02 notes for investors who prepare for alcohol business in Vietnam

Alcohol (wine) business in Vietnam is attaching a lot of attention from domestic and foreign investors recently. BLawyers Vietnam would like to present some notes on this issue to domestic and foreign investors.

1. For domestic investors

Alcohol business is a conditional business line. Therefore, when investing in this business line, investors must meet certain conditions.

a. Regarding licensing and registration issues

To be able to produce and trade alcohol, depending on each purpose, an enterprise shall have the following types of permits: License to produce industrial alcohol; License to produce craft alcohol for business purposes; License for alcohol distribution; License for alcohol wholesaling; License for alcohol retailing; and License for sale of alcohol for on-premises consumption. Accordingly, based on the particular purpose, an enterprise can make different sets of dossiers to register for obtaining the proper license.

Of note, enterprises producing industrial alcohol, producing craft alcohol for business purposes, distributing alcohol, wholesaling alcohol and retailing alcohol with having at least 5.5% alcohol by volume (ABV) are required to obtain a license. At the same time, the enterprise selling alcohol with alcohol having at least 5.5% ABV for on-premises consumption and trading in an alcohol having less than 5.5% ABV are required to register their sale with the district-level Office of Economics or district-level Office of Economics and Infrastructure.

b. Regulations to comply

When enterprises trade in alcohol, it is necessary to pay attention to the provisions of the Law on prevention and control of harmful effects of alcoholic beverages 2019 and Law on Advertisement 2012.

In the process of distributing, wholesaling and retailing alcohol, enterprises must comply with the provisions of laws on food safety. Besides, for the enterprise established for the purpose of producing alcohol, in addition to the law on food safety, it is necessary to comply with the law on fire and environmental safety.

In case it is necessary to declare products, enterprises shall comply with the provisions of the law on food safety and other relevant legal documents.

2. For foreign investors

For foreign investors, in addition to meet the same conditions as domestic investors, foreign investors need to pay attention to international treaties that Vietnam is a signing member, such as Commitments to join the Word Trade Organization, Free Trade Agreements and Vietnam-Korea Free Trade Agreement, etc.

In addition, the establishment of a retail establishment (besides the first retail establishment) of a foreign-invested economic organization will be considered based on an economic needs test (ENT).

In summary, activities related to trading alcohol are very diverse, the enterprise may have to carry out many different procedures for certain activities. In addition, foreign investors and domestic investors need to pay attention to conditions when doing this business line in Vietnam.

Should you have any questions about the above contents, please revert to BLawyers Vietnam at consult@blawyersvn.com. We are more than happy to hear from you!

Date: 27 September 2022

Writer: Tuyen Pham

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