Legal basis:

• Investment Law 2020;
• Commercial Law 2005;
• The Decree No. 09/2018/NĐ-CP issued 15/01/2018;
• The others statutory law

I. The general overview about the wholesale and retail business of FDI corporation

Viet Nam is known for the “retail massive market” of ASEAN. Due to the practice of over 100 million popularity, the consumption rate increases sharply and the middle-class urgently expands, the distribution-retail market turns into an attractive spot for many international corporations. 

Nevertheless, it is not possible for all FDI companies to constantly register the business and sell directly to the consumers. Conversely with the Viet Nam company, FDI companies shall be granted a Business License according to Decree No. 09/2018/ND-CP to conduct the wholesale and retail business.

This license is the fundamental condition for:

• FDI companies legally launch stores, storages, supermarkets, or commercial centers.
• Allowing them to distribute and circulate to the market, execute the contract with the domestic supplier. 
• Participating directly in the retail market.

If not, FDI companies can be subject to administrative sanction, even operations suspension. 

II. Granting wholesale and retail operation conditions:

This is the most important part that investors need to fully understand before submitting their application.

1. Legal conditions and initial investment procedures

FDI companies must own these certifications:

• Investment Registration Certificate (IRC): investment project in Viet Nam confirmation 
• Business Registration Certificate (ERC): Legal entity confirmation 

2. Condition of business allowed to operate:

According to WTO commitment and FTAs that Vietnam has signed and ratified, the investors are permitted to conduct most of their business in Viet Nam. Nevertheless, several restricted sectors such as rice, sugary production, petroleum, medical products, cigarettes, mass media,… 

This limitation indicates that if FDI companies sell daily products (groceries, fashions, skincare products or cosmetics,…), the procedures for license are relatively straightforward. Conversely, conducting specific business will require complicated and multi-stages procedures which ensures that potential risks can be prevented. 

3. Financial ability condition:

The authority will assess: 

• The charter capital of business
• The finance report audited by the holding company 
• Financial strategy plan for business

For instance, if a massive corporation such as Aeon (Japan) or Lotte (Korea) invests in Viet Nam, they shall prepare the international finance report. With minor companies, the prepared documents can be expanded to include a letter of bank guarantee. 

4. Facilitate and outlets condition:

Companies shall engage in premise lease contract, storage or documents related to location ownership. The rental unit must be appropriate with the local development planning, and adapt to meet the requirements for fire safety, food safety, and environmental sanitation. 

Example: In case FDI companies pursue to open outlets in malls at Ha Noi, outlet rental agreement shall be attached with licensing application documents. 

5. Economic Necessity Test:

This test is concerned by numerous of foreign investors. ENT is applied if: 

• Companies establish a second outlet or more. 

The authority will assess: 

• The community popularity rate
• Local population size and purchasing demand
• Commercial media affect 
• Contribution afford for Socio-economical development 

In other words, if FDI businesses have a demand to expand the outlet chain, they have to process complicated procedures and provide a comprehensive justification. 

III. Procedures for Applying for Wholesale and Retail Business Licenses

The procedure typically involves four steps:

1. Preparation of the application documents:

The documents include multiple types of documents, the most important of which are:

• Application form for a Business License (according to the prescribed template).
• Statement of conditions (business plan, financial plan, management plan).
• Documents proving financial capacity (financial statements, capital verification).
• IRC, ERC.
• Lease agreement for the premises, fire safety certificate (PCCC), food safety certificate (ATTP), if applicable.

2. Submission of the documents:

• Enterprises submit the dossier to the Department of Industry and Trade (DOIT) where the business location is situated.
• In complex cases, the DOIT must seek opinions from the Ministry of Industry and Trade.

3. Appraisal / Evaluation

• The appraisal period usually lasts 15–30 days.
• The competent authority will compare the dossier against regulations and consult relevant agencies.
• If an Economic Needs Test (ENT) is required, the process may take longer.

4. Issuance of the License

• If the document is valid, the DOIT will issue the Business License.
  If rejected, a written explanation stating the reasons must be provided.

IV. Practical Notes

• Processing time: In practice, many applications take 1–2 months due to the need to supplement documents or obtain inter-agency opinions.

• Specialized sectors: For businesses selling alcohol, tobacco, pharmaceuticals, etc., besides the Business License, additional sector-specific permits are required.

• ENT: This is a significant barrier for FDI enterprises aiming to develop a chain. Companies should prepare market reports and detailed business plans to persuade authorities.

• Post-licensing supervision: After obtaining the license, enterprises must report periodically and are subject to inspections by competent authorities. Violations may lead to license revocation.
• Practical experience: Many large corporations hire law firms or local consultants to prepare the dossier. This helps shorten processing time and reduce errors.

V. Conclusion

While the procedure for obtaining a wholesale or retail business license in Vietnam is not overly complicated, there are many details to note, especially for enterprises planning to open a chain of stores.

• Careful preparation of the documents, along with a clear business and financial plan, facilitates the licensing process.
• Missing documents or failure to meet ENT conditions can lead to delays or rejection.
• Clearly define the product lines and scope of business before applying.
• Prepare the full dossier, especially documents proving financial capacity.
• Consider using legal consulting services to save time and costs.

Vietnam’s market is expanding, and consumers increasingly favor international brands. This presents a golden opportunity for FDI enterprises. However, thorough legal preparation will determine sustainable success.

VI. About Us, Hankuk Law Firm

■ Hankuk Law Firm – Introduction

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