A foreign-invested economic institution must carry out procedures in order to get a business license or a license for setting up wholesale or retail establishments if it wishes to conduct goods purchase and sale and other relevant activities for commercial purposes in Vietnam.
Such is highlighted in a decree drafted by the Ministry of Industry and Trade to detail the Commercial Law regarding goods purchase and sale and other related activities of foreign-invested economic institutions in Vietnam.
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| A foreign-invested economic institution would have to conduct procedures to get a business license__Photo: Internet |
To obtain a business license, a foreign-invested economic institution must have foreign investor(s) coming from the country or territory that has accessed to a treaty of which Vietnam is a member and under which the country has market opening commitments on goods purchase and sale and other related activities. It must also meet the conditions on market access restrictions provided in treaties to which Vietnam is a signatory.
This institution must possess a license for operating in the fields subject to licensing as required by the law of the country or territory where the institution registers its nationality or establishment, and an enterprise registration certificate, investment certificate, investment license or establishment registration certificate.
In addition, the foreign-invested economic institution is required to have financial resources sufficient for its business activities.
Specifically, financial sources will be determined on the basis of the charter capital, investment capital or business capital, respectively, for foreign-invested economic institutions set up for less than one year which are companies, cooperatives or unions of cooperatives; private enterprises; or other institutions conducting business investment activities.
For foreign-invested economic institutions set up for one year or more, their financial capacity will be assessed based on their fulfillment of the obligation to pay corporate income tax and other taxes and perform other financial obligations toward the Vietnamese State. If having suffered losses for three consecutive years by the time of applying for a license, such an institution must have appropriate capital offsetting solutions.
Moreover, this institution must have competence and experience in goods purchase and sale and other relevant activities and gain approval from competent agencies, in order to be licensed.
The draft also sets out six conditions for a foreign-invested economic institution to receive a license for setting up a wholesale or retail establishment. First, the institution possesses a business license; second, to-be-traded commodity items comply with the licensed distribution rights; third, the establishment’s location complies with the relevant local master plan; fourth, the institution has adequate financial capacity; fifth, the institution obtains an appraisal council’s approval for setting up more than one retail establishment; and finally, such setting-up is approved by a competent state agency.- (VLLF)
