REQUIRED LICENSES FOR FOREIGN-INVESTED ECONOMIC ORGANIZATIONS CONDUCTING RETAIL ACTIVITIES IN VIETNAM

The retail sector has always been an attractive field for foreign investors, contributing significantly to foreign direct investment (FDI) inflows into Vietnam. Accordingly, in order to conduct retail distribution activities in the Vietnamese market, in addition to establishing an economic organization, investors must satisfy the conditions for obtaining a Business License and a Retail Outlet Establishment License.

In this article, CELIGAL provides information on the conditions for obtaining a Business License and the conditions for establishing retail outlets in accordance with current Vietnamese law.

1. What Is Retail?

Pursuant to Clause 7, Article 3 of Decree No. 09/2018/NĐ-CP dated 15 January 2018, detailing the Law on Commerce and the Law on Foreign Trade Management regarding goods trading and activities directly related to goods trading by foreign investors and foreign-invested economic organizations in Vietnam (“Decree 09”), retail is defined as follows:

“7. Retail means the activity of selling goods to individuals, households, or other organizations for consumption purposes.”

Accordingly, retail refers to the sale of goods to individuals, households, and other organizations for consumption purposes. Currently, Vietnamese law adopts a negative definition approach when interpreting the term “consumption purpose” under Article 3.1 of the Law on Protection of Consumers’ Rights 2023 (effective from 1 July 2024). As a result, consumption is understood as an activity not conducted for commercial purposes.

2. Licenses Required to Conduct Retail Distribution Activities in Vietnam

To exercise the right to retail distribution of goods in Vietnam, pursuant to Article 5 of Decree 09, a foreign-invested economic organization (“Foreign-Invested Enterprise” or “FIE”) must be granted:

• a Business License; and

• a Retail Outlet Establishment License.

3. Conditions for Granting a Business License

Under Article 9 of Decree 09, the granting of a Business License to an FIE conducting retail activities in Vietnam is divided into two cases:

Case 1: Foreign investors from countries or territories that are parties to international treaties to which Vietnam is a member and that include market access commitments for goods trading and related activities

In this case, the FIE must:

• Satisfy the market access conditions under the relevant international treaty to which Vietnam is a party;

• Have a financial plan for carrying out the activities proposed in the application for the Business License;

• Have no outstanding tax arrears if the enterprise has been established in Vietnam for one year or more.

Case 2: Foreign investors from countries or territories that are not parties to international treaties to which Vietnam is a member

In this case, the FIE must:

• Satisfy the same three conditions applicable in Case 1; and

• Additionally meet the following criteria: