Question: One of our clients is interested in opening pawnshops in Viet Nam. We are now looking for a solution to his request and looking for a partner in Viet Nam to assist us with this request.
In this regard, May I kindly ask you to answer the following questions:
How to get a license for a pawn shop in Viet Nam?
Will a pawn shop be eligible to issue bonds?
Are there any restrictions on the sale of these bonds to accredited investors (natural persons)?
Answer: This is a reference to your email below. Please find our answers below:
1. A foreigner must obtain an Investment Registration Certificate ("IRC") from the competent authority to start his/her business activities in Vietnam. IRC can be granted to the foreigner based on his/her proposed long or medium term business plan. His/her business plan shall be verified and examined by the competent authority and if it satisfies conditions set forth by Vietnam Law, the competent authority shall grant an IRC having validity from 5-50 years. Then, the foreigner shall obtain an Enterprise Registration Certificate ("ERC") in order to set up a company for carrying out the registered business activities.
2. Vietnam Government does not commit to open its market in the field of pawn shop business for foreigners. Then, it is quite hard for a foreigner to obtain an IRC for starting a pawnshop in Vietnam. We also would like to note that one of prerequisite conditions for opening a pawnshop is to obtain a security certificate from the local authority. The security certificate can be only granted if the person who is in charged of security issues of the pawnshop has a permanent residential address in the ward wherein the pawnshop is located. Then, foreigners generally cooperate with Vietnamese Investor in order to open a pawnshop in Vietnam.
3. A pawnshop is not allowed to issue a bond. However, the enterprise which owns and manages the pawnshop can issue bond if it satisfies conditions set forth by Vietnam Law for issuing a bond.
If you have any further inquiries, please feel free to contact us.
