As Vietnam’s economy continues to grow rapidly and its population becomes increasingly affluent, the country’s wine market presents a lucrative opportunity for foreign investors. With a young and expanding middle class, favorable demographics, and improved infrastructure, the potential for success in the wine distribution business in Vietnam is significant.
However, navigating the complexities of regulations, cultural differences, and local business practices can take a lot of work for foreign investors. This article aims to provide investors with comprehensive information on how to set up a wine distribution business in Vietnam successfully.
CAN I OPEN A 100% FOREIGN-OWNED COMPANY THAT DISTRIBUTES WINE IN VIETNAM?
Based on the Trading Agreement between Vietnam and other countries, foreign investors are granted permission to establish a wine-distributing enterprise in Vietnam that is 100% foreign-owned. To import and distribute goods in Vietnam, it is mandatory to register your enterprise as a trading company.
Typically, a trading company automatically has a wholesale feature, allowing you to market your goods to other companies once the registration process has been completed. However, wine is a unique product that necessitates three separate sub-licenses for distribution, wholesale, and retail, which will be addressed later. The subsequent step is to complete the registration process for your trading company.
HOW TO REGISTER A TRADING COMPANY IN VIETNAM?
To establish a trading company in Vietnam, two crucial certificates must be obtained from the Department of Planning and Investment (DPI): the Business Registration Certificate (BRC) and the Investment Registration Certificate (IRC). In addition, there are certain standard requirements that must be met, including having a business address, at least one legal representative, and an appropriate amount of initial capital.
Having a business address is mandatory, and you can opt for a physical or virtual one. However, this address must be distinct from your residential address. Thus, using someone’s home address for business registration will be rejected during the registration process. If you are unable to find a suitable location, our business address service can be used. We will provide you with a legitimate address to fulfill the registration process, and you can change it later when you have found a suitable location.
All businesses in Vietnam are required to have at least one legal representative, who can be either a Vietnamese or a foreigner with a permanent address that qualifies them as a resident.
Finally, you must provide the amount of initial investment capital. Although there is no specific amount mandated by law, it should be a “reasonable” sum that fits your business’s requirements. This sum should be sufficient to cover your operating costs (such as wages, taxes, and other expenses) until your business becomes self-sustaining. If the sum is too low or unreasonable, the DPI may challenge it, resulting in a longer process. As a result, you should choose the amount carefully.
The process takes approximately four to six weeks to complete, after which you must obtain the necessary sub-licenses before commencing business operations.
OBTAIN NECESSARY SUB-LICENSES TO DISTRIBUTE WINE IN VIETNAM
To effectively launch your company in the alcohol industry, it’s imperative to acquire the appropriate sub-licenses based on your specific business operations, whether it be alcohol distribution, wholesale, or retail sales. For alcohol distributors, the License for Alcohol Distribution from the Ministry of Industry and Trade is required. Wholesale companies must obtain the License for Wholesale Alcohol, while retail businesses need the License for Retail Alcohol to legally operate. Both sub-licenses can be obtained through the Department of Industry and Trade. It’s crucial to secure these licenses to ensure compliance with regulatory standards and to establish a strong foundation for your business in the industry.
It is important to streamline processes in order to maximize efficiency and minimize effort. One way to do this is by obtaining all three sub-licenses simultaneously and submitting the necessary documentation in one go. We have provided a comprehensive list of the detailed requirements for each sub-license below to facilitate this process.
To acquire the license for distributing alcohol, it is required that you submit your application to the Ministry of Industry and Trade while fulfilling specific conditions as stated below:
- There must be a minimum of two wine distribution centers/locations in the region, spanning across at least two provinces or centrally-managed cities, including the area where your business is registered.
- In each province or centrally-managed city, it is mandatory to have at least one wine wholesaler. However, if you establish a branch or business outside your headquarters to trade in wine, confirmation from a wine wholesaler is optional.
- You must provide written introductions or contracts from wine producers, other wine distributors, or foreign wine suppliers.
In order to obtain a Wholesale Alcohol License, it is necessary to fulfill certain conditions. First, you must have a distribution center or wine location in the province or city where your business is registered, with at least one wine wholesaler. Additionally, you must provide written introductions or contracts from wine producers, other wine distributors, or foreign wine suppliers.
If you are applying for a Retail Alcohol License, you will need to provide the same introductions or contracts from wine producers, other wine distributors, or foreign wine suppliers, as well as documentation for using the location to operate retail activity.
It should be noted that the processing time for each license is typically between 10-20 working days, assuming that your documentation is not challenged or questioned by the regulatory authority.
HOW TO IMPORT WINE INTO VIETNAM?
To import wine or alcoholic beverages into Vietnam, you need to follow the steps below.
Step 1: Determine the HS Code and product inspection
It is imperative to understand that when submitting your documentation to the Customs House, it must be categorized according to the Harmonized System (HS) Code. This code serves as a critical determinant for the necessary documents and procedures needed to successfully import your products into Vietnam. Additionally, it dictates the specific taxes and fees associated with the importation of your goods. Therefore, it is highly recommended that you familiarize yourself with the HS Code prior to beginning the importation process.
The wine and alcoholic beverages are categorized under HS Code Chapter 22. Depending on the kind of beverage you import, the specific HS Code you need falls under code 2204
Once you have established the requisite HS Code, it is crucial to conduct an inspection to ensure the safety of your wine for importing and selling in Vietnam. You need to approach authorized agencies and acquire the test results, which will serve as evidence for obtaining the Certificate of Food Safety. It is noteworthy that each product necessitates a separate certificate, hence if you intend to import multiple products, you must acquire a separate certificate for each one. Nevertheless, obtaining each certificate follows a generally similar process.
Step 2: Customs procedure of import wine and alcoholic beverages into Vietnam
Upon successfully obtaining the Food Safety Certificate, you may proceed to submit said certificate along with the necessary documents for Customs Clearance. The processing of your request will take several days, and upon successful validation of your documents, your products will be allowed for importation without any further inquiries.
It is important to note, however, that Customs Clearance may randomly select some cargo for testing, which may result in a delay of importation for a few additional days.
Upon completion of the importation process with the aforementioned sub-license, you may proceed to sell your wine and alcoholic beverages in Vietnam.
HOW CAN VNBG ASSIST YOU?
When it comes to importing and distributing wine and other alcoholic beverages in Vietnam, it’s important to note that the government has stricter regulations in place compared to other products. However, the incorporation process itself is relatively straightforward and only requires standard requirements without any specific conditions.
The real challenge comes in obtaining the necessary sub-licenses to operate your business. To ensure a smooth and efficient process, it’s recommended to seek the assistance of an experienced consulting firm that can help with the necessary documents and dossiers, ultimately saving you valuable time and resources.
That’s where VNBG comes in. With years of experience helping numerous businesses across various industries, including trading companies that import food such as raw meats and supplements into Vietnam, we pride ourselves on being the most effective and cost-efficient solution for entering the Vietnam market.
In addition to incorporation services, VNBG also provides comprehensive EOR (Employer of Record) services, which cover tasks such as staff recruitment, tax and salary payments, benefit delivery, daily operations management, and more. By partnering with VNBG, you can focus on growing your business while leaving administrative tasks to our capable team.
You may be also interested in the following:
10 STEPS TO GET YOUR COMPANY FULLY OPENED AND READY TO RUN IN VIETNAM
HOW TO IMPORT AND DISTRIBUTE FOOD SUPPLEMENTS IN VIETNAM
