What is the trading license in Vietnam?
The trading license is a sub-license mandatory for foreign-owned companies in some specific cases; notably when providing services of:
The trading license is granted by the Department of Industry and Trade and in some special cases, an approval from the Ministry of Industry and Trade can be required.
If a retail outlet is also to be established, an additional sub-license is required. This last license can be difficult to obtain, especially if several outlets are to be opened as the company must obtain the outlet license for each of them and pass the Economic Needs Test (“ENT”). The ENT is not required for the first retail outlet and subsequent outlets having a total area under 500 sqm and located inside a shopping mall, provided that such outlet is not in the form of a convenient store or mini supermarket.
Legal services:
How to proceed?
The trading license is a sub-license mandatory for foreign-owned companies in some specific cases, notably when providing services of:
The trading license is granted by the Department of Industry and Trade and in some special cases, an approval from the Ministry of Industry and Trade can be required.
Direct and indirect investment are usually defined as follows:
Although the law on enterprises and investment does not specifically stipulate the prohibition of foreign investors from establishing sole-proprietorship companies, there is no regulation on the process for foreign investors to establish sole-proprietorship company. Therefore, currently, it is not feasible to establish a sole-proprietorship company in Vietnam because the nature of the sole-proprietorship company is owned by an individual, which is fully responsible and not limited to the company’s activities with all of his/her assets, and this characteristic makes it very difficult for the State to limit the responsibility of foreign investors.
Foreign investor must have a Trading License when operating in the following business areas:
Provide commercial promotion services (excluding advertising services).
Investors must apply for a Trading License when they actually operate in the business lines and sectors where Trading License are required.
In circumstance of business lines have not yet operated in reality but have been registered on the Enterprise registration certificate and Investment registration certificate, an application for license is not required.
There are currently no regulations on the minimum capital required to be granted a Trading License. Nevertheless, the competent authority shall base their assessment of the application on the amount of investment capital to determine the investor’s financial capacity and effectiveness when operating in Vietnam. They also either approve or refuse to grant a Trading License base on the amount of investment capital.
The processing time for a Trading License application is approximately 30 working days on average. However, depending on the scale and field of business, the processing time may be longer.
Enterprises owned partially or entirely by foreign investors are required to apply for a Trading License when operating in business sectors and fields that are required under Vietnamese law.
In circumstance a new supplementary business line is required of having a Trading License, the investor must carry out a procedure to amend the Trading License in order to match with new scope of operation.