Recently, a client of us wanted to do retailing of medical products (i.e. contact lenses, frames, glasses and accessories, etc.) to its patients. This is a foreign-invested clinic with its office in Ho Chi Minh City, Vietnam (hereinafter called as the “FIE“). Its patients often attend medical checks at its head office. The FIE applied for obtaining a trading license (also called as a business license or a trading permit) at the local Department of Trade and Industry (“DOIT“). However, such authority requested the FIE to add a dossier for obtaining concurrently a trading license and a retail outlet license. So, which case the local DOIT requires to apply a trading license only? And which case they requires both trading license and retail outlet license (for the first outlet)? This article will help you clarify this matter in case you have a plan to invest on retailing in Vietnam.
General legal requirements for both licenses
Vietnamese Government stipulated goods retail activity under Decree No. 09/2018/ND-CP dated 15 January 2018 (“Decree 09”). In which, the FIE must implement the procedure for obtaining two above licenses as follows:
To apply for a trading license, an application dossier shall include:
- An application for obtaining the trading license;
- An explanation about: (i) satisfaction of conditions for granting the trading license; (ii) business plan; (iii) financial plan; (iv) status of business on goods sale and purchase and activities directly relating to the goods sale and purchase; and (v) financial status of the foreign-invested company as at the date applying for the trading license;
- A document from local Tax authority on confirmation of no outstanding tax debt; and
- A copy of the enterprise registration certificate and investment registration certificate .
When applying for a retail outlet license concurrent with the trading license, beyond the documents as mentioned above, the FIE must submit an explanation on the outlet establishment. As such, it must clearly present: (i) location of the outlet; (ii) business plan to be implemented at retail outlet; and (iii) financial plan for setting up retail outlet.
Timeline for settling application dossiers and competent authorities
Timeline for issuing a trading license is about 10 working days from the date the FIE submitted all required documents. The competent authority is the local DOIT.
For a retail outlet license, Ministry of Industry and Trade could give its “green light” before the local DOIT shall issue such license to the FIE. The total timeline is at least 20 working days from the date the FIE submitted all required documents.
When the FIE firstly applied for the trading license, the local DOIT issued a notice on rejection of the submitted dossier. The reason was they found that the FIE had retail activities at its head office (i.e. after doctors checked patients and consulted them, patients would directly buy medical items at the clinic office). Thus, the FIE must establish a retail outlet with a specific plan for outlet establishment. According to the local DOIT’s guidance, the FIE should submit both dossiers for a trading license and a retail outlet license oat the same time. In addition, for this case, the application dossier of retail outlet license is the one of the grounds for DOIT to grant the trading license.
Why? The local DOIT considered whether the FIE directly sells goods to end-users at its head office. Although the FIE planned to support patients by click-and-buy methods (and then the clinic would deliver the purchased items via services of Grab, Goviet, etc.), the local authority still realized that it was not reasonable because patients often go to see doctors before buying any medical items.
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