Procedures for Establishing an FDI Company Operating Milk Tea and Coffee Shops in Vietnam
The milk tea and coffee business in Vietnam is booming, attracting significant attention from foreign investors. With a young population, high consumer demand, and increasingly diverse culinary experiences, establishing an FDI company in this sector offers attractive business opportunities. However, to open milk tea or coffee shops under a foreign-invested model, investors must understand the legal regulations and procedures for establishing an FDI company in Vietnam.
Conditions for Establishing an FDI Company in the Milk Tea and Coffee Business
Before carrying out legal procedures, foreign investors must review regulatory conditions. The food and beverage (F&B) industry is not on the list of prohibited sectors, meaning investors are allowed to establish FDI companies. However, as operating milk tea and coffee shops falls within the F&B service industry, businesses are subject to food safety regulations and related laws.
Foreign investors must also consider ownership ratios. According to WTO commitments, the F&B service industry has no restrictions on foreign capital contributions, so investors may own 100% equity or form a joint venture with a Vietnamese partner. This provides a significant advantage for those planning to develop milk tea and coffee shop chains in Vietnam.
Application Dossier for Establishing an FDI Company
To establish an FDI company, investors must prepare two types of applications:
Investment Registration Certificate (IRC) – including project proposal, proof of financial capacity, investor’s legal documents (individual or corporate), confirmation of project site, and project objectives/scale explanation.
Enterprise Registration Certificate (ERC) – including company charter, list of members/shareholders, legal representative information, members’ legal documents, and other documents required by the Law on Enterprises.
Procedure for Establishing an FDI Company
The process involves several key steps:
Apply for the Investment Registration Certificate (IRC) at the Department of Planning and Investment where the company’s head office is located.
Submit the application for the Enterprise Registration Certificate (ERC) to officially establish the company.
After obtaining the ERC, the FDI company may make a company seal, open a bank account, and fulfill initial tax registration procedures.
Additionally, to operate milk tea and coffee shops, the company must obtain a Certificate of Food Safety and Hygiene. If alcoholic beverages are also sold, retail licenses for alcohol and beer consumption on site are required.
Notes on Business Lines and Locations
When establishing an FDI company, selecting the correct registered business lines is essential. Businesses should register F&B service codes (restaurants, cafés, beverage services) under Vietnam’s economic classification system. For franchise expansion, companies should also register franchise-related business activities.
Business locations must comply with fire safety, environmental sanitation, and distance requirements from sensitive areas (such as schools and hospitals) if alcohol is sold.
Tax and Financial Obligations
FDI companies in Vietnam must comply with tax regulations, including business license tax, VAT, corporate income tax, and personal income tax for employees. If franchising, intellectual property transfers, or brand licensing occur, additional taxes may apply.
Advantages and Opportunities
Vietnam’s beverage sector is one of the fastest-growing markets. Coffee, milk tea, and specialty drinks have become indispensable for the younger generation, creating vast opportunities for foreign investors to build brands, expand chains, and scale business models.
Legal Support Services
As legal procedures can be complex, many foreign investors face challenges entering the Vietnamese market. Professional legal consultants can help prepare and submit applications, register for tax, obtain food safety certificates, alcohol retail permits, and provide advice on labor, contracts, and franchising.
Establishing an FDI company in Vietnam’s milk tea and coffee sector offers great opportunities, but requires legal compliance and proper preparation.
Contact DEDICA Law Firm for expert legal consultation!
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