Vietnam urged to ease barriers to foreign retailers

Thanh Nien News

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Representatives of foreign business associations want Vietnam to make its regulations on the expansion of foreign retailers transparent and easy, Thoi bao Kinh te Saigon (Saigon Times) Online reported.
They were speaking about the rules of the Economic Needs Test (ENT) – an administrative review that a wholly foreign-owned retailer has to undergo when it wants to open any additional outlet in Vietnam – at a meeting in Ho Chi Minh City on Friday.
Hong Sun, general secretary of the Korea Chamber of Commerce in Vietnam, said by applying the ENT, Vietnamese agencies can reject foreign businesses’ applications for opening a new outlet as being unnecessary for the area where the outlet is located.
Under Vietnamese laws, the ENT comprises an administrative review of the number of existing retail sales outlets in a particular geographic area, market stability, population density, and the relevant urban development scheme.
Hong said that last August the Ministry of Industry and Trade eased the regulation by exempting outlets of less than 500 square meters from the ENT, but many foreign businesses still have to undergo it when applying for a new store.
He also pointed out that since the ministry did not regulate a deadline for local authorities to approve such applications, businesses have to wait too long before getting replies.
South Korean retailers are very interested in the Vietnamese market, but the ENT has stopped them from expanding their business here, he said.
He said that Lotte Mart planned to open 60 stores as of 2020, but the plan has been delayed, while Emart has yet to be able to get permission to open an outlet here.
The Vietnamese government should not have applied unclear regulations like the ENT to restrict the access of foreign businesses and protect local retailers, Hong was quoted as saying.
Csba Bundik, executive director of EuroCham Vietnam, also said the ENT is obstructing European businesses’ expansion plans in Vietnam.
He said the ENT’s rules are very vague, leading to different interpretations by local authorities, so they have to consult other agencies when reviewing foreign businesses’ applications, which takes time and is impractical.
Vietnam needs to introduce clear definitions and criteria related to the ENT so local authorities can apply them consistently, Bundik said.
Vo Van Quyen, chief of the ministry’s domestic market department, agreed that the ENT’s rules need to be adjusted, given the inconsistency of Vietnamese agencies’ implementation of the rules.
Vietnam applied the ENT in 2007 when it opened its retail market to 100 percent foreign-owned businesses as part of its WTO commitments.
The country is expected to remove all barriers to foreign retailers by 2015.
Official figures showed that foreign stores currently account for more than 40 percent of 700 retail outlets in Vietnam.

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