Vietnam has become a popular destination for foreigners to open restaurants due to its diverse cuisine and growing tourism industry. However, opening a restaurant in a foreign country is not without its challenges. One of these challenges is navigating the local laws and regulations, which can be a time-consuming process. This article will discuss the importance of seeking consultancy when opening a restaurant in Vietnam, as well as the procedures for doing so in the country.
The legal basis for opening a restaurant business
According to the World Trade Organization’s Schedule of Commitments on services, catering (CPC 642) and beverage (CPC 643) services in Vietnam are not limited to countries receiving the Most-Favored Nation (MFN) Exemption treatment. This means that foreign investors seeking to enter the restaurant business in Vietnam will not face market access restrictions and can invest in the industry without any hindrance, regardless of their nationality or the territory they belong to.
In addition, the Law on Investment 2020 and Decree 31/2021/ND-CP stipulate the procedures and documents that foreign investors must prepare if they wish to invest in a restaurant in Vietnam.
Forms of investment for foreigners doing business in Vietnam
Foreign investors will have two directions to choose from:
– New business with 100% foreign capital in the fields of restaurants, coffee, hotels.
– Acquiring existing restaurant, coffee and hotel chains in Vietnam.
Procedures for opening a business in Vietnam by foreigners
Foreign investors who wish to conduct business operations in Vietnam are required to obtain an investment registration certificate. Moreover, for business establishment purposes, investors must complete the necessary procedures to establish an enterprise that meets their specific needs and requirements. After establishment, investors must also apply for the appropriate permits such as food hygiene and safety, fire protection, environmental, and certain types of retail licenses to ensure compliance with legal obligations.
Investment registration certificate
According to the Investment Law, the time for investment registration is 15 working days from the date of application submission to the competent authority. However, the restaurant industry is a conditional business, and the authorities may need to consult with other ministries and branches. This consultation process may extend the implementation time to two to two and a half (2-2.5) months to complete the investment certificate procedure.
After obtaining an investment certificate to open a restaurant business in Vietnam, foreign investors must complete procedures for establishing an enterprise and obtain an enterprise registration certificate. The business must register as a Food and Beverage Supply Service.
Business license
After receiving the investment certificate in step 1, the foreign investor will need to proceed with establishing an enterprise. This step typically takes 5 working days from the date of certificate issuance.
Investors who wish to register their business and pursue their projects in Vietnam have several options available. Three common business types that are often selected based on specific requirements and circumstances are: a one-member limited liability company, a two-member limited liability company, or a joint-stock company.
Certificate of food hygiene and safety
The restaurant must obtain a Food Safety and Hygiene Certificate issued by the local Health Department. This certificate ensures that the restaurant adheres to food safety and hygiene standards. Pursuant to the Law on Food Safety 2010, investors need to meet specific conditions to apply for this certificate, which are as follows:
– Business establishments must meet specific requirements to ensure food safety in food processing and preservation:
+ To prevent cross-contamination between raw and processed food, the kitchen staff organizes the layout accordingly.
+ The established water sample standards must compliance with the National Technical Regulation on domestic water quality.
+ Tools for the proper collection and storage of garbage and waste must be provided to maintain hygiene standards.
+ Both the shop and kitchen areas must have clear and unobstructed drains.
+ An appropriate canteen setup should include proper ventilation, cooling, good lighting, and stringent hygiene practices, along with measures to prevent the presence of harmful insects and animals.
+ Amenities such as food preservation equipment, toilets, handwashing areas, and regular cleaning procedures for waste and garbage should be provided.
+ The individual in charge of the collective kitchen is responsible for maintaining food safety standards.
– To ensure food safety in food processing and preservation, the food industry must meet specific requirements:
+ Food and food ingredients must have a clear origin and ensure safety, and save food samples.
+ The business must store food displayed for sale in glass cabinets or preserved equipment that can resist dust, rain, sunlight, insects, and animals.
Certificate of eligibility for fire prevention and fire-fighting
According to Appendix I of the List of establishments governed by fire prevention and firefighting management in connection with Decree No. 136/2020/ND-CP, markets, commercial centers, electronics stores, supermarkets, convenience stores, restaurants, and food shops must comply with fire prevention and firefighting regulations. This means that business operators in the restaurant and food service industry are required to obtain a fire prevention and firefighting license, which is considered a common “sublicense” by authorities. This requirement is mandatory when investors carry out administrative procedures related to construction permit applications and in certain industries.
Conditions for obtaining the license: According to Clause 1 Article 5 of Decree 136/2020/NĐ-CP which guides the Law on Fire Prevention and Fighting and the amended Law on Fire Prevention and Fighting, the conditions for obtaining a certificate of satisfaction of fire prevention and fighting conditions must be me
On-stie retail liquor license, tobacco retail license
Businesses providing alcohol services must apply for a certificate of alcohol retail on the spot. This license is issued by the People’s Committee of the district where the business is located. Similarly, for tobacco retail, the service business organization must apply for a Certificate of Tobacco Retailing.
Foreign Investors’ Considerations When Establishing Stores in Vietnam
One of the primary concerns for this industry is investment capital. Although there is no minimum requirement, inadequate funding may decrease the likelihood of approval.
Another vital aspect is the investor’s experience. The investor must provide documented proof of their expertise in managing and operating a restaurant.
Thirdly, the restaurant must be located in a commercial area and cannot be situated inside an apartment complex. The leased space should be proportional to the amount of customers that the restaurant anticipates serving. Additionally, the investor must ensure legal parking spaces that adhere to safety and security regulations according to the planning guidelines.
Conclusion
In conclusion, opening a restaurant in Vietnam as a foreign investor offers both opportunities and challenges. To maximize success and avoid legal or financial issues, it is essential to consider various factors, such as investment capital, experience, and location. With the right mindset and guidance from experienced professionals, foreign investors have the potential to enter and succeed in Vietnam’s vibrant and rapidly growing restaurant industry.
Through the above information sharing, HMLF aims to provide foreign investors with insight into the restaurant business in Vietnam. For more detailed consultation and answers, please contact the HMLF team.
Harley Miller Law Firm “HMLF”
Head office: 14th floor, HM Town building, 412 Nguyen Thi Minh Khai, Ward 05, District 3, Ho Chi Minh City.
Phone number: 0937215585
Website: hmlf.vn
