Asia Counsel is a dynamic international corporate and commercial law firm dedicated to serving clients in Vietnam. Our partners have over ten years of experience in working on complex and challenging matters in Vietnam. We have prepared this briefing on Retail and Distribution in Vietnam following the recent introduction of Decree 09/2018/ND-CP of the Government dated 15 January 2018 which changes the regulatory landscape for retail and distribution in Vietnam.

1. Trading and Distribution in Vietnam
February 2018
On 15 January 2018, the Government
issued Decree No. 09/2018/ND-CP,
detailing a number of provisions of the
Law on Commerce and Law on
Foreign Trade Management on goods
sale and purchase and related
activities of foreign investors and
foreign invested enterprises in Vietnam
(Decree 09). Decree 09 took
immediate effect on issue superseding
Decree 23/2007/ND-CP of the
Government dated 12 February 2007
on the same matters (Decree 23).
Decree 09 lays out important changes
to trading and distribution activities
which we will survey in this briefing.
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• logistics services other than those for
which Vietnam has committed to
open the market in international
treaties;
• goods leasing (excluding financial
leasing), except leasing of
construction equipment with
operators;
• trade promotion services (e.g.
promotional activities, displays and
introductions of goods and services,
and trade fairs and exhibitions),
except advertising services;
• trade intermediary services (e.g.
representation of business entities,
commercial brokerage, purchase
and sale of goods by authorized
dealers and commercial agency);
• e-commerce services (i.e., e-
commerce trading floors); and
• auction services for goods/services.
FOEs which are already engaged in
activities that were not required a
trading license under Decree 23 such
as the lease of goods (excluding
construction equipment with operator),
commercial promotion services
(excluding advertising services),
commercial intermediary services,
e-commerce services and
auction services before the
effective date of Decree 09 may
be required to obtain the trading
license if there are changes to
their company names, head
offices, legal representatives or
their owner/members or founding
shareholders.
The contents of a trading license
will cover a number of areas,
including, goods to be traded
and information of the owner,
members, and founding
shareholders. Therefore, changes
to this information will result in
registration of amendment to the
trading license.
Decree 09 has opened up retail of
rice, sugar, video recordings,
books, newspapers and
magazines for foreign-owned
supermarkets, mini-supermarkets
and convenience stores, subject
to consideration and approval by
the Ministry of Industry and Trade
(MOIT).
is no official record of HS Codes
permitted to be imported.
Trading License
Decree 09 prescribes the types of foreign
owned enterprises (FOE) that are
captured by the decree. They are (i) a
company where equity is directly owned
by any foreign entity (F1 Co); (ii) a
company of which 51% or more of the
equity is owned by F1 Co (F2 Co); and a
company of which 51% or more of the
equity is owned by F1 Co and F2 Co.
Therefore, formally legitimizing existing
structures that have been put in place
consistent with the foreign investor
definition in the Law on Investment.
Decree 09 has substantially clawed back
the restrictions in Decree 23. Under
Decree 23, a FOE engaged in any export,
import, or distribution activities (including
wholesale and retail) was required to
obtain a trading license (even those with
a 1% foreign stake).
Decree 09 stipulates that a FOE must
obtain a trading license when engaging
in the following activities:
• import and wholesale of lubricant/oil-
based products;
• retail distribution activities;
About Asia Counsel
Asia Counsel is a dynamic international corporate and commercial law firm dedicated to serving clients in Vietnam. Our partners have over ten years of
experience in working on complex and challenging matters in Vietnam. We are committed to helping clients achieve their business strategies and providing
outstanding legal services.
If you have any questions on any of the items discussed above, please do not hesitate to contact us.
Christian Schaefer
Managing Partner
E christian@asia-counsel.com
Minh Duong
Partner
E minh@asia-counsel.com
Asia Counsel Vietnam Law Company Limited, Level 5, 18 HBT Building, 16-18 Hai Ba Trung Street, Ben Nghe Ward, District 1, Ho Chi Minh City

2. Retail and Distribution in Vietnam
February 2018
Consequently, such FOE will now be
required to submit a confirmation on
tax finalization, which is a more time
consuming process involving
obtaining confirmation from the tax
authorities.
Under Vietnam’s treaty commitments,
such as the WTO, they generally allow
foreign investors from member states
to engage in the provision of
sale/purchase of goods and related
activities based on certain conditions
and subject to obtaining a trading
license. Decree 09 now allows foreign
investors from non-member states to
engage in such activities on the same
conditions applicable to foreign
investors coming from member states,
subject to a further appraisal by the
licensing authorities on whether it will
create employment in Vietnam or
contribute to the State Budget, and
so on. However, these further
conditions are relatively vague and
give the licensing authorities broad
discretion to decide whether to grant
a trading license to such foreign
investors.
Timelines for Decisions
Decree 09, has reduced the
processing time for the DOIT and the
relevant authorities to issue their
decision on trading license
applications.
In particular, the DOIT must now
release its approval or refusal of the
application dossier for a trading
license within ten working days if an
approval of the MOIT is not required,
and within 28 working days if the
approval of the MOIT and other
relevant authorities are required.
ENT requirement
Unfortunately, under Decree 09 a
foreign investor wishing to establish a
a retail outlet beyond the first one
must still pass the Economic Needs
Test (ENT) – this has not changed. A
committee of representatives of the
local authorities, including those from
the Department of Planning and
Investment and the DOIT (ENT
Committee) will be established to
conduct the ENT assessment.
The authority will consider a number
of factors in the ENT, including (i) the
number of retail outlets, (ii) relevant
local market stability, (iii) impact of
the new retail outlet(s) on the stability
of the market, (iv) impact on
environment, and traffic, (v)
possibility of creating employment for
to Vietnamese people, (vi)
contribution to the State Budget.
Decree 09 exempts proposed retail
outlets that are less than 500 m2,
located in a commercial trading
center – though this exemption does
not apply to minimarts and
convenience stores. Decree 09 also
stipulates a more detailed timeline
for the ENT process, as follows: ENT
Committee to be established within 7
working days from receipt of the
request for its establishment; ENT
Committee to release its opinion
within 30 days from its establishment;
within 3 working days from the date
of receipt of the ENT opinion, the
DOIT will submit the application
together with the ENT evaluation
opinion to the MOIT for
consideration; finally, the MOIT must
release its opinion (approval/refusal)
on the application within ten working
days.
Licensing Authority and Term
of Trading License
Under Decree 09, the provincial
Departments of Industry and Trade
(DOIT) are now the licensing
authority to issue, amend, and
revoke trading licenses.
Nevertheless, for most sectors the
MOIT and the relevant authorities
must still first review such
application dossiers before the
relevant DOITs issue the new and
amended trading licenses to the
applicants. The DOITs may only
approve applications for
issue/amendment of a trading
license, without obtaining such
prior approval, for retail activities in
goods other than rice, sugar, video
records, books, newspapers and
magazines.
Decree 09 also permits the term of
a trading license to be unlimited,
except for certain limited cases
where the five-year cap still
applies (e.g. distribution of
lubricant/oil based products).
Conditions for Grant of a
Trading License
Decree 09 has also brought in
changes to the conditions for
issuance of a trading license for
FOEs. Under Decree 23, an FOE
that had been established for
more than one year was required
to submit tax declarations.
However, this has been replaced
by the condition that such FOE
must not have any outstanding tax
liabilities in Vietnam.