Foreign investment in restaurants in Vietnam

A foreign investor wishing to invest in a restaurant in Vietnam should note the following potential legal issues, among other things:

• Under the WTO Commitments, Vietnam only undertakes to allow foreign investment in food catering and  drink services if the investment is made together with investment in hotel construction, renovation, restoration or acquisition. However, this market access limitation will be removed in 2015; and

• A restaurant usually sells packaged foods, cigarettes, alcohol or non-alcohol drinks . If the restaurant’s sale of packaged foods, cigarettes, alcohol or non-alcohol drinks is considered as foods or drinks retailing then the target company may need to obtain a trading licence for the right to retail foods and drinks. If the foreign investor investing in a chain of restaurant with multiple outlets then from the second restaurant an economic need test will be required. Also under WTO Commitment, Vietnam may refuse to allow a foreign investor to distribute or retail cigarettes.