Many FDI enterprises wonder whether retailing goods directly at their headquarters requires a license. The following article by DNP Vietnam Law Firm clarifies the legal provisions, distinguishes between related licenses, and highlights the cases exempt from licensing requirements, helping businesses proactively manage their operations in Vietnam.
1. What is Retail?
According to Clause 7, Article 3 of Decree No. 09/2018/ND-CP:
“Retail means the sale of goods to individuals, households, and other organizations for consumption purposes.”
Therefore, any activity where an FDI enterprise directly supplies goods to consumers in Vietnam is considered retail, regardless of whether it takes place at the head office or another location.
2. Distinguishing Between a Business License and a Retail Outlet Establishment License
| Criteria | Business License | Retail Outlet Establishment License |
| Definition | A license issued by a competent state authority allowing an enterprise or organization to conduct business in a specific industry or sector under the law. | A license granted to an enterprise, organization, or individual to establish and operate one or more retail outlets at fixed locations. |
| Purpose | – Confirms legal eligibility to operate a business. – Applies to activities such as retail, wholesale, services, manufacturing, etc. | – Confirms legal eligibility to open and operate retail outlets. – Ensures lawful retail activities that comply with legal regulations. |
| Scope | – Aligns with the business lines registered in the Enterprise Registration Certificate or Business License. | – Applies only to the opening and operation of fixed-location retail outlets. – Does not cover all business activities of the enterprise. |
3. Do FDI Enterprises Need a License to Conduct Retail at Their Headquarters?
According to Clause 2, Article 5 of Decree No. 09/2018/ND-CP:
“The retail outlet establishment license is issued to foreign-invested economic organizations to establish retail outlets.”
If an FDI enterprise wishes to conduct retail sales at its headquarters, it must obtain a Retail Outlet Establishment License. This license is granted after the enterprise has obtained a Business License. If the head office is the first retail location of the enterprise, it may apply for both the Business License and the Retail Outlet Establishment License at the same time.
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4. Conditions for FDI Enterprises to Be Licensed for Retail Activities
According to Point c, Clause 1 and Clause 2, Article 5 of Decree No. 09/2018/ND-CP, before engaging in retail distribution through retail outlets, FDI enterprises must first obtain a Business License, and then apply for a Retail Outlet Establishment License.
According to Article 22 of Decree No. 09/2018/ND-CP, the conditions for establishing a retail outlet are as follows:
(i) For the first retail outlet:
- The enterprise must have a financial plan for establishing the outlet.
- It must not have overdue tax debts if it has operated in Vietnam for at least one year.
- The retail location must comply with relevant local zoning and planning regulations.
(ii) For outlets beyond the first:
- If the outlet is exempt from the Economic Needs Test (ENT), it must still meet the conditions under point (i).
- If the outlet is subject to the ENT, it must additionally satisfy the criteria specified in Clause 2, Article 23 of Decree No. 09/2018/ND-CP.
5. Cases Where a Retail Outlet Establishment License Is Not Required
If the goods are produced in Vietnam by the foreign-invested enterprise itself, and retail, wholesale, or distribution is part of its registered investment objectives or project, then these activities do not fall under the scope of Decree No. 09/2018/ND-CP.
However, if the goods fall under the list of conditional business lines, the enterprise must still fulfill the conditions required by specialized legal regulations.
Conclusion, to retail goods at a headquarters or fixed location, an FDI enterprise must obtain a Retail Outlet Establishment License, unless the sales activities are conducted through non-fixed-location methods such as online platforms or e-commerce marketplaces.
The information above is for reference only. If you require further details, please contact us using the information below.
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