HOW TO OPEN A RETAIL STORE IN VIETNAM?

Investment consulting

1. Can foreign investors open a retail store in Vietnam?
2. What are the requirements to open a retail store in Vietnam?
3. How much capital is needed to open a retail store in Vietnam?
4. What business sectors are allowed for foreign investors to open in Vietnam?
5. What licenses are required for foreign investors to open a retail store in Vietnam?
6. What are the procedures for foreign investors to open a retail store in Vietnam?
7. What are the considerations for foreign investors to open a retail store in Vietnam?
8. Why should foreign investors hire a lawyer when opening a retail store in Vietnam?
9. What does a lawyer specializing in consulting on opening a retail store in Vietnam do?
10. How can foreign investors find an advisory lawyer when opening a retail store in Vietnam?
11. FAQ related to opening a retail store in Vietnam

In Vietnam, foreign investors have been creating a diverse landscape of businesses, ranging from large-scale shopping centers and convenience stores to specialty stores offering products unique to each country, as well as small shops catering to individuals' basic needs. This indicates that the retail market in the country is becoming increasingly vibrant and attracting the participation of many businesses. However, what legal regulations do foreign investors need to comply with to operate here? This article will address the concerns that foreign investors are particularly interested in.

1. Can foreign investors open a retail store in Vietnam?

The answer is: Yes, foreign investors can fully open retail stores in Vietnam. The country has opened its retail market to foreign investors, creating favorable conditions for international brands to come and do business in Vietnam.

This is regulated in the legal documents of Vietnam, especially under Investment Law and guiding decrees. Foreign investors can establish enterprises to conduct business in various industries, including retail, except for certain conditional or prohibited business sectors.

2. What are the requirements to open a retail store in Vietnam?

a. For the investors

Meeting market access conditions similar to those for Vietnamese investors;
Meeting the conditions regarding business lines, sectors and trades with restricted market access for foreign investors, including Business lines with prohibited market access and those with conditional market access:
- Holding of charter capital by the foreign investor in a business organization;
- Investment method;
- Scope of investment;
- The investor capacity and partners participating in investment activities;
- Other conditions specified by Vietnamese laws and International Treaties.

b. For investment project

Must not belong to prohibited business lines;
Must have a location for project implementation (business or retail location);
Must be in accordance with planning;
Must meet conditions regarding investment capital and labor.

c. For the establishment of the first retail store

Must have a financial plan to establish a retail base;
Must not have overdue taxes if established in Vietnam for 1 year or more;
Must establish retail stores in accordance with relevant planning in the geographical market area.

In addition, foreign investors need to comply with additional requirements as follows:

Ensure that the products and services provided meet quality and safety standards as required by Vietnamese law. Some products may require special certification or quality inspection.
Establish clear, transparent return and refund policies, and communicate them to customers. Ensure that these policies comply with consumer protection regulations.

3. How much capital is needed to open a retail store in Vietnam?

a. Estimated costs for opening a retail store in Vietnam

The costs of opening a retail store in Vietnam for foreign investors can vary significantly, depending on the scale of the store, location, staffing, and types of merchandise targeted by the investors. Key costs to consider specifically include:

Rental costs: including deposit, monthly rent, repairs, and renovation costs;
Design and construction costs: interior design, installation of electrical systems, water supply systems, air conditioning systems, fire alarm systems,...;
Equipment costs: display cabinets, computers, POS machines, sales management system,...;
Merchandise costs: initial inventory;
Personnel costs: employee salaries, benefits;
Licensing fees: business license, food safety and hygiene license (if applicable),...;
Marketing costs: advertising, promotions, communication;
Other costs: legal fees, transportation costs, insurance,...

To obtain the most accurate estimate, investors should create a detailed budget plan and seek advice from experts. However, by investing more money in a large scale with diverse products, and high-quality services, the store can attract a large number of customers and increase sales revenue, while building a strong brand that gains customer trust.

b. Minimum capital required for foreign investor opening a retail store in Vietnam

Vietnamese law does not require a minimum capital for most retail business activities conducted by foreign investors in Vietnam. However, they need to demonstrate financial capability, explain their sources of investment capital within Vietnam, and provide an investment cost plan to open a retail store that meets regulatory approval. Currently, many foreign investors are participating in the retail market in Da Nang. Therefore, calculating investment amounts and planning for the construction and development of retail stores is essential for new investors to compete effectively and successfully operate their retail business models.

4. What business sectors are allowed for foreign investors to open in Vietnam?

Foreign investors can operate a wide range of business sectors in Vietnam, except for those prohibited and restricted to foreign investors, as specified below:

Prohibited sectors: 08 sectors are prohibited from investing and doing business, such as trading in narcotics; trading in various chemicals and minerals; trading in specimens of wild plants and animals sourced from natural resources; engaging in prostitution;...

(As per Article 6 of the Investment Law in 2020).

Restricted sectors: 25 sectors have not yet accessed the market for foreign investors.

(Enclosure I accompanying Decree No. 31/2021/ND-CP)

Conditional access sectors: 59 sectors have market access conditions for foreign investors.

(Enclosure I accompanying Decree No. 31/2021/ND-CP).

Examples of some popular business sectors that foreign investors often choose to include:

Fashion: clothing, shoes, accessories, lingerie, etc., from famous global brands.
Cosmetics: skin care products, hair care products, makeup, etc.
Food and beverages: mini supermarkets, convenience stores, restaurants, cafés, imported products.
Home appliances: electronics, kitchenware, furniture.

5. What licenses are required for foreign investors to open a retail store in Vietnam?

For foreign investors to open a retail store in Vietnam, the basic licenses required include:

Investment registration certificate;
Enterprise registration certificate;
Business license;
Retail outlet establishment license.

In addition to these licenses, depending on the industry and business products involved, investors may need to obtain additional licenses or certificates when opening a retail store in Vietnam, such as licenses for alcohol retailing, licenses for tobacco retailing, certificates of food hygiene and safety, certificates of fire prevention and fighting,...

6. What are the procedures for foreign investors to open a retail store in Vietnam?

a. Applying for Investment registration certificate

Step 1: The investor submits 01 dossier to apply for an Investment registration certificate

Documents requesting implementation of the investment project, including a commitment to bear all costs and risks if it is not approved.
Documents proving the investor's legal status.
Documents demonstrating the investor's financial capacity.
A proposed investment project. In cases where Construction law stipulates that a pre-feasibility study report must be prepared, the investor may submit this report instead of an investment project proposal.
In case the investment project does not request State allocation or leasing of land, , or permission for changes in land use purpose, submit a copy of land use rights documents or other documents confirming rights to use the location for the implementing this investment project.
An explanation regarding technology used in investment projects that require appraisal and consultation according to technology transfer regulations.
A BCC contract for investment projects in the form of BCC contract.
Other relevant documents related to the investment project, conditions, and capacity requirements of the investor as specified by law (if any).

Step 2: The investment registration agency reviews the dossier and issues the Investment registration certificate to the investor within 15 working days from the date of receipt of valid documents.

b. Applying for Enterprise registration certificate

Step 1: Preparing the dossiers

After obtaining the Investment registration certificate, investors can choose their type of enterprise and apply for an Enterprise registration certificate. The application documents differ depending on this type but generally include:

An application for Enterprise registration;
Company charter;
List of members/ List of founding shareholders and shareholders, including those who are foreign investors;
Copies of identification documents: Citizen identification card or Identity card or Passport for individual members; Establishment decision, Enterprise registration certificate and authorization document; Legal identification documents for authorized representative of the organizational member;
A copy of Investment registration certificate for foreign investors.

Step 2: Submitting the dossiers

The investor submits 01 dossier to the Business Registration Office at their intended store location. The Business Registration Office shall issue the Enterprise registration certificate within 03 working days from the date of receipt of the satisfactory application.

c. Business license application

Step 1: The foreign investor submits a dossier to the Department of Industry and Trade. The application includes:

An application form for a Business license;
A representation specifying:
- Requirements for issuance of a Business license as prescribed in law;
- Business plan: Describe the content and methods of conducting business activities; present the business and market development plan; labor requirements; assess socio-economic impacts and effectiveness of the business plan.
- Financial plan: An income statement based on the most recent audited financial statement if the enterprise has been established in Vietnam for at least 1 year; details on capital, sources of funds, and fund-raising plans; accompanied by other financial documents.
- The sale of goods and other related activities, along with the financial situation of the foreign-invested enterprises are determined up to the time of submitting the application for a Business license.
A document from the Tax authority certifying that there are no overdue taxes owed by the enterprise.
Copies of: Enterprise registration certificate; certificate of registration for sale of goods and other related activities (if any).

Step 2: Timeframe for issuing a Business license

Within 10 working days from the date of receiving a complete and valid application, the Department of Industry and Trade will review licensing conditions for licensing; if the conditions are met, the Department will forward the application and a written request for approval to both the Ministry of Industry and Trade and any relevant managing ministries.
Within 15 days from the date of receiving the application, the Ministry of Industry and Trade and the relevant managing ministries will issue a written approval for the business license.
Within 03 working days from the date of receiving the approval from the Ministry of Industry and Trade and the relevant managing ministries, the Department of Industry and Trade will issue the business license.

Note: If denied, a written response must be provided, clearly stating the reasons.

d. Applying for Retail outlet establishment license

Step 1: The investor submits 02 dossiers to the Department Of Industry And Trade requesting the issuance of a Retail outlet establishment license, including:

An application form for a Retail outlet establishment license.
A representation specifying: The location of the retail store; Business plan for the retail store; and Financial plan for the retail store.
A document from the Tax authority certifying that there are no overdue taxes owed by the enterprise.
Copies of: Enterprise registration certificate, Investment registration certificate for setting up a retail store (if any), Business license.
A representation of ENT criteria prescribed in the case without requiring compliance with ENT procedure.

Step 2: Timeframe for issuing Retail outlet establishment license

With 03 working days from the date of receiving the application, the Department of Industry and Trade will review it and request modifications if it is incomplete or invalid.
Within 10 working days from the date of receiving a complete and valid application, the Department of Industry and Trade will verify compliance with conditions for establishing a retail store:

If conditions are not met, the Department will provide a written response stating reasons;
If conditions are met, the Department will forward the application along with a request for opinions to both the Ministry of Industry and Trade and any relevant managing ministries.

Within 07 working days from the date of receiving the application, based on its content, the Ministry of Industry and Trade will issue written approval for the Retail outlet establishment license; if denied, a written response must be provided stating reasons.
Within 03 working days from the date of receiving approval from the Ministry of Industry and Trade, the licensing authority will issue the Retail outlet establishment license. If denied, a written response must be provided stating reasons.

The Retail outlet establishment license is valid for a duration corresponding to the remaining validity period of the Investment registration certificate for the retail store project. In cases where there is no Investment registration certificate, the duration of the Retail outlet establishment license corresponds to the duration specified in documents regarding the location of the retail store.

7. What are the considerations for foreign investors to open a retail store in Vietnam?

a. The forms of investment

The foreign investor can invest in Viet Nam through the following form:

Investment in establishing an economic organization;
Investment by contributing capital, purchasing shares, purchasing capital contribution;
Investment in the form of a BCC contract;

Vietnamese law does not allow foreign investors to conduct business in the form of establishing private enterprises or individual business households. Therefore, foreigners wishing to open retail stores cannot choose these two business forms.

b. Renewal of Retail outlet establishment license

At least 30 days before the expiration of the Retail outlet establishment license, the investor must submit a complete application for the extension of the Retail outlet establishment license to the Department of Industry and Trade of Vietnam.

8. Why should foreign investors hire a lawyer when opening a retail store in Vietnam?

Opening a retail store in Da Nang, particularly for foreign investors, requires compliance with complex and detailed legal regulations. The Vietnamese legal system strictly regulates the retail business sector, including business conditions, licensing procedures, and compliance with environmental, fire safety, and tax requirements.

Foreign investors often face difficulties due to language barriers and differences in legal systems. This can lead to significant time loss, increased costs, and even legal risks due to errors in preparing and submitting applications.

Hiring a reputable lawyer with experience in investment and business in Vietnam not only helps investors save time but also ensures that legal processes are conducted accurately. A lawyer will assist from advising on investment conditions to representing clients in complex legal procedures for establishing a retail business. Furthermore, with extensive knowledge of the retail market in Da Nang, lawyers can serve as “strategic partners”, supporting investors with all legal matters while optimizing business plans to ensure a smooth and effective retail store opening process.

9. What does a lawyer specializing in consulting on opening a retail store in Vietnam do?

a. Legal counseling:

Counseling on the conditions, documents, procedures for establishing a retail store in Da Nang;
Counseling on choosing the form, industry, and investment location; investment incentive policies, tax policies, etc;
Counseling on legal issues throughout the implementation and operation of the project;
Counseling on all other issues after establishing a retail store, such as tax declaration, labor policies, etc;.

b. Legal procedures:

Guiding clients to prepare necessary dossiers;
Preparing all of the documents mentioned above;
Representing and submitting applications for various licenses to the Competent state authorities; ;
Conducting procedures for obtaining sub-licenses for each conditional business line (if required);
Other legal procedures.

10. How can foreign investors find an advisory lawyer when opening a retail store in Vietnam?

Currently, in any field, finding a service provider is quite simple. However, finding a unit that has both sufficient expertise and dedication is extremely difficult. Finding a lawyer in general and a lawyer specializing in consulting on opening retail stores in Vietnam who meets the criteria of professionalism, dedication, and ethics is even more challenging.

Phong & Partners Law firm is one of the reliable addresses specializing in providing consulting services and representing clients in legal procedures related to investment and retail business not only in Vietnam but also nationwide. With a team of experienced lawyers knowledgeable about business law and the retail market, Phong & Partners is committed to providing effective solutions that save time and costs for clients.

If you are looking for a reputable legal unit to accompany you in the process of opening a retail store in Vietnam, please contact Phong & Partners for comprehensive and professional support.

* Advantages of investing in opening a retail store in Vietnam for foreigners

Every year, Vietnam welcomes millions of domestic and international tourists, making it a city that attracts numerous investors, especially in the service and retail sectors.

* Which retail stores are popular in Vietnam?

The retail business model in Vietnam is quite diverse. Foreign investors opening retail stores in Vietnam often establish convenience stores, clothing and accessory shops, food and beverage stores, or jewelry stores…

* I previously opened a handmade accessory store on An Thuong Street, and now I want to open another store at Han Market . Do I need to go through the procedure to apply for a Retail outlet establishment license for this second store?

According to the law, each retail store needs to apply for a license. Therefore, even though you have obtained a license for your first retail establishment, you must also go through the procedure to apply for a retail establishment license for your new store.

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