordance with the law on environmental protection.

Where the law on construction provides for the preparation of a pre-feasibility study report, the investor may submit the pre-feasibility study report instead of the investment project proposal;

  • In case the investment project does not request the State to allocate land, lease land, permit change of land use purpose, submit copies of land use right papers or other documents determining the right to use the location for the implementation of the investment project;
  • Contents of explanation of technologies used in investment projects, for projects subject to appraisal and collection of opinions on technologies in accordance with the law on technology transfer;
  • Other documents related to the investment project, requirements on conditions and capacity of the investor as prescribed by law (if any);
  • Power of attorney for Viet An Law.

Place of application: Department of Planning and Investment where the head office is expected to be located.

Order of processing: Within 15 days from the date of receipt of a complete and valid dossier, the Department of Planning and Investment will issue an Investment Registration Certificate to the foreign investor. In case of refusal to grant a grant, the Department of Planning and Investment will reply in writing clearly stating the reason.

Step 2: Set up a retail business foreign capital business company in Vietnam

Apply foran Business Registration Certificate

Business establishment documents

  • Application for registration of the enterprise;
  • The company’s charter;
  • List of founding shareholders and shareholders being foreign investors (if they are joint-stock company); List of members (if it is a two-member limited liability company);
  • Certified copy of identity card or citizen identification card or passport (if an individual); establishment decision, business registration certificate or equivalent document and citizen identity card or identity card or passport with written authorization for the capital manager in Vietnam (if it is an organization);
  • A certified copy of the granted Investment Registration Certificate;
  • Power of attorney for Viet An Law Firm;

Place of application: Department of Planning and Investment where the business is headquartered.

Duration: 03 – 06 working days.

Disclosure of contents of business registration information

  • After being granted the Business Registration Certificate, an enterprise must publicly announce it on the National Business Registration Portal and pay fees as prescribed by law. The contents of the announcement include the contents of the Business Registration Certificate and the following information:
  • Business lines;
  • List of founding shareholders; list of shareholders being foreign investors, for joint-stock company (if any).
  • Publication fee: The request for publication of enterprise registration contents and payment of fees for disclosure of enterprise registration contents shall be made at the time the enterprise submits the enterprise registration dossier. In case an enterprise is not granted enterprise registration, the enterprise will be refunded the fee for announcing enterprise registration contents.

The announced fee is VND 100,000 as prescribed in Circular 47/2019/TT-BCT.

Seal of the business

  • A seal includes a seal made at a seal engraving establishment or a seal in the form of a digital signature in accordance with the law on e-transactions.
  • The enterprise decides on the type of seal, quantity, form and content of the seal of the enterprise, branches, representative offices and other units of the enterprise.
  • The management and retention of the seal shall comply with the provisions of the company’s charter or regulations promulgated by the enterprise, branch, representative office or other unit of the enterprise bearing the seal. Enterprises use seals in transactions in accordance with the provisions of law.

Dossiers of application for business licenses, licenses for setting up retail establishments in Vietnam

Dossiers to issue business licenses, licenses for setting up retail establishments

  • An application for a permit for setting up a retail establishment (Form No. 04 in the Appendix enclosed with this Decree).
  • The explanation reads:
  • Location of retail establishment
  • Retail Establishment Business Plan
  • Financial plan for the establishment of retail premises
  • Documents of the tax authorities proving that there is no longer any overdue tax owed.
  • Copy: Business Registration Certificate, Investment Registration of the project to establish a retail establishment (if any), Business license.
  • An explanation of the prescribed ENT criteria, in case of ENT implementation, includes:
  • The impact of retail establishments on the stability of the market and business activities of retail establishments and traditional markets in the geographical market area;
  • Impacts of retail establishments on traffic density, environmental sanitation, fire protection in the geographical market area;
  • The ability of retail establishments to contribute to the socio-economic development of the geographical market area, specifically:

Services of setting up foreign capital company of Viet An Law Firm

  • Advising on conditions for establishing a foreign capital company: capital contribution ratio of foreign investors in Vietnam; business conditions for trades; project implementation location; note the procedures before and after the establishment of a foreign capital company;
  • Advising on choosing the right type of company for investors: Limited company or joint stock company;
  • Advising on opening a capital transfer account, capital contribution duration;
  • Consulting and guiding investors to prepare necessary documents to establish a foreign capital company;
  • Advising and drafting company establish documents for investors;
  • Representing investors to work with competent state agencies of Vietnam in the process of carrying out company establishment procedures for investors (Application for Investment Registration Certificate, Business Registration Certificate, Business License,  License according to specialized requirements,  make legal entity seals, procedures after company establishment,…;
  • Comprehensive, regular consultancy, accounting services, tax law package of activities arising in the process of conducting business in Vietnam for investors.

Related Acticle

Set up an intellectual property consulting company in Vietnam

Set up an intellectual property consulting company in Vietnam

Intellectual property is the result created by human intelligence through creative activities. Accordingly, “intellectual property” is understood as ownership of intellectual assets. Thus, what conditions must be met to establish…
Set up a company in Vietnam based on division

Set up a company in Vietnam based on division

For companies established based on company division, business registration is an important step. The business registration process ensures legal compliance and creates favorable conditions for the operations of newly established…
Set up a customs clearance service company in Vietnam

Set up a customs clearance service company in Vietnam

Along with the development of today’s society, the need to keep up with the trends of the times is increasingly enhanced and expanded, making the customs clearance service industry play…
Procedures for setting up a joint venture company in Vietnam

Procedures for setting up a joint venture company in Vietnam

Establishment of a joint venture company is a form of foreign investors contributing capital in Vietnam in the form of 100% foreign capital contribution or joint venture with Vietnamese investors…
Set up a company in Vietnam providing waste treatment

Set up a company in Vietnam providing waste treatment

Currently, environmental issues are always of concern to society, in waste is a painful problem that is always sought to be solved. Many waste treatment companies were born to meet…

CONTACT VIET AN LAW

Hanoi Head-office

#3rd Floor, 125 Hoang Ngan, Hoang Ngan Plaza, Trung Hoa, Cau Giay, Hanoi, Vietnam

info@vietanlaw.com

Ho Chi Minh city office

Room 04.68 vs 04.70, 4th Floor, River Gate Residence, 151 – 155 Ben Van Don Street, District 4, HCM, Viet Nam

hcm@vietanlaw.com

SPEAK TO OUR LAWYER

English speaking: (+84) 9 61 67 55 66 - Lawyer Dong Van Thuc ( Alex) (Zalo, Viber, Whatsapp, Wechat)

Vietnamese speaking: (+84) 9 33 11 33 66 - Dr. Lawyer Do Thi Thu Ha (Zalo, Viber, Whatsapp, Wechat)