Case Study No. 9 | Legal Advice on Large-Format Retail Expansion and License Acquisition by a Japanese-Affiliated Company in Vietnam

NEXORA LAWFIRM has extensive experience supporting Japanese-affiliated companies entering the Vietnamese market, and in particular provides one-stop support for license acquisition, store-opening scheme design, and compliance with foreign-investment restrictions in the retail and service sectors. In this case study, we present a concrete example of the legal analysis and administrative procedures required when a major Japanese retail brand seeks to open multiple stores in Vietnam. For readers interested in topics such as "foreign-invested retail licenses in Vietnam," "how to obtain a license to open a store," "documents required beyond the ERC and IRC," "foreign investment restrictions on commercial activity in Vietnam," and "risks and responses for Japanese companies opening stores," this article uses a real example to explain, in an accessible way, the legal points to note and practical measures for expanding a retail business in Vietnam.

01 - Overview of the Case

Company XXX (100% Japanese-owned) is planning to open large-format retail stores, each exceeding 500 square meters in floor area, inside shopping malls across Vietnam.

In connection with this project, the firm was consulted on the following legal points.

Permits and registrations required for a foreign-invested company to enter the retail business
The treatment of the Economic Needs Test (ENT) for the second and subsequent retail stores
The various licenses required to operate a retail store
Legal points to note when operating an e-commerce website (including personal data protection)

02 - Legal Advice from the Attorney

▶ Issue ①: Basic Conditions for Retail Expansion and Required Registrations

Even a 100% foreign-owned company may operate a retail business independently in Vietnam (a joint venture with a local company is not required).
Retail goods may be either imported products or products sourced domestically within Vietnam.

✅Summary of Required Registrations and Licenses

Activity

Required Procedure

Points to Note

Retail sales

Retail business line registration (IRC/ERC) + Retail License (Trading Rights Certificate / TRC)

Retail business registration and the retail license are both mandatory

Wholesale (B2B) sales

Wholesale business line registration only (no license required)

Certain goods, such as petroleum and rice, are exceptions

Delivery services

Road freight transport business line registration

Subject to foreign-ownership restrictions (49% cap + joint venture required)

Import/export activities

IRC registration only (no business line registration required)

Must be explicitly stated

✅Recommended Approach for Delivery Operations

We recommend either:

Cooperating with a local delivery provider through a BCC (Business Cooperation Contract), or
Using an outsourced delivery model (where the delivery company collects the delivery fee directly from the customer).

▶ Points to Note in Obtaining the Retail License (TRC)

Operating a retail store requires obtaining a Retail License (TRC) from the Department of Industry and Trade with jurisdiction over the store's location.
The license must be obtained separately for each product category sold (by HS code), and unregistered products may not be sold.

✅Points to Note When Applying

Because obtaining the license typically takes several months, it is important to plan the application timeline by working backward from the intended store-opening date.
We recommend registering the HS codes for products planned for future sale as well, in a single batch.
Demonstrating consideration for local sourcing ratios (local content) during the retail license review can be key to a smoother approval process.

▶ Issue ③: Store-Opening Permits for the Second and Subsequent Stores, and the Economic Needs Test (ENT)

In principle, an ENT is required to open a second or subsequent retail store.
Exception: No ENT is required if the store is under 500 square meters, located within a shopping mall, and is not a convenience store or mini-supermarket.

✅ENT Exemption Under the CPTPP

Vietnam is a member of the CPTPP, and as of January 14, 2024, the ENT requirement for companies from member countries has, in principle, been abolished.
In practice, however, as long as detailed domestic implementing rules have not been established in Vietnam, there remains a high likelihood that the ENT procedure will still be required (based on inquiries with the Department of Industry and Trade).

✅Recommended Strategy

For plans to open a second or subsequent store, consult in advance with the Department of Industry and Trade to carefully confirm whether an ENT exemption is available.
Where necessary, prepare market research materials and a report on the store's contribution to the local economy, in readiness for an ENT review.

▶ Issue ④: Registration for E-Commerce Website Operation and Personal Data Protection

Where products are sold through the company's own website, a notification of website operation (e-commerce notification) must be filed with the Department of Industry and Trade.
In addition, where customer information (name, address, telephone number, etc.) is collected via the e-commerce site, compliance with Decree No. 13/2023/ND-CP on personal data protection is required.

✅Key Actions Required

Completing the website registration notification with the Department of Industry and Trade before launching the e-commerce site
Displaying clear consent language on the site regarding the collection of personal information
Formulating and publishing a privacy policy that specifies the management, purpose of use, and retention period of customer data

◆Conclusion and Recommended Course of Action◆

For Company XXX to smoothly expand its large-format retail business in Vietnam, it will be necessary to comprehensively implement the following measures.

Item

Recommended Action

Retail business registration and license acquisition

IRC/ERC business line registration + retail license application

Delivery scheme arrangement

Adopting a BCC contract or an outsourced delivery model

Planning for the second and subsequent stores

Confirming ENT exemption + preparing market justification materials

E-commerce related registration

E-commerce site notification + privacy policy preparation

Monitoring ENT policy developments

Following up on the domestic implementation status of the CPTPP