Updated at 18/12/2022 - 05:29 pm
Foreign-invested enterprises that conduct business in the line of "Exercise the right to retail distribution (not establish retail establishments) of goods with code ..." need to apply for a retail business license.
The following article provides guidance on applying for a retail business license for foreign-invested enterprises.
Pursuant to: Decree No. 09/2018/ND-CP on goods purchase and sale activities and activities directly related to the sale and purchase of goods of foreign investors and economic organizations with investment capital. foreigners in Vietnam.
Accordingly, business licenses are granted to foreign-invested economic organizations exercise the right to retail distribution of goods
How do foreign-invested enterprises need to apply for a retail business license? #
To answer the question of how much foreign-invested enterprises need to apply for a retail business license, it is necessary to clarify the definition:
What is a foreign-invested economic organization? #
According to the Investment Law:Foreign-invested economic organization means an economic organization with foreign investors are members or shareholders"
“Foreign investor means an individual with foreign nationality or an organization established under foreign law that conducts business investment activities in Vietnam”
Therefore, if a foreign investor has a capital contribution in an economic organization, regardless of the percentage of capital, that economic organization is also considered a foreign-invested economic organization.
What percentage of foreign investment is required to apply for a retail business license? #
Pursuant to Clause a, Point 1, Article 5 of Decree 09/2018/ND-CP:
"first. Business licenses are granted to foreign-invested economic organizations to carry out the following activities:
a) Exercise the right to retail distribution of goods, excluding the goods specified at Point c, Clause 4, Article 9 of this Decree;”
Therefore, a foreign-invested economic organization (all foreign-owned capital) that conducts retail business must apply for a retail business license.
What does the regulation on foreign capital account for over 50% mean in applying for a retail business license? #
Not all cases when foreign investors invest in Vietnam have to carry out investment procedures in accordance with regulations applicable to foreign investors, which depends on the capital holding ratio will govern this issue.
If the economic organization does not fall into the following cases:
a) There is a foreign investor holding more than 50% of the charter capital or the majority of general partners are foreign individuals, for economic organizations being a partnership;
b) Having an economic organization specified at Point a above holding more than 50% of charter capital;
c) There are foreign investors and economic organizations specified in point a above holding more than 50% of charter capital.
Then comply with investment conditions and procedures as prescribed for domestic investors when investing in establishing other economic organizations; investment in the form of capital contribution, share purchase, purchase of capital contributions of other economic organizations; investment in the form of BCC contract;
=> Means if the capital contribution of: Foreign investors or economic organizations with foreign investors (foreign investors hold more than 50% of capital) or economic organizations with foreign investors (foreign investors hold more than 50% of capital) 50% of capital) and foreign investors hold XNUMX% or less, then implement investment conditions and procedures like domestic investors.
Regulations on Retail Business License are not Investment procedures which is Business conditions, hence the provisions for Foreign-invested economic organizations.
Refer to the Government Newspaper's reply on this issue here:
Penalties for not applying for a retail business license #
Fine from 10.000.000 VND to 15.000.000 VND for one of the following violations: “Trading in goods and services in conditional business lines and industries without having a business license as prescribed;"
Currently, the State strengthens sanctions as well as the inspection of compliance with regulations of enterprises throughout the country, including Vietnamese enterprises and especially foreign enterprises. Therefore, the level of sanction is getting higher and higher, so foreign investors and businesses should comply with regulations to avoid being sanctioned by inspectors.
- Law on Investment from 2020: effective from January 01, 01;
- Decree 09/2018: effective from 15/01/2018;
- Decree 98/2020/ND-CP: effective from October 15, 10;