FOREIGN FIRMS MAY BE PERMITTED TO OPEN 500 SQ M RETAIL OUTLETS IN VIETNAM

Foreign-invested enterprises (FIEs) with distribution rights will be able to open retail outlets of up to 500 sq m under a draft decree clarifying the trading of goods by FIEs under the Commercial Law.

Convenience stores predicted to develop quickly if draft decree comes into being.

The Ministry of Industry and Trade (MoIT) is collecting opinions on FIEs establishing such outlets or outlets in planned areas for retailing goods made overseas without the need to conduct an Economic Needs Test (ENT).

If the draft decree comes into effect, distributors and foreign investors will have the right to open outlets of less than 500 sq m without needing an ENT from the local city or province.

By limiting outlets to less than 500 sq m, retailers will not be able to develop such outlets into supermarkets or shopping malls.

If it comes into effect the decree will create favorable conditions for the development of convenience stores that open 24/7, which have developed quickly in Vietnam over recent times.

MoIT will also release a stipulation that when FIEs establish their firstwholesale or retail outlet they must have a license. Economic organizations can only sign contracts for building or leasing retailoutlets after gaining a license for a retail outlet.

Such licenses have a term of five years but MoIT can consider and provide an extension on a case-by-case basis.

Source: VN Economic Times