VI The entry of international investors into the Vietnamese market is not limited to establishing a legal entity but also involves complying with complex specialized conditions, especially for businesses engaged in wholesale and retail distribution. According to Vietnamese law, possessing a Business License is a mandatory and prerequisite requirement for foreign-invested enterprises (FDI) to legally operate in specific commercial sectors. This process requires absolute precision, from meeting the conditions regarding investor nationality and financial capacity to providing thorough explanations to specialized management agencies regarding business plans and economic contributions. To give your business a comprehensive overview of the legal process from document preparation to receiving the final result, let’s explore the regulations on conditions, procedures, and steps for applying for a Business License with Pham Consult.
- Cases Requiring a Business License
According to Clause 1, Article 5 of Decree 09/2018/ND-CP, a Business License is granted to economic organizations with foreign investment capital to carry out the following activities:
– Exercising the right to retail distribution of goods, excluding goods specified in point c, Clause 4, Article 9 of Decree 09/2018/ND-CP;
– Exercising the right to import and wholesale distribution of goods as stipulated in point b, clause 4, Article 9 of Decree 09/2018/ND-CP;
– Exercising the right to retail distribution of goods as stipulated in point c, clause 4, Article 9 of Decree 09/2018/ND-CP;
– Providing logistics services; excluding logistics service sub-sectors for which Vietnam has committed to market opening in international treaties to which Vietnam is a member;
– Leasing of goods, excluding financial leasing; excluding leasing of construction equipment with operators;
– Providing trade promotion services, excluding advertising services;
– Providing trade intermediary services;
– Providing e-commerce services;
– Providing services for organizing bidding for goods and services.
- Cases Not Requiring a Business License
Article 6 of Decree 09/2018/ND-CP stipulates the following cases where a business license is not required:
– In addition to activities requiring a business license as stipulated in Clause 1, Article 5 of Decree 09/2018/ND-CP, economic organizations with foreign investment capital and economic organizations falling under the cases specified in points b and c, Clause 1, Article 23 of the Investment Law are entitled to conduct the buying and selling of goods and activities directly related to the buying and selling of goods as stipulated in Clause 1, Article 3 of Decree 09/2018/ND-CP after registering such activities in relevant documents as prescribed by the Investment Law and the Enterprise Law.
– In cases where foreign investors are not from countries or territories participating in international treaties to which Vietnam is a member with commitments to open markets, and register to conduct goods trading activities and activities directly related to goods trading as stipulated in Clause 1, Article 6 of Decree 09/2018/ND-CP, the competent state agency shall consult with the Ministry of Industry and Trade before granting or amending the registration for such activities in relevant documents as prescribed by the Investment Law and the Enterprise Law.
III. Conditions for Granting Business Licenses
- In cases where foreign investors are from countries or territories participating in international treaties to which Vietnam is a member with commitments to open markets for goods trading activities and activities directly related to goods trading:
– Meeting the market access conditions in the international treaty to which Vietnam is a member;
– Having a financial plan to carry out the activities for which a business license is requested;
– No outstanding tax debts if established in Vietnam for one year or more.
- For foreign investors not from countries or territories participating in international treaties to which Vietnam is a member:
– Have a financial plan to carry out the activities for which a business license is requested;
– No outstanding tax debts if established in Vietnam for one year or more.
– Meet the following criteria:
+ Compliant with specialized legal regulations;
+ Compliant with the level of competitiveness of domestic enterprises in the same field of activity;
+ Ability to create jobs for domestic workers;
+ Ability and level of contribution to the state budget.
- For business services not yet committed to market opening in international treaties to which Vietnam is a member:
– Have a financial plan to carry out the activities for which a business license is requested;
– No outstanding tax debts if established in Vietnam for one year or more.
– Meeting the following criteria:
+ Compliance with specialized laws and regulations;
+ Compatibility with the level of domestic competition in the same field of activity;
+ Ability to create jobs for domestic workers;
+ Ability and level of contribution to the state budget.
- In cases where the goods being traded are not yet subject to market opening commitments in international treaties to which Vietnam is a signatory: Lubricants; rice; sugar; recorded items; books, newspapers, and magazines
– Having a financial plan to carry out the activities for which a business license is requested;
– No outstanding tax debts if the business has been established in Vietnam for one year or more;
– Meeting the following criteria:
+ Compliant with specialized legal regulations;
+ Consistent with the level of competitiveness of domestic enterprises in the same field of activity;
+ Ability to create jobs for domestic workers;
+ Ability and level of contribution to the state budget.
– For lubricants: Consider granting import and wholesale distribution rights to foreign-invested economic organizations that carry out one of the following activities:
+ Production of lubricants in Vietnam;
+ Manufacturing or authorized distribution in Vietnam of machinery, equipment, and goods using specialized types of lubricating oil and grease.
+ For goods such as rice; sugar; recorded items; books, newspapers, and magazines: Consider granting retail distribution rights to foreign-invested economic organizations that already have retail outlets in the form of supermarkets, mini-supermarkets, and convenience stores to sell at those outlets.
- Business License Application Dossier
According to Article 12 of Decree 09/2018/ND-CP, the application dossier for a business license includes:
(i) Application for a business license.
(ii) Explanation containing:
– Explanation of the conditions for granting the corresponding business license as stipulated in Article 9 of Decree 09/2018/ND-CP;
– Business plan: Description of the content and methods of conducting business activities; presentation of the business plan and market development; – Labor demand; assessment of the economic and social impact and effectiveness of the business plan;
– Financial plan: Report on business performance based on audited financial statements of the most recent year in case the company has been established in Vietnam for one year or more; explanation of capital, sources of capital and capital mobilization plan; accompanied by financial documents;
– Business situation of goods trading and activities directly related to goods trading; financial situation of the foreign-invested economic organization up to the time of application for a business license, in the case of granting a business license as stipulated in Clause 6, Article 5 of Decree 09/2018/ND-CP.
(iii) Documents from the tax authority proving no overdue tax debts.
(iv) Copy of: Business registration certificate; Investment registration certificate for projects involving the trading of goods and activities directly related to the trading of goods (if any).
- Procedures for requesting a Business License
Documents can be submitted directly, by post, or electronically (if applicable) to the Licensing Authority. The number of documents is as follows:
– For business licenses issued for activities specified in point a, clause 1, Article 5 of Decree 09/2018/ND-CP: 1 set;
– For business licenses issued for activities specified in points b, d, e, g, h, and i, clause 1, Article 5 of Decree 09/2018/ND-CP: 2 sets;
– For business licenses issued for activities specified in point c, clause 1, Article 5 of Decree 09/2018/ND-CP: 3 sets.
Within 3 working days from the date of receiving the application, the Licensing Authority shall review the application and request amendments or additions if the application is incomplete or invalid.
Within 10 working days from the date of receiving a complete and valid application, the Licensing Authority shall verify that the corresponding conditions are met:
– If the conditions are not met, the Licensing Authority shall issue a written response stating the reasons;
– If the conditions are met: The Licensing Authority shall issue a business license to carry out the activities specified in point a, clause 1, Article 5 of Decree 09/2018/ND-CP; in case of refusal to grant the license, a written response stating the reasons must be provided;
– The Licensing Authority shall send the application along with a written request for opinions to the Ministry of Industry and Trade and the relevant sectoral management ministry as stipulated in point a or b, clause 3, Article 8 of Decree 09/2018/ND-CP. Within 15 days of receiving the application, the Ministry of Industry and Trade and the relevant ministries shall, based on the provisions of Article 10 of Decree 09/2018/ND-CP, issue a written approval for the business license; in case of refusal, a written response stating the reasons must be provided.
Within 3 working days of receiving the written approval from the Ministry of Industry and Trade and the relevant ministries, the Licensing Authority shall issue the business license. In case the Ministry of Industry and Trade or the relevant ministry issues a written refusal, the Licensing Authority shall provide a written response stating the reasons.
