Conditions for the issuance of a license for the establishment of retail outlet for foreign-invested companies

1. Conditions for the issuance of a Retail Business Registration License for foreign-invested companies.

Pursuant to Article 9 Decree 09/2018/ND-CP, the conditions for foreign-invested companies to be issued a Retail Business Registration License are:

a) If foreign investors are from a country or territory which has acceded to a treaty to which Vietnam is a signatory and under which Vietnam has committed to open its market for sale of goods and other related activities:

• Meet market access conditions prescribed in international treaties to which Vietnam is a signatory.

• Acquire a financial plan deemed qualified to apply for a business license.

• Incur no overdue tax in a case where it has been established in Vietnam for at least 1 year.

b) If foreign investors are not from a country or territory which has acceded to a treaty to which Vietnam is a signatory:

• Have a financial plan to carry out the activities requested for a business license.

• No more overdue tax debt in case it has been established in Vietnam for 01 year or more.

• Comply with specialized laws.

• Matching the level of competition of domestic enterprises in the same field of operation.

• Ability to create jobs for domestic workers.

• Ability and level of contribution to the state budget.

c) In case of rice; sugar; recorded items; books, newspapers and magazines:

Consider issuing retail distribution rights to a foreign-invested business entity having retail outlets in forms of supermarkets, mini supermarkets, convenience stores to sell above goods.

2. Conditions for the issuance of License for the establishment of retail outlet for foreign-invested companies

Pursuant to Article 5.2 Decree 09/2018/ND-CP, foreign-invested companies that want to establish a retail outlet must meet the conditions in order to be issued a License for the establishment of a retail outlet. 

Accordingly, Article 22 Decree 09/2018/ND-CP provides the conditions for a License for the establishment of retail outlet for foreign-invested companies:

a) Regarding the establishment of the first retail outlet:

• Acquire a financial plan for setting up retail outlet;

• Incur no overdue tax in a case where it has been established in Vietnam for at least 1 year;

• The location where the retail outlet is set up is conformable with the relevant planning in the relevant geographic market.

b) Regarding the establishment of retail outlet other than the first retail outlet:

According to the law, when establishing a retail outlet other than the first one, investors must carry out an economic needs test (ENT), unless the retail outlet is less than 500m2 in size, located in a shopping mall and not classified as a convenience store or mini supermarket. Thus, depending on the case, investors need to meet different conditions to be granted a l License for the establishment of retail outlet:

In case ENT is not required: Satisfy the conditions corresponding to the conditions for the establishment of the first retail outlet.

In case ENT is required:

Satisfy the conditions corresponding to the conditions for the establishment of the first retail outlet and the conditions for ENT criteria:

• The scale of relevant geographic markets being affected by to-be-retail outlets.

• The number of existing retail outlets in the relevant geographic market.

• Impact of the retail outlet on the market stability and operating activities of other retail outlets and traditional markets in the relevant geographic market.

• Impact of retail outlets on traffic density, environment hygiene, fire safety in the relevant geographic market.

• Potential contribution of the retail outlet to the socio-economic development of the relevant geographic market.

• Potential contribution to the development and modernization of the retailing sector in the relevant geographic market.

• Impact of retail outlets on traffic density, environmental sanitation, fire prevention and fighting in the geographical market area.

• The ability of retail outlets to contribute to the socio-economic development of the geographical market area.

3. Legal basis

• Law on Commerce 2005

• Decree 09/2018/ND-CP dated January 15, 2018 on guidelines for the law on commerce and the law on foreign trade management regarding sale of goods and other activities directly related to sale of goods of foreign investors and foreign-invested business entities in Vietnam.