|
ENT will limit second foreign retail store licensing
Vietnam will soon make public the regulations on allowing foreign retailers to open second and subsequent retail stores.
The Ministry of Industry and Trade (MOIT) is compiling a draft Government decree on retail goods that will clearly stipulate regulations for foreign retailers to open stores to be applied throughout Vietnam.
Vietnam has officially opened its retail market, a lucrative one in the eyes of foreign retailers with annual growth of double-digit percentages per annum.
A key point in Vietnam’s commitment to open its retail market is ENT, or Economic Needs Test, which allows area governments to reject foreign applications to open a second store if officials think it is unnecessary.
With the compilation of regulations on retail goods, Vietnam plans to establish ENT and other issues in retail market management.
The draft decree lists provisions to carry out ENT like the number of stores, market stability and population density. Store numbers will be considered based on the numbers of stores at the same level and same fields. Market stability will be considered based on a formula showing the influence of new retail stores on others with similar products within the same geographical areas.
Other issues, including population density, will also be considered to set up requirements for opening new retail stores.
Under the draft decree, every area will have an ENT council, the members of which will be decided by municipal and provincial people’s committees. In case new retail stores are located in cities or towns near other areas, the ENT council must include at least one representative from these places.
The draft decree also stipulates that ENT councils report to provincial and municipal people’s committees and their proposals need to be sent to the Ministry of Industry and Trade for consideration and approval.
Licensing must meet ENT requirements and also fit trade development plans.
It is clear that tight ENT regulations aim to prevent massive license-granting. With strict controls, area governments will not be able to arbitrarily grant licenses, while foreign investors will feel more secure when applying for second and subsequent stores, because they know the requirements.
Dinh Thi My Loan, Secretary General of Vietnam Retailers’ Association, has applauded the document. She said it is really necessary and will help apply regulations across Vietnam. Once issued, there will be common standards to which authorities can refer to grant licenses for new foreign retail stores.
“Transparent regulations will help government agencies in their management work, while they will also help enterprises in drawing up investment and business plans,” Loan added.
The ENT issue has been mentioned in many workshops recently, especially since Vietnam officially opened its retail market on January 1, 2010. Foreign investors have complained that the lack of concrete ENT regulations makes it difficult to access the market.
Tuoi tre newspaper, in a story published a month ago, quoted Fred Burke, a lawyer of Baker & McKenzy, as saying that only a few foreign retailers have come to Vietnam so far because of Vietnam’s ENT, a special tool that the World Trade Organization (WTO) allows members to use to restrict market access.
Former Minister of Trade Truong Dinh Tuyen expressed his concern that, without common standards, every area create a different way to grant licenses.
The document, once promulgated, will lift the doubts of foreign investors, because Vietnamese agencies will be very transparent in their policies.
vietnamnet, Dau tu
|
