Retail Outlet License in Vietnam for Foreign Investors

Establishing a retail outlet in Vietnam is not a simple process for foreign investors. It requires compliance with a range of legal regulations under the Law on Investment, the Law on Commerce, and Vietnam’s international commitments such as AFTA, CPTPP, and EVFTA. In particular, obtaining a Retail Outlet License is a mandatory procedure and may pose significant challenges for investors unfamiliar with Vietnamese law.

Legal Basis for the Retail Outlet License

The procedure for applying for a Retail Outlet License in Vietnam is governed by the following legal documents:

• Law on Investment 2020: Governs regulations on foreign direct investment in Vietnam.
• Law on Commerce 2005: Regulates commercial activities, including retail operations by foreign investors in Vietnam.
• Decree No. 09/2018/ND-CP: Provides detailed procedures for licensing retail outlets.
• Circular No. 34/2013/TT-BCT: Details the implementation of Vietnam’s WTO commitments on retail trade.
• CPTPP and EVFTA: Outline Vietnam’s commitments to opening its retail market to foreign investors.

One of the biggest challenges for investors is the Economic Needs Test (ENT) requirement for the second and subsequent retail outlets. This requirement can present difficulties for investors looking to expand their retail network in Vietnam.

Conditions for Issuing a Retail Outlet License in Vietnam

The licensing conditions vary depending on whether it is the first or a subsequent retail outlet.

For the first retail outlet:

• No ENT requirement.
• A clear and feasible business plan that proves the outlet will bring economic benefits to Vietnam.
• The retail location must comply with local commercial zoning and land-use regulations.
• Financial capability must be demonstrated through financial statements or equivalent documents.
• Compliance with labor and social insurance regulations, including social and health insurance for employees.

For the second and subsequent outlets:

• ENT is required.
  Factors considered include:
  • Population density in the proposed area
  • Market competition and presence of other retail outlets
  • Reasonableness and sustainability of the investor’s expansion plan
  • Potential impacts on the local economy and market balance

Required Documents for a Retail Outlet License

Foreign investors must prepare and submit the following documents:

• Completed application form (in the prescribed format)
• Investment Registration Certificate and Enterprise Registration Certificate
• Audited financial statements from the last three years
• Detailed business plan, including market strategy, product range, distribution channels, and marketing plans
• Lease agreement or documentation proving ownership of the retail location
• A statement of commitment to comply with all legal regulations regarding retail operations

For the second and subsequent outlets, investors must also include the ENT documentation as required by the authorities.

Legal Risks in the Retail Outlet Licensing Process

Foreign investors may face the following legal risks during the licensing process:

• Failure to meet ENT requirements: This is especially relevant for second and subsequent outlets. An incomplete or unreasonable ENT submission may lead to rejection or delays.
• Errors in legal documentation: Minor mistakes, such as missing lease documents or improperly notarized translations, may require resubmission and lead to delays and additional costs.
• Consular legalization issues: Foreign documents must be consular legalized. Failure to do so will result in the dossier being returned or additional requests being issued.
• Franchising compliance risks: If the investor’s business model involves franchising, a separate Franchise License may be required. Failing to obtain this can lead to legal disputes.
• Location and zoning risks: Even if the investor has secured a location, it may be denied if it does not comply with local planning regulations or infrastructure requirements.

BKC Law’s Licensing Service for Retail Outlets in Vietnam

BKC Law provides comprehensive legal support for foreign investors seeking a Retail Outlet License in Vietnam. Our process ensures efficient, accurate licensing that complies with all legal requirements.

Step 1: Initial consultation and needs assessment

• Client intake: We collect information on the investor’s business and goals.
• Legal advisory: We provide guidance on ENT requirements, local zoning, and financial conditions.
• Location review: We work with the client to assess the feasibility of the chosen retail site.

Step 2: Business plan development and dossier preparation

• Drafting the business plan: We assist in preparing a compelling, legally compliant business plan.
• Preparing the legal dossier, including:
  • Application form
  • Investment and Enterprise Registration Certificates
  • Audited financial statements
  • Lease or ownership documents
  • Other supporting documents as required

Step 3: Economic Needs Test (ENT) (if applicable)

• Conducting the ENT assessment: We evaluate market conditions, population density, competition, and planning guidelines.
• Feasibility analysis: We ensure the expansion plan is viable and does not negatively impact the local market.

Step 4: Filing and licensing follow-up

• Submission: We submit the completed dossier to the Department of Industry and Trade in the relevant province or city.
• Progress tracking: We monitor the review process, respond to requests from authorities, and resolve issues promptly.

Step 5: License issuance and post-licensing support

• License delivery: We notify the client and provide the issued license.
• Ongoing support: We assist with post-licensing procedures such as retail activity registration and compliance with labor, insurance, and tax obligations.

Contact BKC Law

Phone: 0901 3333 41

Email: info@bkclaw.vn

District 1 Office: 9th Floor, Diamond Plaza, 34 Lê Duẩn, District 1, Ho Chi Minh City

Binh Tan Office: 41 Tên Lửa, Binh Tan District, Ho Chi Minh City

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