The Vietnamese domestic economy continues to grow and is considered by many as one of the leading growth markets in Southeast Asia and globally. Accordingly, Vietnam has continued to attract foreign investors invest and expand their trading and retail activities, and tap into the growing market. In this article, we seek to bring some clarity to the process of establishing retail outlets for foreign investors.
Restrictions on retail activities in Vietnam
In general, the trading of goods (exports, imports, wholesale and retail) is not restricted for foreign investors within the Vietnam legal framework, unless the traded goods are specified on the list of prohibited or restricted for trading, or are subject to specific licenses for trade. These can include the trading of lubricants, rice, sugar, recorded items, books, newspapers and magazines (except for rice, sugar, recorded items, books, newspapers and magazines which are distributed by a company in its retail outlets in forms of supermarkets, mini supermarkets, and convenience stores).
General procedures for foreign investors
- Firstly, before seeking to open a retail outlet, a Vietnamese company must have retail business lines registered as permitted business activities.
- If the Vietnamese company has not been established yet, please ensure to register the retail business lines when registering the company. Please see our publication covering a general overview of the company establishment process.
- If a Vietnamese company has already been established but has not registered the retail business lines, the addition of retail business lines corresponding to its specific retail activities is a must before it can applying for a Trading License as well as Retail Outlet Certificate to operate according to this model.
In summary, the first step for retail outlet establishment is either establishing a company in Vietnam having registered appropriate retail business lines, or adding appropriate retail business lines into an existing company’s business lines.
- Secondly, obtaining a Trading License. Under the law, a Trading License is a must-have license prior to retail operation commencement, regardless whether the company wishes to open a physical retail outlet or only sell online.
- Finally, applying for the Retail Outlet Establishment License.
A typical timeline for establishing foreign-owned retail stores
| M1 | M2 | M3 | M4 | M5 | M6 | M7 | M8 | ||
| Step 1. | Company establishment or adding trading business lines | 1 – 2 months | |||||||
| Step 2. | Obtaining Trading License | From 3 to 4 months | |||||||
| Step 3. | Obtaining Retail Outlet License | From 3 to 4 months | |||||||
Please note that:
- Each outlet will need to have its own separate Retail Outlet Establishment License
- The first Retail Outlet Establishment, along with successive outlets, which are (i) less than 500m2in size, or (ii) located in a shopping mall, and (iii) not classified as a convenience store/mini supermarket can be completed without an Economic Needs Test (“ENT”) process, but other successive outlets will need to complete the ENT process aside from Retail Outlet Establishment process; and
- A domestically owned company having retail outlet(s) in Vietnam upon becoming a foreign invested business entity or considered as foreign investor under Law on Investment, needs to apply for both a Trading License and Retail Outlet Establishment License.
The focus of this article is on the retail outlet registration process which is conducted at the Department of Industry and Trade (DOIT). The assumption is that the company has appropriate retail business lines registered already, and looking at the process of obtaining a Trading License and Retail Outlet Establishment License.
How to obtain a trading license
| Criteria | Description |
| Authority | Department of Industry and Trade
In special cases, DOIT will seek the Ministry of Industry and Trade’s (MOIT) approval before license issuance, for example, retail of rice, sugar, recorded items, books, newspapers and magazines which are distributed by the company in its retail outlets in forms of supermarkets, mini supermarkets or convenience stores. |
| Requirements [1]
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| Required documents [2] |
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| Validity period [3] | Normal case: No specific duration of the trading license by law
Sensitive/restricted cases: 5 years, inclusive of:
|
| Procedure [4] | Step 1: Client’s Role
The Client prepares the application files and submits them directly or online or via post to DOIT Step 2: Statutory Role DOIT reviews the company’s ability to meet the conditions and issues the trading license. In several special cases, DOIT will seek MOIT’s approval before license issuance |
| Estimated timelines | For normal cases: around 3-4 months
For special cases that need Ministerial approval: 3-6 months |
How to obtain a Retail Outlet Establishment License
| Criteria | Descriptions |
| Authority | DOIT and MOIT |
| Requirements [5] | For the first retail outlet and the successive outlets which are (i) less than 500m2in size, (ii) located in a shopping mall and (iii) not classified as a convenience store or mini supermarket, the company is to satisfy the following requirements:
|
For other retail outlets (besides the first outlet and the aforesaid successive retail outlets in section 1), the company is to satisfy additional conditions as follows:
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| Required documents [6] |
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| Validity period [7] | The validity period of a license for establishment of retail outlet is as long as the remaining duration of the certificate of registration for project establishing the retail outlet. Where there is no certificate of registration for investment, the validity period of the license for establishment of the retail outlet is as long as the duration as specified in the retail outlet documentation. |
| Procedure [8] | Step 1: Client’s role
The Client prepares the application files and submits them directly or online or via post to DOIT Step 2: Statutory role DOIT checks the company’s ability to meet the conditions and seeks MOIT opinion before issuing the license. |
| Estimated timeline | From 3-4 months or more subject to DOIT and MOIT’s process |
Please note:
- If the first retail outlet is in the same province with the headquarters, the Company is entitled to apply for both the trading license and retail outlet license; and
- The company is to report to the authority annually on the sale of goods and other related activities before 31 January.[9]
- [1] Article 9.1 and 2, Decree No. 09
- [2] Article 12, Decree No.09
- [3] Article 11.3, Decree No.09
- [4] Article 13, Decree No. 09
- [5] Article 22 Decree No. 09
- [6] Article 27, Decree No.09
- [7] Article 26.2, Decree No.09
- [8] Article 28, Decree No. 09
- [9] Article 40 Decree No. 09
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