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Open a retail distribution company

Vietnam retail industry has being a stable business in many years, in the context of large population, economic situation flourish and good spending. For those investors who want to join retail industry in Vietnam, this Article is for you:

1. Scope of business

Retailing is the activity of selling goods to individuals, households and other organizations (end users) using for consumption purposes.

In Vietnam, retail distribution is a conditional business applying for foreign investors, subject to a Business License; appraisal and a Store Establishment License (in case investors establish many retail stores).

 

2. How to get a Business License

Business License mandatory applies for all retail distribution investment projects. After your company obtained Investment Registration Certificate and Enterprise Registration Certificate with retail distribution right, same as opening a wholesale distribution company, next step, asking for a Business License:

Conditions

In case a foreign investor comes from a country which is a party to WTO or other commercial treaties to Vietnam:

– Satisfying market access conditions in treaties to which Vietnam is a contracting party;
– Having financial plans to carry out activities of applying for business licenses;
– Having no overdue tax arrears in cases where they have been established in Vietnam for one year or longer.

In cases foreign investors do not belong to countries or territories participating in Commercial Treaties to Vietnam, they shall satisfy the following criteria:

– Compliance with the provisions of specialized law;
– Compatibility with the level of competition of domestic enterprises in the same field of operation;
– Ability to create jobs for domestic workers;
– Ability and level of contribution to the state budget.

 

Check lists of dossier

An application form;
Explanatory statement with the following contents:

– Explanation about the conditions for the grant of corresponding business licenses
– Business plan:
– Financial plan
– The situation of conducting business of goods purchase and sale and activities directly related to the purchase and sale of goods;
– Documents of the tax office to prove that no overdue tax debt;

Copies of: Enterprise Registration Certificate; Investment Registration Certificate with retail distribution right.

 

Licensing agency

– Provincial Department of Industry and Trade (“DOIT”) or Ministry of Industry and Trade (“MOIT”)

– Time: ~10 workings day

 

3. Forms of the retail establishment

– First retail store

– Second retail outlet onwards are retail stores established in Vietnam by one of the foreign investors, a foreign-invested economic organization which has a retail store in Vietnam, or is formed under the same name or trademark as at least one retail establishment owned by a foreign-invested economic organization exists in Vietnam.

– Convenience stores are retail establishments of consumer goods, including: Food, beverages, non-prescription pharmaceuticals, functional foods and health products, cosmetics and other products for daily consumption.

 

– Mini-super markets are retail outlets less than 500 m2 and in the form of a general supermarket in accordance with the law.

 

– Trade centers are places which consists of many retail and service establishments, which are arranged centrally and seamlessly in one or some adjacent architectural works.

 

 

4. Economic Need Test (“ENT”) and Store Establishment License

4.1. Establishment of the first retail outlet

(i) Having financial plans for setting up retail outlet;

(ii) Having no overdue tax arrears in cases  they have been established in Vietnam for one year or more;

(iii) The location of the retail establishment in accordance with the relevant planning in the geographical market area.

Although the first retail store is not subject to ENT, the first retail store must be granted a separate Store Establishment License.

 

4.2. Second retail outlet onwards

Exempted cases of ENT: proposed retail outlet is less than 500 m2 and located in a shopping center, and is not mini-supermarket or convenience store.

Other cases are subject to ENT with following criteria:

– The size of the geographical market area is affected when the retail establishment operates;

– Number of retail outlets operating in the geographic market area;

– The impact of retail sales on the stability of the market and the business of traditional retail stores and markets in the geographic market area;

– Influence of retailers on traffic density, environmental sanitation, fire prevention and fighting in the geographic market area;

– The retail establishments’ ability to contribute to the socio-economic development of the geographical market area, specifically:

+ Create jobs for domestic workers;

+ Contribute to the development and modernization of the retail sector in the geographic market area;

+ Improve the environment and living conditions of the population in the geographical market area;

+ Ability and level of contribution to the state budget.

Time: 53 working days

MOIT and Provincial people’s committees are empowered to administer the ENT via an ENT Committee.

 

SHOULD YOU ENGAGE IN A LAWYER AND AN ACCOUNTANT

Investment registration may seem like a major step in a new business venture for many people. Like anything, it can be daunting if you haven’t done it before and you definitely to make sure that it’s done correctly. Otherwise, you may waste a lot of time and pay fines if you do mistake, even a little one.

The process is generally quite smooth if you involve a professional to help you out. Every one wants to spend less time administering their business and more time running it. In Feline Legal, with many years experience in corporate services, lawyers and accountants will assist you and provide advance with forming your company. We also complete the paperwork, register your company and follow steps after that. You can save a lot of time and enjoy good services with reasonable price

For more information, please leave a message in chat box, or

 

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