VI Vietnam’s retail market is one of the potential and attractive markets for foreign investors. Currently, there are many large investors from Japan, Korea, Thailand, etc. entering the Vietnamese market. Vietnamese law has specific regulations governing the establishment of retail establishments by foreign investors. Economic organizations with foreign investment capital that want to establish retail establishments in Vietnam need to be granted a License to establish retail establishments. Let’s learn about the regulations on this procedure.
Conditions for being granted a retail license by a foreign-invested company:
1. For setting up the first retail facility:
– Economic organizations have financial plans to set up retail establishments;
– No overdue tax debt in case it has been established in Vietnam for 1 year or more;
– The location of the retail establishment is consistent with the relevant planning in the geographical market area.
2. For the establishment of retail establishments other than the first retail establishment:
Except for the case where the retail establishment other than the first retail establishment has an area of less than 500m2 and is located separately in a shopping center and is not a convenience store or mini supermarket. In the remaining cases, economic organizations with foreign capital when establishing retail establishments in addition to the first retail establishment must perform an economic needs test (ENT).
• In case there is no need to test economic needs: Retail establishments other than the first retail establishment meet the same conditions as the first retail establishment.
• In case it is necessary to check economic needs: In addition to the conditions like the first retail establishment, when establishing additional retail establishments, it is necessary to meet the criteria when performing an economic needs test such as:
– The size of the geographical market area affected when the retail establishment operates;
– Number of retail establishments operating in the area;
– The impact of retail establishments on the development and stability of the market and business activities of traditional markets and other retail establishments in the region;
– Impact of retail establishments on traffic density, environmental sanitation, and fire prevention in the area;
– Ability to contribute to the socio-economic development of retail establishments.
Application for a License to establish a retail establishment of a foreign-invested enterprise
– Application for a License to establish a retail establishment (according to form);
– Explanatory statement;
– Documents from the tax authority proving no overdue tax debt.
– Copy: Business registration certificate; Investment registration certificate for retail establishment project (if any); Business license.
– Explanation of ENT criteria (for some prescribed criteria) in case ENT must be performed.
Receiving agency: Department of Industry and Trade where the foreign-invested economic organization is headquartered.
Procedures for granting licenses to establish retail establishments for foreign-invested enterprises
Case 1: Granting a License to establish the first retail establishment and retail establishments other than the first retail establishment are not required to carry out economic needs test procedures.
Investors send documents to the Department of Industry and Trade where the foreign-invested economic organization is headquartered.
If the application meets the conditions, the competent authority will send the application to get opinions from the Ministry of Industry and Trade. If the Ministry of Industry and Trade approves, the competent authority will issue a retail license to the investor.
Case 2: Granting an establishment license to a retail establishment in addition to the first retail establishment must carry out procedures for checking economic needs.
Investors send documents to the Department of Industry and Trade where the foreign-invested economic organization is headquartered.
If the application meets the conditions, the competent authority proposes to establish an Economic Needs Examination Council (ENT).
After the conclusion and proposal for licensing by the Chairman of the ENT Council, the Department of Industry and Trade sends the dossier to get opinions from the Ministry of Industry and Trade. If the Ministry of Industry and Trade approves, the competent authority will issue the retail license. for investors.
Thus, through the article on Pham Consult, the procedure for extending capital contribution time for foreign investors has been clarified. Customers who want further advice or support in implementing this service, please contact Pham Consult.
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