Business license and retail store license for foreign own copany in Vietnam

Business license and retail store license for foreign own copany in Vietnam

I. Business license of foreign own copany in Vietnam.

1. The cases requires issuance of business license to a foreign own copany in Vietnam:

A business license shall be granted to a foreign own company in Vietnam to carry out the following activities:
a) Exercise the goods retail distribution right (excluding rice; sugar, articles with recorded images; and books, newspapers and
magazines)
b) Exercise the import right and the goods wholesale distribution right being oil and lubricants, consideration shall be given to licensing exercise of the right to import and right of wholesale distribution to an economic organization with FOC which conducts one of the following activities:
- Produces oil and lubricants in Vietnam
- Produces or is permitted to distribute in Vietnam machinery, equipment and goods using special type oil and lubricants
c) Exercise the goods retail distribution right being rice; sugar, articles with recorded images; and books, newspapers and magazines, consideration shall be given to licensing to exercise the retail distribution right to an economic organization with FOC which already has a retail store in the form of a supermarket, mini-supermarket or convenience store in order to conduct retail at such store.
d) Provide logistics services excluding logistic services sub-sectors for which Vietnam has committed to open the market in international treaties of which Vietnam is a member.
dd) Goods leasing excluding financial leasing; except for the leasing of construction equipment which includes operators
e) Provide trade promotion services excluding advertising services;
g) Provide trade intermediation services;
h) Provide e-commerce services
i) Provide services of arranging tendering/bidding for goods and services

2 Conditions for issuance of business license to foreign own company:

2.1. If the foreign investor belongs to a country or territory which is a member of an international treaty of which Vietnam is also a member and which commits to open the market for goods trading and directly related activities [then the following conditions must be satisfied]:
a) The conditions on market access in the international treaty of which Vietnam is a member;
b) Having a financial plan in order to undertake the activities for which a business licence is requested;
c) Not having overdue tax debts if it has been established in Vietnam for one year or more.
2.2. If the foreign investor does not belong to a country or territory which is a member of an international treaty of which Vietnam is also a member [then the following conditions must be satisfied]:
a) The conditions prescribed in sub-clauses (b) and (c) of clause 2.1 above;
b) Satisfying the following criteria:
- Consistency with the provisions of specialized branch law;
- Compatibility with the competitive level of domestic enterprises in the same operational sector;
- Ability to create jobs for domestic workers;
- Ability to contribute and level of contribution to the State budget
2.3. If there is not yet a commitment to open the market for business services in international treaties of which Vietnam is a member, then the conditions prescribed in clause 2.2 above apply.
2.4. If there is not yet a commitment to open the market for business in the following goods in international treaties of which Vietnam is a member, namely: oil and lubricants; rice; sugar, articles with recorded images; and books, newspapers and magazines:
a) The conditions prescribed in clause 2.2 above;
b) In the case of goods being oil and lubricants, consideration shall be given to licensing exercise of the right to import and right of wholesale distribution to an economic organization with FOC which conducts one of the following activities:
- Produces oil and lubricants in Vietnam;
- Produces or is permitted to distribute in Vietnam machinery, equipment and goods using special type oil and lubricants.
c) In the case of goods being rice; sugar, articles with recorded images; and books, newspapers and magazines, consideration shall be given to licensing to exercise the retail distribution right to an economic organization with FOC which already has a retail store in the form of a supermarket,
mini-supermarket or convenience store in order to conduct retail at such store.

3. Term of business license for foreign-own company

a) The business term in the cases prescribed in clauses 2, 3 and 4 of article 9 of this Decree is five (5) years;
b) The term of a reissued business [licence] shall equal the residual term of the issued business licence.

4. Application files for issuenace of business license to foreign own company.

Application filese include:
4.1. An application for a business license in standard Form.
4.2. Explanatory document containing:
a) Explanation on the conditions for issuance of the corresponding business licence in accordance with Clause 2 above;
b) Business plan: description of the contents and method of conducting the business activities; presentation of the business plan and market development; the labour demand; and an assessment of the impact and socio-economic efficiency of the business plan;
c) Financial plan: business operational results on the basis of the audited financial statements for the most recent year if the applicant has been established in Vietnam for one year or more; and an explanation of capital, capital sources and methods for mobilizing capital, enclosing financial data;
d) Current business status of goods trading and directly related activities; financial status of the economic organization with FOC up until the time of the request for the business licence in the case of a business license for an company with a retail establishment in Vietnam, after receive contributed capital to become foreign own company and foreign own company holding 51% or more of charter capital.
4.3. Data from the tax office proving that there are no overdue tax debts.
4.4. Copies of the enterprise registration certificate [ERC] and of the investment registration certificate [IRC] (if any) for the project of goods trading and directly related activities.

5. Procedures for issuance of of business license to foreign own company:

5.1. An application file shall be lodged directly with or sent in the post or sent via the internet (if adequate conditions apply for the latter) to the licensing agency being the Department of Industry and Trade.
5.2. Number of sets of a file:
- One set in the case of a business licence to undertake the activity [retail distribution] prescribed in Clause 1.a of Section I above.
- Two sets in the case of a business licence to undertake the activities prescribed in sub-clauses (b), (d), (dd), (e), (g), (h) or (i) of Clause 1 of Section I above;
- Three sets in the case of a business licence to undertake the activity prescribed in clause (c) of Clause 1 of Section I above.

5.3. Application processing time limit:
- The licensing agency shall, within three (3) business days after receipt of an application file, check the file and request amendment if the file is incomplete or invalid.
- The licensing agency shall, within ten (10) business days after receipt of a complete and valid application file, check compliance with the relevant conditions prescribed in Clause 2 of Section I above to issue Business license or provide a refuse written letter setting out the reasons.
- In case the licensing agency shall send the file requesting an opinion from MOIT and the line ministry in accordance with the provisions in the cases specified at Points c, b, d, dd, e, g, h and i, Clause 1, Section I above, processing time is added 18 days.

II Retail Store License of foreign own company.

1. General provisions on retail store:

1.1. Retailing means the activity of selling goods to individuals, family households and other organizations for use for consumption purposes.
1.2. Retail sales outlet [retail store] means a location [or site] for conducting retailing activities
1.3. Retail store other than the first such store means a retail store established in Vietnam by one of the xforeign investors/economic organizations with FOC which already have a retail store in Vietnam, or established with the same name and trade mark of at least one retail store which an economic organization with FOC already has in Vietnam.
1.4.  A retail store licence shall be issued to an foreing own company in order to establish such store.
1.5. An foreign own company has the right to request issuance of a retail store licence after it has a business licence and retail store location data.
1.6. If the location of the first retail store is in the same province or city under central authority as the headquarters of the foreing own company, then such foreign own company has the right to request issuance of a business licence concurrently with
issuance of the first retail store licence. The application file and sequence shall be
implemented in accordance with the provisions in article 20 of Decree No.09/2018-ND-CP

2. Conditions for establishment of retail store of foreign own company:

2.1. Conditions for establishment of the first retail store of foreign own company
a) Having a financial plan in order to establish the retail store;
b) Not having any overdue tax debts if the applicant has been established in Vietnam for one (1) or more years;
c) The location for establishing the retail store complies with the relevant planning in the geographical market area.
2.2. Conditions for setting up a retail establishment other than the first retail store of a foreign own company.
a) In a case where it is not necessary to conduct an economic needs test [ENT]: it must satisfy the conditions prescribed in clause 1 above.
b) In a case where it is necessary to conduct an ENT:
- It must satisfy the conditions prescribed in clause 1 above;
- It must satisfy the ENT criteria prescribed in Clause 2.2 of Section 3 below.

3. Economic Needs Test (ENT)

3.1. In case ENT must be performed:
An ENT must be conducted on establishment of a second or further retail store, except where the
proposed store has an area less than 500 m2 and is located in a trade centre and it is not a
convenience store or mini-supermarket.
3.2. Economic need test criteria
a) Whether the size of the geographical market area would be affected if the retail store operates;
b) The number of retail stores currently operating in the geographical market area;
c) Impact of the [proposed] retail store on market stability and business operations of retail stores and traditional markets in the geographical market area;
d) Impact of the [proposed] retail store on traffic density, environmental sanitation and fire prevention in the geographical market area;
dd) Ability of the [proposed] retail store to contribute to socio-economic development of the geographical market area, specifically:
- Job creation for domestic workers;
- Contribution to the development and modernization of the retail sector in the geographical market
area;
- Improvement of the environment and living conditions of the population in the geographical market
area;
- Ability to contribute and level of contribution to the State budget.

4. Economic Needs Test Committee (ENTC)

4.1. The provincial people”s committee in the locality of the [proposed] retail store shall establish an ENT Committee on the proposal of the licensing agency.
4. 2. An ENT Committee shall comprise a representative of the provincial people”s committee or of the agency delegated by the provincial people”s committee who shall act as chairman, and other members comprising representatives of the DOIT, of the Department of Planning and Investment and of other relevant committees, industries and organizations. If a retail store is proposed to be established within the locality of a ward, commune or township adjacent to another central province or city, then the ENT Committee must also have a representative of the provincial people”s committee of such adjacent central province or city
4.3. The ENT Committee must, after evaluating the criteria prescribed in Clause 3.2 of Section 3 above, clarify the suitability on non-suitability of the location for establishing the retail store in order for the chairman of the ENT Committee to provide a written conclusion and proposal on permitting or not permitting establishment of such retail store.

5. Term of the retail store license of a foreign own company.

a) The term of a licence to establish a retail store shall correspond to the residual term of the IRC for the project to establish such store. If there is no IRC, then the term of the licence shall correspond to the term recorded in the retail store location data.
b) The term of a reissued retail store licence shall equal the residual term of the initially issued licence;
c) The term of a retail store licence may be extended in accordance with the provision in sub-clause (a) above.

6. Application files for issuance of a retail store license of a foreign own companye

6.1. An application form for a retail store license in standard Form.
6.2. Explanatory document containing:
a) Location for establishing the retail store: address of the store; description of the general area, related areas and areas to be used for establishing the store; and an explanation on satisfaction of the conditions prescribed in point (c) of Clause 2.1 above, enclosing the retail store location data;
b) Business plan on trading by the retail store: presentation of the business plan and market development; the labour demand; and an assessment of the impact and socio-economic efficiency of the business plan;
c) Financial plan for establishment of the retail store: business operational results on the basis of the audited financial statements for the most recent year if the applicant has been established in Vietnam for one (1) year or more; and an explanation of capital, capital sources and methods for mobilizing
capital, enclosing financial data;
6.3. Data from the tax office proving that there are no overdue tax debts
6.4. Copies of the ERC and of the IRC (if any) for the project on establishing the retail store, and of the business licence.
6.5.  Document explaining satisfaction of the ENT criteria prescribed in sub-clauses (c), (d) and (dd)
Two (2) sets of an application file shall be lodged directly with or sent in the post or sent via the
internet (if adequate conditions apply for the latter) to the licensing agency being the Department of Industry and Trade.

7. Time limit for issuance the first retail store License, the further retail stores if it is not required to carry out an ENT

7. 1. The licensing agency shall, within three (3) business days after receipt of an application file, check the file and request amendments if the file is incomplete or invalid.
7.2. The licensing agency shall, within ten (10) business days after receipt of a complete and valid application file, check compliance with the conditions prescribed in Clause 2.1 above:
a) If the conditions are not satisfied, the licensing agency shall provide a written response setting out the reasons.
b) If the conditions are satisfied, the licensing agency shall send the file requesting an opinion from MOIT, then issue retail store license or or refuse in written letter with the reason within 10 working days.

8. Time limit for issuance of further retail stores license if it is necessary to conduct ENT.

8.1 The licensing agency shall, within three (3) business days after receipt of an application file, check the file and request amendments if the file is incomplete or invalid
8.2 The licensing agency shall, within five (5) business days after receipt of a complete and valid application file, check compliance with the conditions prescribed in Clause 2.1 above:
a) If the conditions are not satisfied, the licensing agency shall provide a written response setting out the reasons.
b) If the conditions are satisfied, the licensing agency shall propose establishment of an ENT committee [ENTC] in accordance with clauses 4.1 and 4.2 above, send a written request to MOIT for its opinions to issue retail store license or refuse by written letter with reasons within the next 53 working days.

Source: DECREE NO.09/2028/ND-CP of Vietnamese Government on regulations on the commercial law and the law on management of foeign trade regarding goods trading and directly related activities [distribution] by foreign investors and economic organizations with foreign invested capital in Vietnam.

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