Procedures for establishing a retail establishment in Vietnam ( In case of ENT economic needs test procedure)

Legal basis 

• Decree 09/2018/ND-CP detailing the Commercial Law and the Law on Foreign Trade Management on the purchase and sale of goods and activities directly related to the purchase and sale of goods by foreign investors and economic organizations with foreign investment capital in Vietnam. 

In the context of economic integration and market development, the establishment of retail establishments in Vietnam is increasingly attracting the attention of both domestic and foreign investors. However, depending on the foreign investment capital factor, the conditions, documents and procedures may differ significantly. This article will provide detailed guidance on the process of establishing a retail establishment in case of having to carry out the Economic Needs Test (ENT) procedure.  

I. Definition of retail establishments

According to Article 3.8 of Decree 09/2018/ND-CP, a retail establishment is a location where retail activities are carried out. 

According to Article 3.9 of Decree 09/2018/ND-CP, a retail establishment other than the first retail establishment is a retail establishment established in Vietnam by one of the foreign investors or foreign-invested economic organizations that already have a retail establishment in Vietnam, or established under the same name and brand as at least one retail establishment established by a foreign-invested economic organization in Vietnam. 

Retail establishments can be: 

Convenience store: is a retail establishment selling fast-moving consumer goods, including: Food, beverages, non-prescription pharmaceuticals, functional foods and health products, cosmetics and other products for daily consumption. (Article 3.10 of Decree 09/2018/ND-CP). 

A mini supermarket is a retail establishment with an area of less than 500m2 and is a type of general supermarket according to legal regulations (Article 3.11 of Decree 09/2018/ND-CP). 

A shopping mall is a location that includes many retail and service establishments arranged centrally and continuously in one or several adjacent architectural works (Article 3.12 of Decree 09/2018/ND-CP). 

II. Conditions, documents and procedures for establishing a Retail Facility that must conduct an ENT economic needs test:

(Applicable to the second or subsequent retail establishments of foreign investors, except in cases where such retail establishments have an area of less than 500 m2 , are established in commercial centers and are not of the type of convenience stores or mini supermarkets) 

1. Conditions for establishing a retail establishment with ENT

To be granted an establishment license, a retail establishment with an ENT must meet the following conditions: 

Have a financial plan to set up a retail establishment. 

No overdue tax debt if established in Vietnam for 01 year or more. 

The location of the retail facility must be consistent with relevant planning in the geographical market area. 

– Meet the Economic Needs Test (ENT) criteria: 

• The size of the geographic market area is influenced by the retail outlet in which it operates. 
• Number of retail establishments operating in a geographic market area. 

• Impact of retail establishments on market stability and business operations of retail establishments and traditional markets in the geographical market area. 

• Impact of retail establishments on traffic density, environmental sanitation, fire prevention and fighting in the geographical market area. 

• The ability of retail establishments to contribute to the socio-economic development of the geographical market area, specifically: creating jobs for domestic workers; contributing to the development and modernization of the retail industry; improving the environment and living conditions of residents; the ability and level of contribution to the state budget. 

2. Application for License to establish a retail establishment with ENT

Profile (02 sets) includes: 

Application for a License to establish a retail establishment (Form No. 04 Decree 09/2018/ND-CP). 

The report includes the following contents: 

• Location of retail establishment: Address of retail establishment; description of common and related areas and areas used for establishing retail establishment; explanation of meeting the prescribed conditions; attached documents on location of retail establishment. 

• Retail business plan: Presents business plan and market development; labor needs; evaluates the economic and social impact and efficiency of the business plan. 

• Financial plan for establishing a retail establishment: Report on business performance based on audited financial statements of the most recent year (if established in Vietnam for 01 year or more); explanation of capital, capital sources and capital mobilization plan; accompanied by financial documents. 

Tax authority documents proving no overdue tax debts. 

Copy: Business registration certificate, Investment registration certificate for retail establishment project (if any), Business license. 

Explanation of ENT criteria. 

3. Procedures for granting a License

The issuance of a License to establish a retail establishment with ENT is carried out through the following steps: 

Step 1: Submit application  

The dossier (02 sets) is sent directly or by post or electronically (if applicable conditions are met) to the Licensing Authority, specifically the Department of Industry and Trade. 

Step 2: Receive and check documents  

Within 03 working days from the date of receiving the application, the Licensing Authority will check and request amendments and supplements if the application is not sufficient and valid. 

Step 3: Check conditions and establish ENT Council  

Within 05 working days from the date of receiving complete and valid documents, the Licensing Authority shall check the compliance with the conditions. 

In case the conditions are not met, the Licensing Authority shall issue a written reply stating the reasons. 

If the conditions are met, the Licensing Authority shall propose the establishment of an ENT Council. 

Within 07 working days from the date of receipt of the request to establish the ENT Council, the Provincial People’s Committee shall establish the ENT Council. 

Step 4: Evaluate ENT criteria and seek advice from the Ministry of Industry and Trade  

Within 30 days from the date of establishment, the ENT Council shall evaluate the ENT criteria so that the Chairman of the ENT Council may issue a written conclusion and proposal. 

Within 03 working days from the date of receipt of the proposed conclusion document of the Chairman of the ENT Council: 

• In case the conclusion document recommends not granting a license, the Licensing Authority shall respond in writing and state the reasons. 

• In case the conclusion document proposes to grant a license, the Licensing Authority shall send the dossier with a written request for comments to the Ministry of Industry and Trade. 

Step 5: Approval by the Ministry of Industry and Trade and issuance of License   

Within 10 working days from the date of receipt of the dossier, the Ministry of Industry and Trade shall issue a written approval to grant a License to establish a retail establishment; in case of refusal, a written response must be provided stating the reasons. 

Within 03 working days from the date of receipt of the approval document from the Ministry of Industry and Trade, the Licensing Authority shall issue a License to establish a retail establishment. 

In case the Ministry of Industry and Trade refuses, the Licensing Authority must have a written response stating the reasons. 

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