Vietnam Eases Foreign Investment Rules in Retail (Effective October 18, 2026). How Decree 342/2026 Supports Multi-Store Expansion and Opportunities for Japanese Retailers

October 12, 2026

Vietnam has revised the framework governing trading in goods (retail and wholesale) by foreign investors. Decree No. 342/2026/ND-CP, promulgated on September 3, 2026 (the “Decree 342”), takes effect on October 18 of the same year and replaces the previous Decree No. 09/2018/ND-CP (the “Decree 09”).

Decree 342 substantially narrows the scope of the Economic Needs Test (ENT) that has applied to foreign-invested retail outlets, and it simplifies the business license procedures. It is widely viewed as an easing of foreign investment restrictions in retail, and it is drawing attention as a development that supports multi-store expansion by Japanese companies.

This article organizes the main changes introduced by Decree 342 as factual points, including how they differ from the previous Decree 09, and then reviews the impact on the investment environment and the consumer market, together with the practical points Japanese companies will want to check, based on materials published by the National Assembly and the government.

TOC

1. What Has Changed. Decree 342’s Revision of the Rules on Foreign-Invested Trading in Goods

Decree 342 sets out in detail how the Commercial Law and the Law on Foreign Trade Management apply to the conduct of trading in goods (export, import, and distribution) in Vietnam by foreign investors and foreign-invested enterprises, together with the services directly related to such trading. These related services include commercial assessment, logistics, leasing of movable property (excluding financial leasing and the leasing of construction machinery and equipment with an operator), trade promotion (excluding advertising), commercial intermediation (excluding wholesale and retail agency), e-commerce (EC) intermediary platforms, the management and operation of social networks conducting EC and of integrated EC platforms, and bidding for goods and services. The Decree gives domestic effect to the commitments Vietnam has made under the trade agreements it has concluded, and it governs the market-entry procedures for foreign investment in the retail and wholesale sectors.

(1) The Role of Decree 342 and Its Effective Date

Decree 342 was promulgated on September 3, 2026 and takes effect on October 18, 2026. With this, Decree 09, which had governed this field since 2018, ceases to be effective. The Decree applies to foreign-invested enterprises that, under the Law on Investment, are subject to the same conditions and procedures for investment activities as foreign investors, such as enterprises in which foreign investors hold more than 50% of the charter capital (hereinafter “covered foreign-invested enterprises”). Foreign-invested enterprises that do not fall into this category are not required to obtain a business license or a license to establish a retail outlet.

(2) A Major Reduction in the Scope of the Economic Needs Test (ENT)

The change with the greatest practical impact in this revision is the narrowing of the scope of the Economic Needs Test (ENT). The ENT is a mechanism that assesses factors such as local demand and the situation of existing outlets when a second or subsequent retail outlet is established, and it has been regarded as a practical hurdle to multi-store expansion.

Under Decree 09, apart from exemptions based on the size or location of an outlet, the ENT in principle applied when a covered foreign-invested enterprise established a second or subsequent retail outlet. By contrast, Decree 342 provides that the ENT applies only to covered foreign-invested enterprises established by investors from countries or territories that are not parties to an international treaty containing a provision abolishing the ENT requirement. Investors from countries or territories for which the ENT has been abolished under a trade agreement concluded by Vietnam will move out of the scope of the ENT. Under the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership), to which both Japan and Vietnam are parties, Vietnam has committed to exempting investors from other member states from the Economic Needs Test (ENT). As a result, once Decree 342 takes effect, Japanese investors are in principle exempt from the ENT.

Decree 342 also reorganized the ENT assessment criteria. It specifies that the geographic area subject to assessment is primarily the commune or ward level for retail outlets with a floor area of less than 5,000 square meters, and the provincial or centrally governed city level for retail outlets of 5,000 square meters or more. Among the previous criteria, those concerning the number of existing retail outlets in the relevant geographic market, traffic congestion, environmental sanitation, and fire prevention were removed, while conformity with the maintenance of security and public order, social safety, the security of borders and islands, and the security of military zones was added.

In addition, with respect to the definition of a “retail outlet” that underlies the ENT, Decree 342 expressly provides that it does not include vending machines or mobile retail vehicles.

(3) Simplified Business License Procedures and a Transfer of Authority

Decree 342 also simplified the application procedures for the business license. The submission of a financial plan demonstrating eligibility for the business license, which had been required under Decree 09, was removed. The Decree further provides that, for certain application documents such as the Enterprise Registration Certificate (ERC), the Investment Registration Certificate (IRC), the outlet establishment permit, and tax-related documents, the applicant need not submit them where the issuing authority can obtain them from a national database or a specialized database. The number of copies of application documents required was also unified at a single copy, whereas two or three copies had been required in some cases previously.

There is also a change in the authority responsible for the procedures. The authority to issue, re-issue, amend, and revoke the business license and the license to establish a retail outlet was transferred from the provincial Department of Industry and Trade to the provincial People’s Committee.

At the same time, Decree 342 requires continued compliance. Whereas Decree 09 required the market access conditions to be met at the time the license was granted, Decree 342 requires the market access conditions to be met throughout the period in which the licensed business is carried out. If this is breached, the business must be suspended, and if it is not remedied within 12 months, it must be terminated.

(4) Other Main Changes

In addition, Decree 342 includes the following changes.

▽A provision was added under which, where an enterprise becomes a covered foreign-invested enterprise through a foreign M&A, it may continue to conduct trading in goods as before, for up to 12 months, from the date the M&A is approved until the required business license or license to establish a retail outlet is issued.

▽In addition to the existing categories of “goods manufactured in Vietnam” and “goods lawfully imported into Vietnam,” the category of “goods processed in Vietnam” was added to the goods for which wholesale and retail distribution rights are granted.

▽The definitions of “goods,” “trading-in-goods business,” and “business directly related to trading in goods” were clarified, and logistics services, commercial intermediation services, and the management and operation of e-commerce platforms were positioned as “directly related business.”

▽A new review was introduced under which, in certain cases, approval from the Ministry of Public Security and the Ministry of National Defense on national security grounds must be obtained when issuing the business license and the license to establish a retail outlet. The cases covered include applications for a business license in fields outside the scope of treaty commitments, large-scale e-commerce platforms operated by operators under foreign control, and large-scale retail chains of a certain size or more. A large-scale retail chain is defined as one that has 100 or more outlets each with a floor area of less than 500 square meters, 50 or more outlets each of 500 square meters or more and less than 3,000 square meters, or 30 or more outlets each of 3,000 square meters or more.

2. Impact on the Investment Environment and the Consumer Market

(1) Lower Hurdles to Multi-Store Expansion

At the heart of Decree 342 are the narrowing of the ENT’s scope and the simplification of procedures. The scope of the ENT, which had required a check for each second or subsequent outlet, has been narrowed, and for investors from countries or territories where the ENT has been abolished under a trade agreement, the predictability of multi-store expansion increases. Removing the obligation to submit a financial plan, omitting the submission of some application documents, and unifying the number of required copies all reduce the procedural burden for each store opening. For companies considering expanding their retail network across a wider area, the regulatory environment is gradually falling into place.

(2) A Boost for Vietnam’s Economy and Consumer Market

Behind this deregulation lies Vietnam’s policy direction of placing the expansion of domestic demand and the consumer market at the center of growth. The government has set out to achieve high economic growth and positions the development of the private economy as a key national priority, and the move to simplify the conditions and procedures for foreign investment entry is continuous with this direction.

Retail is a sector that readily benefits from this expansion of domestic demand. Against a backdrop of rising incomes centered on urban areas and increasingly diverse consumption, interest from foreign retailers, including Japanese ones, continues, and regulatory development aimed at expanding store networks is expected to further support this trend.

(3) The Practical Meaning of Simpler Licensing Processes

The consolidation of authority into the provincial People’s Committee and the omission of documents that can be obtained from a national database may reduce the time and administrative burden required for store-opening procedures. On the other hand, the requirement to meet the market access conditions throughout the period in which the licensed business is carried out means that ongoing confirmation of compliance with the conditions will be required even after a store opens.

3. Implications for Japanese Companies

(1) An Occasion to Review Store-Opening Plans and Investment Schemes

The entry into force of Decree 342 provides one occasion to review store-opening plans and investment schemes for retail businesses in Vietnam. As the scope of the ENT narrows and procedures are simplified, there is room to reconsider plans that had been cautious about increasing the number of stores. The transitional measure for cases where an enterprise becomes a covered foreign-invested enterprise through an M&A also bears on the design of market entry through acquisitions. It is useful to map out how a company’s own store-opening concepts and entry methods become easier to pursue under this regulatory change.

(2) Points to Keep in Mind

At the same time, the scope and conditions of the easing have limits. Whether a business falls outside the scope of the ENT depends on the content of the trade agreement concluded between Vietnam and the investor’s country or territory. In addition, for large-scale retail chains of a certain size or more, and for fields outside the scope of treaty commitments, the national security review by the Ministry of Public Security and the Ministry of National Defense comes into play. It is also necessary to keep in mind that the market access conditions must be met throughout the implementation period even after the license is obtained. Which provisions a particular store-opening plan is subject to will vary depending on the scale, business format, and location of the business.

Conclusion. How to Use This Regulatory Change in Your Store-Opening Strategy

Decree 342 revises the foreign-invested retail and wholesale sectors as a single package, narrowing the scope of the ENT, simplifying license procedures, consolidating authority, and expanding the range of covered goods. For Japanese companies considering multi-store expansion, it is a change in the direction of greater predictability for store openings. At the same time, it includes points to check, such as the new national security review for large-scale retail chains and the obligation to comply with the conditions throughout the implementation period. Ahead of the effective date of October 18, 2026, companies would do well to map out what the regulatory change means in light of their own store-opening concepts and investment schemes.

TMI Consulting Vietnam, a group company of TMI Sogo Law Office, provides consulting on foreign direct investment (FDI), cross-border M&A, investment scheme design, and overseas expansion. For inquiries on overseas expansion, M&A, or investment strategy, please feel free to contact TMI Consulting Vietnam at info@tmiglobalconsulting.co.jp.