SERVICE FOR APPLYING FOR A RETAIL ESTABLISHMENT LICENSE

 

I. SERVICE PROVISION PROCESS AT VINASC:

 

Step 1. Vinasc receives information about the enterprise’s application for a retail establishment license with the following basic contents:

• Information of the economic organization intending to establish a retail establishment: Enterprise name; enterprise code; head office address; business license number;
• The enterprise’s need to establish a retail establishment: intends to establish the first retail establishment; or set up a retail establishment outside the first retail establishment;
• Name of retail establishment;
• Address of the retail establishment;
• Type of retail establishment: Convenience store, mini supermarket, retail establishment in a commercial center;
• Scale of retail establishment, including:

• Total land area used for the retail establishment project (m2);
• Total construction floor area (m2): Sales area; Service business area;

Vinasc will review the specific legal requirements involved to develop a service implementation plan.

Step 2. Depending on each specific case, Vinasc will consider to advise and guide on procedures for applying for a retail establishment license. The two parties discuss to agree on the content of the service. Then Vinasc drafts the contract and sends it back to the customer for signing.

Step 3. Vinasc instructs customers to prepare their own documents related to the Procedure for applying for a retail establishment license as follows:

• Copy of Investment Registration Certificate of the project;
• Copy of Enterprise Registration Certificate;
• Lease contract for premises;
• Certificate of land use right, legal ownership of the location of the retail establishment;
• Confirmation from the tax authority that there is no overdue tax debt;
• Explanation of ENT criteria;

Step 4. Vinasc prepares the following documents and transfers them to customers for signing:

• Application for a retail establishment license;
• Explanation of the location of the retail establishment;
• Report explaining the business plan at the retail establishment, financial plan for establishing the retail establishment;
• Other relevant documents

Depending on the specific case of the customer, Vinasc will prepare all corresponding documents to send to the customer as soon as possible.

Step 5. Receive the signed documents from the customer and check the authenticity of the documents;

Step 6. Submit documents to the Department of Industry and Trade where the foreign-invested economic organization intends to establish a retail establishment;

Step 7. Transfer specific results to customers.

II. SPECIFIC RESULTS

• License to issue a retail establishment license;

III. ESTIMATED IMPLEMENTATION TIME

• Apply for a retail establishment license: 45-60 working days

The above estimated time is calculated from the date Vinasc receives all documents as requested and sent to you.

IV. SOME REGULATIONS RELATED TO THE ISSUANCE OF RETAIL ESTABLISHMENT LICENSES FOR FOREIGN TRADERS IN VIETNAM

1. Conditions for establishing a retail establishment:

(*) Setting up the first retail establishment

1. a) Having a financial plan to establish a retail establishment;
2. b) No overdue tax debt in case of having been established in Vietnam for 01 year or more; c) The location of the retail establishment is in accordance with the relevant planning in the geographical market area.

(*) Setting up a retail establishment outside the first retail establishment

1. a) In case of not having to conduct an economic needs test: Satisfy the conditions specified in Clause 1 of this Article.
2. b) In case of having to conduct an economic needs test:

• Satisfy the conditions specified in Clause 1 of this Article;
• Satisfy the economic needs test criteria specified in Decree 09/2018/ND-CP

2. What are the regulations on the Economic Needs Test Council (ENT Council)?
3. The ENT Council is established by the People’s Committee of the province where the retail establishment is established based on the proposal of the Licensing Agency.
4. The ENT Council consists of: A representative of the provincial People’s Committee or a representative of an agency authorized by the provincial People’s Committee to act as the Chairman of the ENT Council; representatives of the Department of Industry and Trade, the Department of Planning and Investment and other relevant departments, branches, organizations as members of the ENT council. In case the location of the retail establishment is located in a ward, commune or town area adjacent to another province/city directly under the Central Government, the ENT Council must have a representative of the People’s Committee of the adjacent province/city.
5. The ENT Council, based on the assessment of ENT criteria, must clarify the suitability or unsuitability of the location of the retail establishment so that the Chairman of the ENT Council can conclude in writing a proposal to allow or not allow the establishment of the retail establishment at that location.
6. Reporting regime
7. a) Periodic reporting regime:

Periodically every year before January 31, foreign-invested economic organizations are responsible for reporting the status of goods trading and activities directly related to the purchase and sale of goods.

In case of not implementing the periodic reporting regime as prescribed in this regulation for 24 consecutive months, the enterprise will have its Business License revoked. That means the retail establishment license will also be revoked.

1. b) Reporting on request

Report, provide documents or explain issues related to the purchase and sale of goods and activities directly related to the purchase and sale of goods, the operation of retail establishments at the request of the competent state management agency.

In case of not sending reports, documents, explanations at the request of a competent state agency after 03 months from the expiration of the request, the enterprise will have its retail establishment license revoked.

4. Basis for considering approving the issuance of a retail establishment license?

The Ministry of Industry and Trade bases on the following contents to consider approving the issuance of a retail establishment license:

• In case a foreign investor belongs to a country or territory that is a member of an international treaty to which Vietnam is a member and has committed to opening the market for the purchase and sale of goods and activities directly related to the purchase and sale of goods: Consistent with the planning, strategy for development of industries and fields of the region and the country.
• In case a foreign investor does not belong to a country or territory that is a member of an international treaty to which Vietnam is a member

1. a) Conformity with the planning and strategy for development of industries and fields of the region and the country;
2. b) The process of negotiating the opening of Vietnam’s market;
3. c) Vietnam’s need to open the market;
4. d) Vietnam’s strategy for cooperation with foreign partners;
5. e) Diplomatic relations, national security issues, order and social safety.

In the case of trading in goods that are rice; sugar; recorded items; books, newspapers and magazines, retail establishment licenses only allow retail in the form of supermarkets, mini supermarkets, convenience stores, but are not allowed to expand the form like other items.

5. Regulations on administrative sanctions in case of non-compliance with regulations?

According to Article 70 of Decree 98/2020/ND-CP stipulates: “ Article 70. Violations against regulations on purchase and sale of goods and activities directly related to the purchase and sale of goods of foreign-invested enterprises in Vietnam

1. A fine ranging from VND 10.000.000 to VND 20.000.000 shall be imposed for committing one of the following violations:
2. a) Providing false information in the application for issuance, re-issuance, modification or renewal of the business license or license for establishment of retail outlet;
3. b) Failing to report the loss of business license or license for establishment of retail outlet to competent authorities;
4. c) Failing to submit reports or provide documents or explanations about issues concerning the enterprise’s operation at the request of competent authorities.
5. A fine ranging from VND 20.000.000 to VND 30.000.000 shall be imposed for committing one of the following violations:
6. a) Failing to carry out procedures for modification of the business license or license for establishment of retail outlet upon occurrence of any changes in its contents;
7. b) Failing to carry out procedures for re-issuance of the business license or license for establishment of retail outlet in case it is lost, torn, damaged, burned or otherwise destroyed.
8. A fine ranging from VND 30.000.000 to VND 40.000.000 shall be imposed for committing one of the following violations:
9. a) Organizing a system for purchase of goods in Vietnam for export inconsistently with the Law of Vietnam or an international treaty to which the Socialist Republic of Vietnam is a signatory;
10. b) Organizing or participating in a distribution system in Vietnam inconsistently with the Law of Vietnam or an international treaty to which the Socialist Republic of Vietnam is a signatory;
11. c) Trading in goods or services against Vietnam’s market opening commitments or the Law of Vietnam;
12. d) Operating beyond the scope specified in the business license or license for establishment of retail outlet;
13. dd) Illegally establishing a retail outlet in Vietnam.
14. A fine ranging from VND 40.000.000 to VND 50.000.000 shall be imposed for continuing operations after the business license or license for establishment of retail outlet has been revoked by a competent authority or has been expired without renewal granted.
15. Additional penalty:

The business license or license for establishment of retail outlet shall be suspended for a fixed period of 01 – 03 months or business operations shall be suspended for a fixed period of 01 – 03 months if one of the violations prescribed in Clause 3 of this Article is committed.

6. Remedial measure:

The violating entity is compelled to return any benefits illegally obtained from the commission of one of the violations in Clause 3 and Clause 4 of this Article.”

Thus, violations of the purchase and sale of goods and activities directly related to the purchase and sale of goods of foreign-invested enterprises in Vietnam, specifically violations of regulations related to retail establishment licenses, may be fined up to VND 50,000,000.

*Summary Table of Required Documents

No.	Required documents	Implementer
		Customer (1)	Vinasc Group (2)	Vinasc Group handles on behalf of our client (3)
Issuance of a new license for the establishment of the first retail outlet; and Issuance of a new license for the establishment of a retail outlet in addition to the first retail outlet (In case the retail outlet has an area of less than 500 m2, is located in a shopping center and is not a convenience store or mini supermarket)
1	Application for Retail Establishment License		X
2	Power of Attorney for Service		X
3	Explanation of Retail Establishment (Explanation of retail location, business plan, and financial plan for retail establishment)		X
4	Tax Authority’s Confirmation of No Outstanding Tax Debt	X
5	Copy of Business License	X		X
6	Copy of Enterprise Registration Certificate	X		X
7	Copy of Investment Registration Certificate	X		X
Issuance of a new license for the establishment of a retail outlet in addition to the first retail outlet (Applied in cases where ENT (Economic Needs Test) is required)
1	Application for Retail Establishment License		X
2	Power of Attorney for Service		X
3	Explanation of Retail Establishment (Explanation of retail location, business plan, and financial plan for retail establishment)		X
4	Explanation of ENT criteria		X
5	Tax Authority’s Confirmation of No Outstanding Tax Debt	X
6	Copy of Business License	X		X
7	Copy of Enterprise Registration Certificate	X		X
8	Copy of Investment Registration Certificate	X		X
Adjustment of retail establishment license in case of change of name, business identification code, headquarters address; name, address of retail establishment; retail establishment type (except for change of retail establishment type to convenience store, mini mart)
1	Application for adjustment of retail establishment license		X
2	Power of attorney		X
3	Copy of Business License recording the adjusted content	X		X
4	Copy of document from competent authority confirming the change of address	X		X
Adjustment of retail establishment license in case of increasing the area of a retail establishment in a shopping center to under 500m2
1	Request for adjustment		X
2	Explanation of Retail Establishment (Explanation of retail location)		X
3	Report on the business performance of the retail establishment in the most recent year	X
4	Tax Authority’s Confirmation of No Outstanding Tax Debt	X
Adjustment of retail establishment license in case of increasing the area of the first retail establishment not located in a shopping center
1	Request for adjustment		X
2	Explanation of Retail Establishment (Explanation of retail location)		X
3	Report on the business performance of the retail establishment in the most recent year	X
4	Tax Authority’s Confirmation of No Outstanding Tax Debt	X
5	Explanation of meeting the conditions in accordance with the relevant planning in the geographical market area		X
Adjustment of retail establishment license in case the retail establishment other than the first retail establishment changes type to convenience store, mini mart
1	Request for adjustment		X
2	Explanation of Retail Establishment Location (Explanation of retail location, business plan, and financial plan for retail establishment)		X
3	Explanation of ENT criteria		X
4	Report on the business performance of the retail establishment in the most recent year	X
5	Tax Authority’s Confirmation of No Outstanding Tax Debt	X
Renewal of retail establishment license
1	Application for renewal of Retail Establishment License
2	Explanation of retail establishment location		X
3	Tax Authority’s Confirmation of No Outstanding Tax Debt	X
4	Copy of Enterprise Registration Certificate	X		X
5	Copy of Investment Registration Certificate for the retail establishment project	X		X
6	Copy of Business License	X		X

 

(*) According to the process, the customer is obligated to carry out the procedures in column (1) and Vinasc will be obligated to carry out the procedures in column (2).

(*) In some cases, if customers have difficulties in preparing documents, Vinasc can replace the documents in column (3). However, in this situation, we have to consider each specific case and the following issues will arise:

• Costs incurred for processing documents (these costs will vary depending on each state agency, the legal regulations in Vietnam at each stage are also different)
• Additional time incurred due to having to prepare these documents

(*) During the preparation time, customers scan all the above documents so that we can prepare the documents in a timely manner.

(*) In some special situations, state agencies may request additional information to supplement the application. Such as Tax Report…

For all information regarding the issuance of a retail establishment license, please contact Vinasc Group Joint Stock Company for detailed advice.