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V
IETNAM
B
RIEFING
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December 2014
If a business wishes to engage in import and export activities as
well as domestic distribution (i.e., retail, wholesale, and franchising
trade activities) in Vietnam, the most common method chosen is
establishing a trading company.
Generally, a trading company is inexpensive to establish and can be
of great assistance to foreign investors by combining both sourcing
and quality control activities with purchasing and export facilities,
thus providing more control and quicker reaction times compared
to sourcing purely while based overseas.
Trading companies are also the ideal choice for foreign companies
that need to source inVietnam in order to resell inVietnam. Without
aVietnamese trading company, the alternativewould be to buy from
overseas, and have the goods shipped out of Vietnam before then
reselling back intoVietnamvia local distributors (which wouldmean
additional logistical costs, customs duties, and VAT).
Trading and distribution is still a sensitive sector for foreign investors.
Therefore, the licensing process can vary 4-6 months from the date
of submitting the application dossier to the licensing authority, until
the Investment Certificate can be issued.
To set up a trading company (distribution company) without a
retailing outlet or a trading company with its first retailing outlet,
the investor must prepare an application dossier to apply for an
Investment Certificate and submit to the licensing authority at the
provincial level. The application dossiers after that will be submitted
by the provincial licensing authority to the Ministry of Industry and
Trade (MOIT) for approval. Once receiving the approval by MOIT, the
provincial licensing authority will grant the Investment Certificate
to the investors. In case the licensed foreign trading company want
to have a second retailing outlet or more, they will be required to
complete the procedure for setting up a retail establishment.
Under World Trade Organization (WTO) commitments, around 95
percent of goods can be distributed by businesses that are 100
percent foreign owned. For certain types of investment projects, such
as those that are deemed to have a significant impact on Vietnam’s
national policies, environment, etc., the government must issue an
official investment policy on the project.
Relevant Applications
The application for the Investment Certificate must contain the
following documents:
1. Application letter
2. Copy of Identity Card/Passport of individual; Copy of Business
License or other equivalent documents
3. Investment analysis with the following contents: information of
investors, target of investment, scale of investment, investment
capital and planning of capital contribution, location, duration,
schedule of investment, labor demand, investment incentives,
impact assessment, economic-social efficiency of the project
4. A copy of one of the following documents: financial statements
from the investors for the two most recent years; commitment of
financial support by the parent company; commitment of financial
support from a financial institution; guarantee of the financial
capacity of the investors; bank reference letters explaining the
financial capacity of the investors
5. Proposal for land use or copy of land leasing contract/office
leasing contract
6. Business Cooperation Contract (BCC) for projects invested under
a BCC contract
How to Establish a Trading
Company in Vietnam
– By
Hoang Thu Huyen and Edward Barbour-Lacey , HCMC Office
Other
Customers
Trading
Company
HQ
Vietnam
Customers
Overseas
Vietnam
Can provide
service & receive
payment in
foreign currency