Vietnam’s retail market in recent years has been growing strongly, expanding in a variety of forms, especially in developed cities and urban areas. The business environment in the retail market is increasingly favorable, creating favorable conditions for subjects participating in exchange and purchase to have many opportunities to expand production and business activities. To enter the market and compete in a healthy way, it is necessary for business entities to understand the current legal regulations on conditions and procedures for setting up retail establishments. LSX Lawfirm will give you an article about: “Conditions for setting up a retail establishment in Vietnam”, as follows:
Legal grounds
Decree No. 09/2018/ND-CP detailing the Commercial Law and the Law on Foreign Trade Management on goods purchase and sale activities and activities directly related to the purchase and sale of goods by foreign investors; foreign-invested economic organizations in Vietnam.
What is retail?
So, according to Clause 7, Article 3 of Decree 09/2018/ND-CP; retail is the activity of selling goods to individuals, households and other organizations for consumption purposes.
Then Retail organizations vary in size, be it a single store or a chain of stores consisting of multiple branches; including department stores, specialty stores, and discount stores. and consumer cooperatives.
Conditions for setting up a retail establishment in Vietnam
According to Article 22 of Decree 09/2018/ND-CP, conditions for setting up a retail establishment are prescribed for the following cases:
Establishment of the first retail establishment
- Have a financial plan to set up a retail establishment;
- No more overdue tax debt in case established in Vietnam for 01 year or more;
- The location for establishment of the establishment is consistent with the relevant planning in the geographical market area.
You can refer to the distinguish between Business License, Certificate of Business Registration; or Application for the License to trade in tobacco ingredients in Vietnam; Conditions for the issuance of the License to trade in tobacco ingredients in Vietnam through other article of LSX Lawfirm.
Establishment of a retail establishment in addition to the first retail establishment
- In case the economic needs test is not required: Satisfy the prescribed conditions; as for setting up the first retail establishment.
- In the case of an economic needs test, in addition to the above conditions, the economic needs test (ENT) met. Specifically:
In case ENT required: Setting up a retail establishment other than the first retail establishment; unless that retail establishment has an area of less than 500 m2; established in a trade center and is not a store type convenient, mini supermarket.
ENT test criteria:
- Firtly, the size of the geographic market area affected when the retail establishment operates;
- Secondly, number of retail establishments operating in the geographic market area;
- Thirdly, the impact of the retail establishment on the stability of the market and the business activities of the retail establishments; traditional markets in the geographical market area;
- The influence of retail establishments on traffic density, environmental sanitation, fire prevention in the geographical market area;
- Finally, the ability of retail establishments to contribute to the socio-economic development of the geographical market area.
Related questions
According to Clause 7, Article 3 of Decree 09/2018/ND-CP, retail is the activity of selling goods to individuals, households and other organizations for consumption purposes.
Retail organizations vary in size, be it a single store or a chain of stores consisting of multiple branches, including department stores, specialty stores, and discount stores. and consumer cooperatives.
– An application form for a license to set up a retail establishment (Form 04 in the Appendix to this Decree).
The explanation contains the following contents:
Location of retail establishment: Address of retail establishment; description of the general, relevant area and the area used for the establishment of the retail premises; explain the satisfaction of prescribed conditions; enclosed with documents on the location of the retail establishment;
Business plan at the retail establishment: Present the business plan and market development; demand for labor; assess the impact and socio-economic efficiency of the business plan;
Financial plan for setting up a retail establishment: Report on business results on the basis of audited financial statements of the latest year in case it has been established in Vietnam for 01 year or more. ; explanation of capital, capital sources and capital mobilization plans; accompanied by financial documents.
Documents of tax authorities proving that there is no overdue tax debt.
– Copies: Certificate of business registration, Certificate of investment registration of retail establishment project (if any), Business license.
– An explanation of the ENT criteria in case an ENT is required.
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