[Legal Update] "Vietnam’s Evolving Commercial Landscape: Insights from the Draft Decree on Foreign Trading Activities"

Vietnam’s Evolving Commercial Landscape: Insights from the Draft Decree on Foreign Trading Activities

January 15, 2026

Vietnam stands out as one of Southeast Asia’s most dynamic markets, characterized by a young, tech-savvy population and a rapidly developing economy. For years, the retail and distribution channel have been magnets for foreign direct investment. Opportunities are now expanding beyond traditional distribution channels into sophisticated trading and service sectors such as e-commerce and commercial intermediation.

Recently, the Vietnamese Government introduced a new Draft Decree to replace Decree 09/2018/ND-CP, serving as the primary guideline for foreign investors^*1and foreign-invested economic organizations^*2(FIEOs) entering or expanding in Vietnam’s trading sector. The regulatory focus is shifting from simple market access to sophisticated management of retail density and digital sovereignty.

This note summarizes the key legal insights and operational requirements under the Draft Decree, in the version published by the Ministry of Justice on 3 November 2025^*3.

1. OVERVIEW

The Draft Decree constitutes a significant restructuring of Vietnam’s commercial investment landscape, designed to harmonize domestic law with international treaty commitments while addressing emerging economic security imperatives. Longstanding market entry barriers—most notably the Economic Needs Test (ENT) and mandatory ministry-level consultations—for investors hailing from jurisdictions with high-standard trade agreements such as the CPTPP, ATISA and EVFTA are effetively abolished. Concurrently, it establishes a robust National Security Review mechanism, imposing heightened scrutiny on market-dominant companies in the e-commerce and large-scale retail sectors.

2. KEY CHANGES

i. Preferential Market Access for Treaty-Based Investors

To align with Vietnam’s commitments under relevant international treaties, the Draft Decree represents a significant improvement for investors from jurisdictions with specific trade commitments, such as investors from ASEAN (ATISA/AFAS), the EU (EVFTA), UK (UKVFTA), Singapore/Japan/Canada/Australia (CPTPP) (“Treaty-Based Investors”) by effectively removing longstanding foreign market entry barriers.

Elimination of the Economic Needs Test (“ENT”)

ENT has been always the most challenging non-tariff barrier for the retail business. The Draft Decree proposes to abolish ENT for Treaty-Based Investors. This allows for rapid, scalable chain expansion without the existing 3–6-month council review per new store.

Removal of Ministry of Industry and Trade Consultation

Currently, an "in-principle" approval from the Ministry of Industry and Trade (MOIT) is a prerequisite for the issuance of a Trading License and Retail Outlet License, a step that often adds months and uncertainty to the licensing timeline.

The Draft Decree eliminates this strict requirement, allowing for direct issuance based on treaty terms. This "Direct-to-Province" route is expected to slash the retail expansion timeline by 20-30%.

Superior License Longevity:

For Treaty-Based Investors, the Trading License validity typically matches the project lifespan (often 50 years or indefinite). This avoids the strict 5-year cap and frequent renewal burdens applicable to non-Treaty-Based Investors, providing long-term operational stability.

ii. National Security Review

A National Security Review mechanism is newly introduced whereby formal consultation with the Ministry of Public Security (MPS) and Ministry of National Defense (MND) will be triggered in specific scenarios:

E-commerce Dominance: The foreign investor controls a business listed among the top 5 dominant e-commerce platforms in Vietnam.
Large-Scale Retail Chains: Physical expansion triggers a security review once a "critical mass" is reached, specifically for requests involving:
- 100 small stores (area of less than 500m² each or more, or/and
- 50 medium stores (are from 500m²–5,000m² each) or more, or/and
- 30+ large outlet (area exceeding 5,000m² each) or more.
Non-Treaty-Based Investors: When foreign investors coming from countries without market-access treaties with Vietnam.

iii. “Anti-Switching" Rule

Free-market entry granted under the Draft Decree is attached in personam to the qualifying investor, not in rem to the retail business. Consequently, if a Treaty-Based Investor transfers ownership to a non-Treaty-Based Investor, the Trading License must be re-applied for, and the privileges (e.g. ENT exemption) are effectively revoked.

iv. Investment registration certificates are required for establishment of large-retail stores

For retail stores exceeding 500 square meters, an Investment Registration Certificate (IRC) shall be required prior to the application for a Retail Outlet License (but a Branch/Location Registration certificate is sufficient for establishment of the other retail stores). While the Law on Investment 2020 (and newer version of 2025) does not explicitly mandate an IRC for said retail store establishment, the Draft Decree appears to introduce this requirement for larger stores — a notable change in licensing obligations and procedures.

v. Transitional Grace Period Following M&A

When a domestic company becomes subject to the Trading License and/or Retail Outlet License requirements as result of a merger or acquisition transaction, it is granted a transitional grace period of twelve (12) months from the transaction completion date. During this period, the company may continue its existing operations without interruption. This transitional mechanism is intended to ensure regulatory continuity and mitigate business disruption while allowing investors sufficient time to complete post-closing licensing formalities.

3. THE LICENSING REGIME

Entering the retail, commercial leasing etc. market requires navigating a dual-licensing system depending on the business model. The table below sets out the key terms of the Trading License and the Retail Outlet License to help foreign investors navigate the dual-licensing requirement.

Feature	Trading License	Retail Outlet License
License overview	The Trading License serves as the primary regulatory “passport” for FIEOs engaging in retail distribution and commercial business services in Vietnam.	The Retail Outlet License is a specific permit required for the establishment of each individual physical retail outlet.
Trigger Event	When FIEOs engage in: retail distribution, import and/or wholesale rights over lubricants, and greases, E-commerce, Logistics (unless otherwise permitted under an applicable international treat). Goods leasing (excluding financial leasing). Commercial promotion and/or intermediary services. Tendering services	A Retail Outlet License is required upon the establishment of a physical retail outlet in one of the following forms: Convenience Store: Floor area of less than 300m², primarily offering fast-moving consumer goods; Mini Supermarket: Floor area of less than 500 m², focusing on food, beverages, and consumer goods; Supermarket: Floor area exceeding 500 m², offering a diversified range of goods; or Shopping mall: A large-scale commercial complex duly licensed under the laws on investment and construction.
Conditions, applicable to Treaty-Based Investors	Compliance with market access commitments (CPTPP, EVFTA, etc.) No overdue tax debts (if established over 1 year).	No overdue tax debts (if established over 1 year). Compliance with regional master planning and safety regulations, i.e. land, construction, firefighting, transportation and environmental hygiene. The foregoing requirements are hereinafter collectively referred to as the “Retail General Conditions”
Conditions, applicable to Non-Treaty-Based Investors	Local Competition Test:The proposed investment must be consistent with the domestic competitive landscape. Labor Commitments: Joint ventures with foreign ownership of 50% or more must commit to employing at least 100 Vietnamese employees. Wholly foreign-owned enterprises must commit to employing at least 300 Vietnamese employees.	Satisfaction of the Retail General Conditions. Economic Needs Test (ENT): Applicable from the establishment of the second retail outlet onward, based on: Local market stability, including the impact on existing retailers and traditional markets. Market necessity, including demand and capacity. Socio-economic contribution, including modernization of the retail sector and improvement of local living conditions. Geographical assessment scope: Retail outlets not exceeding 5,000 m²: assessed at ward level; Retail outlets exceeding 5,000 m²: assessed at provincial/city level.
Conditions applicable to investment in Non-Committed Sectors^*4	No overdue tax liabilities (if established for over 1 year); Local Competition Test: as set out above.	Not applicable
Conditions applicable to trading of Non-Committed Goods	Lubricants & Grease: Import and/or wholesale rights are generally restricted to the FIEOs licensed to manufacture such products in Vietnam or those distributing machinery requiring their use. Rice, Cane and Beet Sugar, recorded items; books, newspapers, and magazines: Retail distribution is generally restricted to supermarkets, mini-supermarkets, and convenience stores	Not applicable
Licensing requirements in M&A Transactions	The Trading License and Retail Outlet License requirements apply to domestic companies that, as result of an M&A transaction, become FIEOs or a company in which more than 50% of the charter capital is held by: One or more foreign investors; An economic organization with more than 50% foreign ownership; or A combination thereof.
Term of the License	Treaty-Based Investors: Matches the term of the Enterprise Registration Certificate (indefinite/long-term). Non-Treaty-Based Investors/ Non-Committed Goods and Non-Committed Sectors: 5 years and renewable	General Goods: Aligns with the lease term of the outlet premises or the Investment Registration Certificate duration, whichever is shorter Special Goods (rice, cane and beet sugar, recorded items; books, newspapers, and magazines): 5 years or the term regulated on the Trading License, whichever is shorter.
Application documents	Application Request Form. Explanatory Statement covering fulfillment of investment conditions, 5-Year Business Plan, and trading status report (if applicable). Tax clearance certificate issued within the prior 6 months. Copy of ERC, IRC or equivalent license.	Application Request Form. Explanatory statement covering store scale & timeline, 5-year business plan and 5-year financial plan. Tax clearance certificate. ENT Explanation, if applicable Copy of: For retail outlets with a floor area of 500 square meters or less: the Enterprise Registration Certificate, the Trading License, and the relevant Branch or Business Location Registration Certificate. For retail outlets with a floor area exceeding 500 square meters: all the foregoing, together with an Investment Registration Certificate.
Licensing Sequence & Timeline	1. Completeness Check by local authority: within 3 working days. 2. Conditions Review by the local authority: within 10 working days. 3. Security Review (if applicable): within 14 working days. 4. Final Issuance: Immediately after completion of the Conditions Review or within 3 working days after completion of any Security Review. (Periods 1. – 3. are consecutive.)	A. ENT-Exemption Cases 1. Completeness check by the local authority: within 3 working days. 2. Conditions Review by the local authority: within 5 working days. 3. Security Review (if applicable): within 14 working days. 4. Final Issuance: Immediately after completion of the Conditions Review, or within 3 working days following completion of any Security Review. (Periods 1. – 3. are consecutive.) B. ENT- Applicable Case 1. Completeness check by the local authority: within 3 working days. 2. Conditions Review by the local authority: within 5 working days. 3. Security Review (if applicable): within 14 working days 4. ENT review: within 20 working days 5. Final Issuance: 05 working days following completion of the ENT review or the ENT review together with the security review.
Issuing Authority	The Provincial People’s Committee, typically acting through the Department of Industry and Trade

4. CONCLUSION

The Draft Decree signals the end of the "one-size-fits-all" approach to foreign investment in Vietnam, ushering in an era where speed and scale are determined strictly by treaty nationality and security sensitivity. Treaty-Based Investors can benefit from faster and more predictable market access, but must strategically manage licensing structures, expansion thresholds, and transaction planning to mitigate regulatory and execution risks.

*1 “Foreign investor” is not defined under Decree 09, the Draft Decree or Commercial Law, hence, the following definition of “foreign investor” under the Investment Law is generally referred when interpreting and applying Decree 09 and the Draft Decree.
Foreign investor means an individual with foreign nationality or an organization established in accordance with foreign law conducting business investment activities in Vietnam.

*2 For the same reason above, the following definition of “Economic organization with foreign investment capital” under the Investment Law is generally referred to when interpreting and applying Decree 09 and the Draft Decree regarding “Foreign-invested economic organizations”.
“Foreign-invested economic organizations” or “Economic organization with foreign investment capital” means an economic organization with a foreign investor being a member or shareholder.

*3 Draft Decree on Foreign Trading Activities, published by the Ministry of Justice on 3 November 2025, available at the Ministry of Justice’s official website: https://www.moj.gov.vn/qt/tintuc/Pages/chi-dao-dieu-hanh.aspx?ItemID=5434 (last accessed by Atsumi & Sakai Vietnam on 2 January 2026).

*4 Non-Committed Sectors include:
　- E-commerce,
　- Logistics (except for permitted items under international treaty).
　- Goods leasing (excluding financial leasing).
　- Commercial promotion services (marketing, trade fairs).
　- Commercial intermediary services (agency, brokerage).
　- Tendering services