Legal issues when setting up a cafe in Vietnam

Vietnam is a country with a large, young population with rising income, and most of these are willing to spend a large amount of money to regularly go to cafe to enjoy their favorite drinks which create fertile ground to set up a cafe for business. At first glance, setting up a cafe seems simple, one just needs to focus on the interior, beautiful scenery and good quality of drinks. However, the legal aspect is equally important, Apolat Legal will highlight some of the legal issues related to setting up a small cafe of your own. 

1. Set up an enterprise – legal issues when setting up a cafe

The State does not prohibit people from selling drinks without establishing a company. However, for a cafe to have sustainable growth, those who participate in opening a cafe must have a clear organizational, operation, and business results division structures. In order to formalize, stabilize, and have these structures recognized by law, it is best for the parties to set up an enterprise. In addition, the establishment of an enterprise is a mandatory condition for applying for a license in the next step¹. 

For foreigners investing to set up a cafe in Vietnam, establishing a new enterprise or buying capital/shares of a local company is a must for foreign investors to start the cafe business. Before carrying out the establishment or purchase of capital/shares, foreign investors must obtain the appropriate investment licenses². 

2. Apply for a Food Safety Eligibility Certificate 

For a cafe, in order to start operating, it is required to have a Food Safety Eligibility Certificate³. In order to apply for this Certificate, the cafe must have an Enterprise Registration Certificate with the appropriate business lines and meet the conditions on food safety such as: Having equipment for food preservations, restrooms, washing hands and clean up daily waste and garbage; Eating utensils must be made of safe materials, washed, kept dry; Using food and ingredients that are safe and have clear origins, save food samples; etc⁴. 

The Client must submit dossiers to the Department of Industry and Trade where the cafe is located ⁵ and the Ministry of Health (if there is trade in bottled drinking water and natural mineral water)^6. Within 15 days from the date of submission, the authorities will directly visit the cafe to check the actual compliance with food safety conditions. If they deem that the cafe has complied properly and fully, the cafe will be granted a a Food Safety Eligibility Certificate⁷. 

If the Client conducts business without the Certificate, then the Client will bear a fine of 20,000,000 to 30,000,000 VND⁸. 

3. Fire prevention and fighting 

Depending on the size of the cafe, the law will require meeting different fire prevention and fighting conditions as follows: 

1. For a cafe with a total business area of 300 m2 or more, the following conditions must be met⁹:
   1. Having rules, prohibition signs, warnings, diagrams or signboards on fire prevention and fighting and escape in accordance with regulations and standards on fire prevention and fighting or as prescribed by the Ministry of Public Security; 
   2. Having a grassroots fire prevention and fighting force, specialized in corresponding to the type of establishment, being trained in fire prevention and fighting skills and organizing firefighting readiness to meet on-site firefighting requirements as prescribed; except in exceptional circumstances; 
   3. Having a firefighting plan approved by a competent authority; 
   4. Electrical system, lightning protection, anti-static, equipment using electricity, generating fire, generating heat, the use of fire and heat sources must ensure fire prevention and fighting safety in accordance with regulations and standards. on fire prevention and fighting or as prescribed by the Ministry of Public Security; 
   5. Having a system of traffic, water supply, communication in service of firefighting, a database management system on fire prevention and fighting and incident reporting, fire alarm system, firefighting , fire prevention, etc. smoke prevention and escape, other fire prevention and fighting means, and means of saving people must ensure the quantity and quality in accordance with regulations and standards on fire prevention and fighting or according to regulations of the Ministry of Public Security; 
   6. Having the Design Approval Certificate and the design approval document (if any) and the written approval of the fire prevention and fighting results from the Fire Prevention and Fighting Police agency. 
2. For a cafe with a total business area of less than 300 m2, the following conditions must be met ¹⁰: 

1. 1. Having rules, prohibition signs, warnings, diagrams or signboards on fire prevention and fighting and escape in accordance with regulations and standards on fire prevention and fighting or as prescribed by the Ministry of Public Security; 
   2. Having a grassroots fire prevention and fighting force, specialized in corresponding to the type of establishment, being trained in fire prevention and fighting skills and organizing firefighting readiness to meet on-site firefighting requirements as prescribed; except in exceptional circumstances; 
   3. Having a firefighting plan approved by a competent authority; 
   4. Having a system of traffic, water supply, communication in service of firefighting, fire alarm system, firefighting, fire prevention, smoke prevention, escape, other fire prevention and fighting means, and means of saving people guaranteed. in quantity and quality consistent with standards and technical regulations on fire prevention and fighting or as prescribed by the Ministry of Public Security; 
   5. Having regulations and assignment of responsibilities and tasks for fire prevention and fighting. Persons in charge of fire prevention and fighting must be trained and retrained in fire prevention and fighting skills according to regulations. 

4. Parking 

In many cases, due to limited space, many cafes have occupied the roadway to serve as a parking place for customers. However, this practice is illegal, and is not within a purpose allowing temporary use of a part of the sidewalk or roadbed for parking under the law¹¹. Vehicle owners are at risk of being fined from 200,000 VND to 1,000,000 VND for illegally occupying the sidewalk¹². Therefore, the cafe owner should search for legal parking spaces according to the law near the establishment to guide customers there to park their vehicles. 

5. Intellectual property registration 

Each cafe has its own identity. The elements that make up that identity can be the restaurant’s logo, brand, name and recipe of the drink, etc. In order to keep this identity private and prevent others from stealing or copying it, the owner must take appropriate measures to register intellectual property. The Client should view a few links of Apolat Legal on intellectual property as follows: Trademark Registration Service in Vietnam

 These are some important legal issues that the Client needs to keep in mind when setting up a coffee business in Vietnam. Of course, these are just the basics, on a case-by-case basis there can be a lot of other legal issues that can arise. Apolat Legal will always help you to establish your dream cafe.

References:

¹ Clause 1 Article 36 of the Law on Food Safety 2010

² Clause 1,2 Article 21, Clause 2 Article 26, Clause 1 Article 37 of the Law on Investment 2020 

³ Clause 1 Article 11 of Decree No. 15/2018/ND-CP

⁴ Clause 1 Article 24 of the Law on Food Safety 2010

⁵ Appendix IV (III, IV) Decree 15/2018/ND-CP; Clause 2 Article 6 of Circular 43/2018/TT-BCT

⁶ Appendix II (1) Decree 15/2018/ND-CP; Clause 3 Article 6 of Decree 155/2018/ND-CP 

⁷ Clause 2 Article 36 of the Law on Food Safety 2010

⁸ Clause 8 Article 1 Decree 124/2021/ND-CP

⁹ Clause 1 Article 5 of Decree 136/2020/ND-CP

¹⁰ Clause 2 Article 5 of Decree 136/2020/ND-CP

¹¹ Article 25c Decree 100/2013/ND-CP

¹² Point dd Clause 2 Article 6, Point e Clause 3 Article 5 Decree 100/2019/ND-CP

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