PROCESS FOR OBTAINING TRADING LICENSE (RETAIL – FDI)

After establishing a foreign-invested enterprise in Vietnam, foreign investors must continue carrying out procedures for obtaining Business Licenses for specific sectors and activities such as retail, distribution, and e-commerce in order to operate in compliance with Vietnamese law. This is a highly specialized procedure involving market access conditions, financial capacity, and Economic Needs Test (ENT) requirements. Therefore, understanding the process and required documents will help enterprises save time and minimize legal risks during operation. The article below provides detailed information on the 04 steps in the process of obtaining a Retail Business License for FDI enterprises.

Basic Concepts

A Business License is understood as a legal document issued by a competent state authority permitting an individual or organization to conduct business activities in a specific sector or industry in accordance with the law. This license confirms that the enterprise has satisfied the necessary legal conditions and is permitted to carry out business activities in compliance with legal regulations.

Based on the above concept, Business License for Retail Activities is a legal document issued by a competent authority to a foreign-invested company, allowing it to conduct retail distribution activities in the Vietnamese market, including the following two types:

• • • • Retail Business License (allowing retail business activities);
      • Retail Outlet License.

Process for Obtaining a Retail Business License

Assessing Licensing Conditions and Business Scope

First, information must be collected from the client to assess the licensing conditions and operational scope of the enterprise. At this stage, the key tasks include:

• • • • Reviewing business sectors;
      • Reviewing the list of goods intended for distribution;
      • Reviewing market access conditions applicable to foreign investors;
      • Determining whether the enterprise is subject to the Economic Needs Test (ENT).

For example, foreign-invested companies must satisfy the conditions for obtaining a Retail Business License as specifically regulated under Article 9 of Decree No. 09/2018/ND-CP. In addition, investors must fall within the cases eligible to obtain a Retail Business License to conduct the following activities:

• • • • Implementing general retail distribution rights;
      • Implementing import rights and distribution rights for oils and lubricants;
      • Implementing retail distribution rights for goods such as rice, sugar, recorded media products, books, newspapers, and magazines for foreign-invested economic organizations already operating retail outlets in the form of supermarkets, mini supermarkets, or convenience stores.

Based on the collected information, the feasibility of the application dossier can be evaluated and the most suitable and optimized plan can be developed for foreign investors.

Preparing the Business Plan and Completing Legal Documents

After determining the licensing conditions and specific characteristics of the business sector, the enterprise will proceed with preparing the business plan and completing the necessary legal documents. At this stage, an application dossier for a Trading License must be prepared in accordance with Article 12 of Decree No. 09/2018/ND-CP, including:

• • • • Application for issuance of a Retail Business License according to Form No. 01 attached to the Decree;
      • Explanatory statement;
      • Documents from the tax authority confirming there is no overdue tax debt;
      • Copies of the Enterprise Registration Certificate (ERC) and Investment Registration Certificate (IRC).

In particular, the explanatory statement must clearly present the business plan, financial capacity, distribution system, and impact on the market. The competent authority will rely on this statement to assess the feasibility, suitability, and effectiveness of the investment project.

In addition, the enterprise must prepare all necessary legal documents such as financial documents, lease agreements for retail premises, and other supporting documents required by the licensing authority to ensure that the appraisal and licensing process proceeds smoothly.

Submitting the Application and Working with Competent Authorities

After completing the dossier, the next stage submitting the application and working with competent authorities. The consulting firm will represent the enterprise in submitting the application for a Retail Business License to the Department of Industry and Trade, or in certain special cases, to the Ministry of Industry and Trade.

For example, certain retail distribution activities involving goods that are not fully open to foreign investors under Vietnam’s market access commitments, or distribution of specific goods such as oils and lubricants, rice, sugar, recorded media products, books, newspapers, and magazines, fall under the authority of the Ministry of Industry and Trade.

At the same time, the consulting firm will monitor the entire appraisal process, directly work with state authorities, and assist in providing explanations or additional documents when required in order to ensure that the licensing process proceeds smoothly, on schedule, and with minimal legal risks.

Receiving the Trading License and Completing Operational Conditions

The next stage involves receiving the Trading License and completing operational conditions. After obtaining the Trading License for retail and distribution activities from the competent authority, the enterprise must continue completing the necessary conditions to officially commence business operations.

During this stage, the consulting firm will assist the enterprise in reviewing and implementing procedures relating to retail locations, distribution systems, invoices and supporting documents, as well as compliance requirements applicable to commercial activities. This ensures that the enterprise operates in accordance with Vietnamese law, remains stable from the initial stage, and establishes a solid foundation for expanding its distribution system in the future.

Expanding the Retail System

After the enterprise has operated stably, if the foreign investor wishes to expand its retail system, the consulting firm will continue assisting with procedures for obtaining a Retail Outlet Establishment License for each business location.

In cases involving the establishment of retail outlets, the competent authority may conduct an ENT assessment, which refers to the Economic Needs Test applicable to foreign-invested economic organizations establishing a second or subsequent retail outlet in Vietnam.

For example, under Clause 1 Article 23 of Decree No. 09/2018/ND-CP, retail outlets other than the first retail outlet are exempt from the ENT requirement if the outlet has an area of less than 500m², is established within a commercial center, and is not categorized as a convenience store or mini supermarket. Based on these legal regulations, enterprises should develop the most appropriate expansion strategy.

To receive legal consultation regarding the Process for obtaining Trading License (Retail – FDI, you may contact BKCLAW through the following information:

Phone: 0909 073 692

Email: info@bkclaw.vn

District 1 Office: 9th Floor, Diamond Plaza Building, 34 Le Duan Street, Sai Gon Ward, Ho Chi Minh City

Binh Tan Office: 41 Ten Lua Street, An Lac Ward, Ho Chi Minh City