In the context of Vietnam’s economy integrating more deeply, the retail and distribution sector has become an attractive destination for foreign direct investment (FDI) enterprises. However, to operate effectively and legally in this field, foreign investors need to pay special attention to changes in the current legal framework. The new regulations not only affect company establishment but also directly impact operations, expansion of distribution chains, business licensing, and market share control. Understanding these regulations is the first step for FDI enterprises to ensure compliance with the law and sustainable development in Vietnam.

What should FDI enterprises in retail take note of?

The Vietnamese retail market is no longer out of the radar of international “major players.” But unlike domestic businesses, foreign-invested enterprises participating in this field need to satisfy additional specialized legal requirements.

Business licenses and regulated sectors

One of the first points to note is that activities in retail and distribution of goods belong to sectors that have special conditions for foreign investors. Therefore, besides the Investment Registration Certificate and Enterprise Registration Certificate, FDI enterprises must also obtain a Business License if they engage in retail distribution, especially for goods not exempted under WTO commitments. In addition, opening a second or subsequent retail location must comply with the “Economic Needs Test” (ENT) requirement, which is a prominent regulation that makes many investors face difficulties when expanding retail chains. ENT requires businesses to demonstrate the necessity of the new retail outlet through assessments of retail density, geographic distance, impact on the business environment, and management capacity.

Capital conditions and investment form

Although Vietnamese law does not stipulate a minimum capital for retail and distribution activities, in practice, when dealing with licensing authorities, investors need to prove financial capacity commensurate with the scale of business registered. Besides, the most common investment form remains setting up a one-member or multi-member limited liability company with foreign investment capital. Some foreign enterprises choose to contribute capital or acquire equity in an existing domestic retail company to shorten procedural time and leverage existing networks. However, this approach also carries legal risks related to tax obligations, transfer of ownership, and changes in licensing.

Product management and compliance with goods standards

When participating in distribution chains in Vietnam, FDI enterprises need to especially pay attention to compliance with goods standards, labeling, origin, and industry-specific regulations (e.g. food, cosmetics, electronics…). Small violations in labeling or missing conformity certification can lead to administrative penalties, suspension of circulation, or product recalls. Moreover, FDI enterprises are obligated to fully register tax identification numbers, declare VAT, corporate income tax, and other taxes/fees related to commercial operations.

Expert advice: legal solutions to help FDI enterprises stand firm in retail

Deploying investment in retail is not only a matter of capital or business model but also requires a correct legal strategy and long-term companionship.

Standardize legal documents from the start

The first advice experts at DEDICA often give FDI enterprises is to build a clear investment structure, prepare complete and reasonable legal documents from the beginning to minimize the risk of being asked by state authorities to supplement or amend many times. Choosing the correct business sector, drafting the charter and dividing members’ rights clearly are crucial factors for stable operations.

Monitor new policies and legal fluctuations closely

Vietnam’s legal system is continuously updated, especially in sensitive fields like goods distribution. Therefore, regularly following new circulars, decrees or internal guidance from ministries and sectors is extremely necessary. That is why many FDI enterprises choose to outsource legal services to get specialized, timely support and reduce compliance pressure.

Resolve conflicts and protect rights in commercial transactions

In the highly competitive environment of retail, trade disputes such as delayed payments, contract violation or unfair competition can happen at any time. DEDICA regularly supports FDI clients to resolve these conflicts through negotiation, mediation or litigation in courts/arbitration — always aiming to protect the maximum interests and brand reputation for the client.

Strategic collaboration and ensuring multi-field compliance

Retail is no longer simply selling products, but relates to logistics, data protection, e‑commerce, intellectual property… Each factor is a link that can bring legal consequences if the enterprise does not control them well. Having a legal partner like DEDICA accompany in the long run will help the enterprise build a solid legal foundation and avoid “stumbling” on its development journey in Vietnam.

With rich experience in supporting foreign investors, DEDICA understands every “corner” in Vietnam’s laws on retail and distribution. We not only help investors obtain licenses but also accompany enterprises in all legal matters — from strategic advice to dispute resolution. If you are an FDI enterprise operating or planning to operate in retail, let DEDICA become your reliable legal companion.

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