VCI Legal, 11 September 2026

On 3 September 2026, the Government of Vietnam issued Decree No. 342/2026/ND-CP (“Decree 342”), introducing a new regulatory framework for goods trading and activities directly related to goods trading by foreign investors and foreign-invested economic organisations (“FIEs”) in Vietnam.

Decree 342 will take effect on 18 October 2026, replacing Decree No. 09/2018/ND-CP (“Decree 09”) and repealing Article 36 of Decree No. 146/2025/ND-CP on decentralisation in the industry and trade sector.

While the substantial relaxation of the Economic Needs Test (“ENT”) is likely to attract the most attention from foreign retailers, Decree 342 goes considerably further. It recalibrates the conditions for Business Licences, revises the requirements for establishing retail outlets, consolidates licensing authority at provincial level, introduces a national-security review for specified cases and provides a clearer framework for foreign acquisitions of businesses already operating retail outlets in Vietnam.

Business Licence requirements become more streamlined and treaty-driven

Decree 342 retains the distinction between foreign investors benefiting from Vietnam’s international treaty commitments and those that do not, but simplifies several conditions for obtaining a Business Licence.

For an investor from a country or territory covered by an international treaty under which Vietnam has made relevant market-access commitments, Article 9 of Decree 342 principally requires compliance with the applicable market-access conditions and, where the FIE has been established in Vietnam for at least one year, the absence of overdue tax liabilities.

Notably, the separate financial plan requirement under Decree 09 is no longer included as a licensing condition. Decree 342 also removes certain criteria previously applicable to non-treaty investors, including the express assessment of their ability to create employment for Vietnamese workers and contribute to the State budget. For non-treaty investors, the principal additional considerations are compliance with relevant specialised legislation and consistency with the level of competition among domestic enterprises in the same sector during the preceding year.

This should reduce some of the documentary and discretionary burdens historically associated with the Business Licence process. However, greater scrutiny remains possible for business activities or goods for which Vietnam has not made market-opening commitments. In those cases, the licensing authority may still consider matters such as sectoral development strategies and Vietnam’s market-opening process, with additional considerations concerning diplomatic relations, national security, public order and social safety applying to certain non-treaty investors.

Decree 342 also clarifies the duration of Business Licences. For treaty-covered investors falling under Article 9.1, the permitted business duration generally corresponds to the duration of the Enterprise Registration Certificate, where applicable. For the other cases specified in Article 9, a five-year term continues to apply.

ENT is significantly narrowed but not abolished for every foreign retailer

Perhaps the most commercially significant change concerns the ENT applicable to the establishment of additional retail outlets.

Under Decree 09, as a general rule, an FIE establishing its second or subsequent retail outlet had to undergo ENT unless the outlet was below 500 square metres, located within a shopping centre and was neither a convenience store nor a mini-supermarket.

Decree 342 substantially narrows that requirement by linking ENT to Vietnam’s international treaty commitments.

Under Article 22, an investor establishing an outlet in addition to its first retail outlet will be subject to ENT where the investor is not from a country or territory participating in an international treaty with Vietnam that contains a commitment to abolish ENT. The existing exemption for certain outlets below 500 square metres in shopping centres is also retained.

Accordingly, foreign investors entitled to the benefit of a treaty under which Vietnam has committed to abolish ENT may establish additional retail outlets without undergoing the ENT process, subject to the remaining licensing requirements.

This distinction is important. Decree 342 does not eliminate ENT across the board. Investor nationality and the specific treaty relied upon must first be examined to determine whether the investor is entitled to the relevant ENT exemption.

For foreign retail groups planning multi-store expansion in Vietnam, treaty structuring and confirmation of the applicable market-access commitments should therefore form part of the licensing analysis at an early stage.

Where ENT remains applicable, the geographical market is more clearly defined

Decree 342 also provides greater clarity on how the geographical market affected by a proposed retail outlet is to be assessed.

For an outlet with a sales area of less than 5,000 square metres, the affected geographical market is assessed at commune, ward or equivalent level. For an outlet with a sales area of 5,000 square metres or more, the assessment is conducted at provincial or centrally governed city level.

The ENT assessment considers, among other matters, the proposed outlet’s impact on market stability, existing retailers and traditional markets; demand within the relevant geographical area and the proposed outlet’s ability to meet that demand; its contribution to local socio-economic development; and relevant security, public-order and safety considerations.

By introducing express geographical thresholds, Decree 342 should provide foreign investors with a clearer basis for preparing the market analysis required where ENT continues to apply.

Retail location compliance becomes more important

Decree 342 removes the financial-plan condition previously applicable to the establishment of a retail outlet, but at the same time provides a more detailed regulatory test for the proposed location.

A retail outlet must now satisfy applicable requirements relating to land management, planning, investment, construction, fire prevention and fighting, traffic safety and environmental sanitation, in addition to the requirement concerning overdue tax liabilities for FIEs that have operated in Vietnam for at least one year.

This changes the emphasis of the retail outlet licensing exercise. Although one financial condition has been removed, investors should expect the legality and suitability of the proposed premises to receive greater attention.

Foreign retailers should therefore complete comprehensive site due diligence before committing substantial expenditure to a lease, fit-out or store opening. In particular, contractual arrangements for a proposed site should account for the risk that the premises may not satisfy all requirements necessary for the Retail Outlet Licence.

Provincial authorities take the lead, while national-security review becomes more targeted

Decree 342 provides that the provincial-level People’s Committee where the FIE has its head office is responsible for granting, re-granting, adjusting and revoking its Business Licence. The provincial-level People’s Committee where a retail outlet is located performs the corresponding functions in relation to the Retail Outlet Licence.

At the same time, Decree 342 introduces an express consultation mechanism with the Ministry of Public Security and the Ministry of National Defence on national-security matters in specified cases.

These include certain applications involving non-treaty investors or activities and goods without applicable market-opening commitments; foreign control over operators of large intermediary e-commerce platforms, social networks conducting e-commerce activities or integrated e-commerce platforms; and foreign investors with retail networks reaching specified scale thresholds.

For retail networks, national-security consultation may be triggered by, among other cases, the establishment or continued operation of outlets where the investor reaches the prescribed thresholds of 100 outlets below 500 square metres, 50 outlets from 500 square metres to below 3,000 square metres, and/or 30 outlets of 3,000 square metres or more in Vietnam.

The practical message is therefore two-sided: Decree 342 liberalises important aspects of foreign retail market access, but simultaneously introduces a more targeted screening mechanism for investments or retail networks considered more significant from a national-security perspective.

Acquisitions of existing Vietnamese retailers receive a clearer transition mechanism

Decree 342 is also relevant to M&A transactions involving operating Vietnamese retail businesses.

Where an economic organisation already operating retail outlets becomes an FIE following a foreign investor’s capital contribution, share acquisition or acquisition of a capital contribution, the organisation must undertake the procedures for obtaining the required Business Licence and Retail Outlet Licence.

Importantly, Decree 342 expressly allows the existing retail outlets to continue operating during the licensing process, subject to a maximum period of 12 months from the relevant confirmation or legal document recording satisfaction of the foreign investment conditions.

This provides greater operational certainty for transactions involving existing retail chains. Nevertheless, the 12-month period should not be treated as a substitute for licensing planning. Buyers should identify the licences required, the treaty status of the incoming investor, any ENT implications and any potential national-security review before closing the transaction.

These matters should also be reflected in transaction documents, including conditions precedent, post-closing undertakings and responsibility for completing the relevant licensing procedures.

Administrative procedures are increasingly linked to government databases

Another practical improvement under Decree 342 is the increased reliance on information available through national and specialised databases.

For a number of licensing procedures, documents such as enterprise registration, investment registration and tax-related materials need to be separately submitted only where the licensing authority is unable to access or retrieve the relevant information from the applicable government databases.

This reflects a broader shift towards data-sharing between State authorities and may reduce duplicative filings. The benefit in practice, however, will depend on the availability and completeness of information in the relevant databases.

Reporting obligations become more frequent

FIEs should also take note that Decree 342 increases the frequency of periodic reporting.

Under Decree 09, FIEs were generally required to submit an annual report before 31 January. Decree 342 introduces both an annual report, due before 15 January, and a six-month report, due before 15 July, covering goods trading and directly related activities.

Companies subject to Decree 342 should therefore update their compliance calendars and internal data-collection procedures before the new regime becomes effective.

Transitional arrangements

Decree 342 preserves the validity of Business Licences and Retail Outlet Licences issued before its effective date, and FIEs may continue conducting the activities already licensed.

Applications that have already been accepted by the licensing authority before 18 October 2026 will, in principle, continue to be processed under Decree 09 and the relevant provisions of Decree 146/2025/ND-CP. However, where an application is incomplete or invalid, the applicant must provide the requested supplemental explanation within six months from the licensing authority’s request. After that period, the application will be dealt with under Decree 342.

Decree 342 also provides that changes to a registered head-office or retail-outlet address resulting solely from the reorganisation of provincial administrative units do not require an amendment to the existing Business Licence or Retail Outlet Licence.

What should foreign investors do now?

Decree 342 represents a meaningful liberalisation of Vietnam’s foreign-invested retail framework, particularly for investors that can rely on treaty commitments eliminating ENT. At the same time, the new regime is not simply a deregulation exercise: location compliance, investor nationality, the scale of the retail network and national-security considerations may now play a more prominent role in individual applications.

Before Decree 342 becomes effective on 18 October 2026, foreign investors and FIEs engaging in trading or retail activities in Vietnam should review their existing and planned operations, including the treaty status of their investors, the licensing pathway for planned retail outlets, pending applications, acquisition structures involving existing retailers, and the new periodic reporting timetable.

For retail groups contemplating significant expansion in Vietnam, the removal of ENT in qualifying treaty cases may materially reduce one of the principal regulatory constraints on developing a larger store network. Whether that benefit is available, however, should be assessed on a case-by-case basis against the investor’s nationality, corporate structure, applicable international treaty and proposed retail model.

This Legal Breaking News is intended for general information purposes only and does not constitute legal advice. Specific legal advice should be obtained in relation to particular circumstances.

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