Investing In Vietnam - Trade

Following Vietnam’s accession to the WTO in 2007, the market was liberalized in certain areas, including the trading of goods.

Under Vietnamese law, the trading of goods by foreign invested enterprises covers the following areas:

“Right to import” refers to the right to import goods into Vietnam for sale to business entities that themselves have the right to distribute the goods in Vietnam. The import right does not include the right to organize or participate in the distribution of goods in Vietnam.

“Right to export” refers to the right to purchase goods in Vietnam for export. The export right does not include the right to organize a network of collecting and purchasing goods in Vietnam for export.

“Distribution right” means the right to directly undertake activities of distribution, consisting of:

• being an agent for the purchase and sale of goods

• wholesale distribution

• retail distribution

• franchising

Vietnamese enterprises are free to carry out trading activities in Vietnam and are permitted to directly export and import all goods, except for certain restricted goods where a special business license must be obtained from the relevant State authorities.

Foreign invested enterprises in Vietnam may directly distribute or set up distribution networks to sell the products they manufacture in Vietnam and may export their products directly. However, various sectors are still subject to restrictions.

In practice, as the Vietnamese government wishes to protect domestic distribution enterprises, retail distribution by foreign investors in Vietnam is still restricted and subject to an approval process. For more than one retail outlet, the approval must be considered by the licensing authorities based on an Economic Needs Test (“ENT”), which considers the following criteria:

• existing service suppliers in a particular geographic area

• stability of market

• geographic scale

In April 2013 the Ministry of Industry and Trade issued a new regulation which provides an exemption from the ENT procedures for retail outlets that are less than 500m2 in size and located in facilities constructed for the purpose of selling goods (although the establishment of such an outlet is still subject to approval of the licensing authority).

Source RSM Vietnam

(AGBT search)