Trading Licensing
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:
- Retail,
- Wholesale of specific products (such as llubricants, rice, sugar, recorded items, books, newspapers and magazines),
- E-commerce,
- Logistics (except for specific cases),
- Goods leasing (excluding finance leasing and leasing of construction equipment with operator services),
- Commercial intermediary,
- Bid-holding,
- Commercial promotion (excluding advertising services).
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:
- Applying for the trading license;
- Adjusting or renewing the license to follow your business’ evolution (change of business activities, address, name, etc.);
- Obtaining the retail outlet license to set up your retail establishment, and passing the Economic Needs Test when required.
How to proceed?
- Contact us via phone, email or create a CRM account to define your investment requirements and objectives with our lawyers.
- Whenever possible we will meet in person to define your legal strategy in depth.
- Our legal services will notably include our advisory on the conditions to obtain the Trading License and setup the retail outlet (if any).
- We will provide you with the list of required information and documents, as well as the application dossier drafted and translated by us into Vietnamese and English languages.
- At any time, you can access the CRM system to manage and keep a track of your legal services.
The trading license is a sub-license mandatory for foreign-owned companies in some specific cases, notably when providing services of:
- Retail;
- Wholesale of specific products (such as lubricants, rice, sugar, recorded items, books, newspapers and magazines);
- E-commerce;
- Logistics (except for specific cases);
- Goods leasing (excluding finance leasing and leasing of construction equipment with operator services);
- Commercial intermediary;
- Bid-holding;
- Commercial promotion (excluding advertising services).
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:
- Direct investment is a form of investment in which foreign investors invest in the company’s capital in order to gain direct control over the company and investment project.
- Indirect investment is a form of investment in which foreign investors invest in the company’s capital but are not directly involved in the management.
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:
- Retails;
- Goods or trading products, such as: lubricants, rice, sugar, recorded items, books, newspapers and magazines;
- Electronic commerce services;
- Logistics services (other than some of special circumstances)
- Provide Goods for leasing, exclusive financial leasing and other than leasing of construction equipment with operators;
- Provide commercial intermediary services;
- Provide bid-holding for Goods and Services;
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.
