Setting up a foreign-owned restaurant in Vietnam

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The Vietnamese market would be an ideal place for investors wishing to earn profits in the area of culinary, particularly the food and beverage industry. In Vietnam, foreign investors can be optional in picking their types of restaurants, i.e. a brassier, a bistro, a pizzeria, or a fast food restaurant. The process of launching a restaurant will comprise different stages from picking a niche, brainstorming a business plan, finding a venue, and registering the restaurant with State authorities. In this article, ALB & Partners would like to point out what to know and expect at each step throughout the stage of registering a foreign-invested restaurant in Vietnam.

I. Applying for the investment registration certificate (“IRC”)

Under Article 37 of the Law on Investment 2020, foreign investors are required to apply for IRC to obtain governmental permission for their investment projects in Vietnam.

As for an IRC, the application dossier will consist of the followings:

  • An application form for the implementation of an investment project;
  • A proposal for the investment project;
  • Notarized-as-true copies of the passports of individual investors; or notarized-as-true copies of the incorporation documents of organizations, which is to prove the legal status of the investors;
  • A notarized-as-true-copy of one out of the following documents:
    • A financial statement of the investor issued for the last 02 years; or
    • An equity audit report of the investor, or
    • A commitment of the parent company to provide financial support or
    • A commitment of a financial institution to provide financial support,
    • A guarantee for the investor’s financial capability; or
    • A document describing the investor’s financial capability.
  • A lease agreement/contract or another legal instrument for proving the investor’s right to use the location for executing their investment project.

Timeline: Within 15 days from the receipt date of a full and valid application dossier, the investment registration office will issue an IRC for the investment project.

Competent authority: The Department of Planning and Investment where the investment project is located shall become the competent authority to receive the application dossier and issue an IRC for the investment project.

II. Applying for the enterprise registration certificate (“ERC”)

After obtaining IRCs, foreign investors are required to apply for ERCs issued for enterprises running their restaurants.

As for an ERC, the application dossier will consist of the followings:

  • An application form for the registry of an enterprise;
  • A charter of the enterprise;
  • A list of the company members (in case of a company limited with 02 or more members), or a list of the founding shareholders (in case of a joint-stock company);
  • A notarized-as-true-copy of a legal document [passport/identity card] of the enterprise’s legal representative;
  • Notarized-as-true-copies of the following documents:
    • Personal legal documents [passport/identity card] of owner/members/founding shareholders/shareholders being foreign investors;
    • Legal documents of owner/members/founding shareholders that are organizations;
    • Personal legal documents of authorized representatives [passport/identity card] of members/founding shareholders/foreign shareholders that are organizations, and their letters on appointing the authorized representatives.
    • Note: If an owner, a member, or a shareholder is a foreign organization, the copy of its legal document shall be legalized.
  • An IRC issued for foreign investors.

Timeline: Within 03 working days from the receipt date of a valid application dossier, the business registration office will issue an ERC for the investment project.

Competent authority: The Business Registration Office of the Department of Planning and Investment where the enterprise’s head office is located shall become the competent authority to receive the application dossier and issue an ERC for the enterprise.

III. Setting up the restaurant and applying for relevant business permits and licenses

The IRC and ERC above play the role of fundamental legal documents for enterprises operating foreign-invested restaurants. However, before bringing restaurants into operation, enterprises will additionally need some more business permits and licenses such as a Certificate of Food Hygiene and Safety[1] and a License relating to fire prevention and firefighting, as well as fulfilling requirements to sell end-product alcohol on the spot (if any).

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1. Applying for a Certificate of Food Hygiene and Safety

To request the issuance of a Certificate of Food Hygiene and Safety, the company shall first prepare an application dossier with the followings[2]:

  • An application form made in accordance with the prevailing regulations of laws;
  • A description of facilities, equipment, and devices meeting food safety requirements made in accordance with the prevailing regulations of laws;
  • A written confirmation of good health maintenance, or certification of good health, granted by the medical establishment at the district level or higher, issued for the restaurant owner and other personnel directly engaging in the production or trading of foods (copies shall be certified by the enterprise);
  • A confirmation on the completion of a training course in food safety, or a certificate of qualification in food safety issued for the restaurant owner and other personnel directly engaging in the production or trading of foods (copies shall be certified by the enterprise)[3].

Competent authority: The Department of Health where the restaurant is located.

Time limit: Within 15 days from the receipt date of a complete and valid application dossier, the Department of Health shall conduct a physical inspection to assess whether the restaurant has fulfilled requirements for food hygiene and safety; if the restaurant can satisfy all relevant requirements set forth by law, a Certificate of Food Hygiene and Safety will be granted to such a restaurant.

2. Preparing a dossier of fire prevention and firefighting

As a type of facility subject to compulsory fire management, restaurants also need to fulfill regulations on fire prevention & fighting and during their operations[4].

3. Fulfilling requirements to sell end-product alcohol on the spot

Additionally, in case a foreign-invested restaurant wants to retail alcohol for on-site consumption, such a foreign-invested restaurant shall also satisfy the following conditions to sell end-product alcohol on the spot[5].

  • Being an enterprise, cooperative, cooperative joint venture, or household business that is duly established under the laws of Vietnam;
  • Obtaining the legitimate right to use its fixed business location, with a clear address;
  • Registering its sale of end-product alcohol with the Office of Economics or Office of Economics and Infrastructure at the district level where the restaurant is located;
  • Selling end-product alcohol provided by traders who have already obtained licenses for the production/distribution/wholesaling/retailing of alcohol as prescribed by law.

We hope the above is clear and of assistance. In case of any further inquiries, please revert to us at [email address] for more assistance. With our team of qualified lawyers and legal experts majoring in the practice areas of corporation and investment, ALB & Partners can facilitate investors with the following services:

  • Consulting and drafting legal documents supporting the establishment of a foreign-invested restaurant;
  • Consulting on specific conditions for the issuance of relevant business licenses and permits for a foreign-invested restaurant;
  • Preparing documents and dossiers, and/or carrying out relevant legal procedures for setting up a foreign-invested restaurant;
  • Consulting other legal issues relating to the operation of a foreign-invested restaurant in Vietnam, including but not limited to tax, labor, commercial transactions, and compliance risks…

[1] Article 11 and Article 12 of Decree 15/2018/ND-CP

[2] Article 4 of Circular 43/2018/TT-BCT

[3] Article 14 and Article 24 of Decree 105/2017 provide the conditions and dossiers for granting a License of selling end-product alcohol on the spot, however, Article 17.10 of Decree 17/2020/ND-CP has annulled Article 24 of Decree 105/2017/ND-CP and merely provides the requirements for selling end-product alcohol on the spot

[4] Annex I.1.6 Decree 136/2020/ND-CP

[5] Article 14 Decree 105/2017/ND-CP amended by Article 16.7 of Decree 17/2020/ND-CP

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