Franchise agreement in Vietnam: who registers with MOIT, what to disclose and how to draft the key clauses

A franchise agreement in Vietnam is a contract under which the franchisor allows and requires the franchisee to sell goods or provide services on its own account, following the franchisor's business system and under the franchisor's trademark, trade name, know-how, slogans, logos and advertising, while the franchisor controls and supports the franchisee's operations (Article 284 of the Law on Commerce 36/2005/QH11, consolidated text 113/VBHN-VPQH). The agreement must be in writing or an equivalent form (Article 285) and must be made in Vietnamese, unless the franchise runs from Vietnam to another country (Article 12 of Decree 35/2006/ND-CP).

For a foreign brand, three rules matter most. The only remaining franchisor condition is that the business system has operated for at least one year. A franchisor based abroad must register with the Ministry of Industry and Trade (MOIT) before franchising into Vietnam, while domestic and outbound franchises only report to the provincial Department of Industry and Trade. And every franchisor, foreign or local, must hand the prospective franchisee a disclosure document and its standard agreement at least 15 working days before signing, unless the parties agree otherwise. This guide reflects the texts in force as of 14 October 2026.

What is a franchise agreement in Vietnam?#

Article 284 has three markers: the franchisee runs the business in its own name and with its own capital; it follows a system set by the franchisor and trades under the franchisor's identity; and the franchisor has the right to control and the duty to support. Without a system and control, the arrangement is usually a trademark licence or a supply deal, and different rules apply.

Decree 35/2006/ND-CP (Article 3) recognises a single-unit franchise, a development agreement under which the franchisee opens more than one outlet of its own in a defined territory (paragraph 8), and a master franchise, under which the primary franchisee may grant sub-franchises but sub-franchisees may not grant further (paragraphs 3, 4, 9 and 10). Both sides must be traders (Articles 286 to 289). Commercial matters not governed by the Law on Commerce or other laws fall under the Civil Code (Article 4(3) of the Law on Commerce).

Model	Who trades and carries the risk	Control over operations	State filing
Franchise	Franchisee invests and keeps the profit or loss	Yes, a full system (Article 286(3))	MOIT if the franchisor is abroad
Commercial agency	Agent sells in its own name, but the goods stay with the principal	Mainly price and reporting	None
Buy-sell distribution	Distributor buys and resells, carries stock risk	As agreed	None
Trademark licence	Licensee uses the mark on its own goods or services	Usually quality control only	Not required for trademarks since 1 April 2026
Technology transfer	Transferee applies the technology in its own production	As agreed	Required for cross-border or state-funded transfers

A restaurant or retail chain often combines several of these: the franchise agreement in Vietnam itself, a supply agreement (an international sale of goods contract where the supplier is abroad) and sometimes a technology component. Each part follows its own law and tax treatment.

What conditions still apply to the franchisor?#

Many guides still list the conditions in the 2006 version of Decree 35. Two later decrees cut them down:

Condition	Status on 14 October 2026
The business system has operated for at least one year	Still applies: Article 5 as replaced by Article 8 of Decree 08/2018/ND-CP
A Vietnamese master franchisee of a foreign franchisor must operate the franchise in Vietnam for one year before sub-franchising	Dropped from the new Article 5
Registration as a precondition for franchising	No longer a condition; the registration duty itself remains for inbound franchises
Franchisee business-line condition (Article 6); permitted goods and services (Article 7)	Repealed by Article 9 of Decree 08/2018/ND-CP

For a foreign brand preparing a franchise agreement in Vietnam, the key point is that the current Article 5 does not say the one-year operation must be in Vietnam, so a brand that has run its system abroad for a year meets the wording. Because the "one year in Vietnam" rule for master franchisees is gone, a Vietnamese master franchisee may sub-franchise as soon as the master agreement is signed, provided the brand's system has run for a year, the franchisor consents (Article 290 of the Law on Commerce) and the sub-franchisee receives the information required by Article 8(3) of Decree 35. Repealing Articles 6 and 7 does not lift sector licensing: a franchised pharmacy, clinic or kindergarten still needs the licences of its sector. A foreign-invested franchisee that retails goods usually needs a Business Licence and a Retail Outlet Licence: under Decree 09/2018/ND-CP until 17 October 2026, and from 18 October 2026 under Article 5(1)(a) and 5(2) of Decree 342/2026/ND-CP (Article 45(1) and (2)); see our business licences for foreign-invested companies service.

Does a franchise agreement in Vietnam need to be registered?#

Article 291 of the Law on Commerce still says the prospective franchisor must register with the Ministry of Trade (now MOIT) before franchising, and leaves the procedure to the Government. Decree 120/2011/ND-CP then added Article 17a to Decree 35/2006/ND-CP and narrowed franchise registration in Vietnam to one direction:

Direction	Obligation	Basis
From abroad into Vietnam, including from export processing zones, non-tariff zones and separate customs areas into the domestic market	Register with MOIT before franchising	Article 17; Article 18(1)(a) of Decree 35/2006
Within Vietnam	No registration; report to the provincial Department of Industry and Trade	Article 17a(1)(a) and 17a(2)
From Vietnam to another country	No registration; report to the provincial Department of Industry and Trade	Article 17a(1)(b) and 17a(2)

What decides the filing is where the franchisor sits. A Singapore brand grants a master franchise to a Vietnamese company: the Singapore company registers with MOIT. The Vietnamese master franchisee then sub-franchises to third-party outlets in Vietnam: that is a domestic franchise, so it reports to the Department of Industry and Trade but does not register. A regional master franchisee based in Malaysia sub-franchises into Vietnam: it registers as a secondary franchisor and files the original franchisor's consent to sub-franchising (Section II(2)(dd) of Circular 09/2006/TT-BTM, consolidated text 14/VBHN-BCT). The local franchisee never registers, but it should ask for a copy of the MOIT registration notice before paying the initial fee.

Three points often missed:

1. Registration does not decide validity. A franchise agreement takes effect when signed unless the parties agree otherwise (Article 14(1) of Decree 35/2006). This is the opposite of a cross-border technology transfer agreement, which only takes effect once its registration certificate is issued (Article 24(3) of the Law on Technology Transfer). Failing to register is an administrative offence; it does not void the contract.
2. The Law and the Decree do not match word for word, but practice follows the Decree. Article 291 does not distinguish directions; the exemption sits in the Decree. MOIT publishes a single registration procedure, "Registration of franchising from abroad into Vietnam" (procedure code 2.000168 on the national public services portal), the application form (Form MD-1) only has a line for that direction, and Circular 03/2024/TT-BCT repealed the provision under which provincial Departments registered domestic franchises (Section I(2) of Circular 09); when drafting it, MOIT gave as the reason that Decree 120/2011/ND-CP had already abolished domestic registration. The comparison table MOIT prepared in 2026 for its draft law amending the Law on Commerce proposes no change to Articles 284 to 291.
3. The domestic "report" has no set form. Decree 120/2011/ND-CP only says franchises exempt from registration "must comply with the reporting regime to the Department of Industry and Trade" (Article 17a(2)) and has the Department report periodically to MOIT (Article 4(4) of Decree 35 as amended). Section V(2) of the Circular, as amended by Circular 03/2024/TT-BCT, tells the Department to "receive reports" but sets no form or period, and we found no national form. Ask the Department where the company is registered before signing the first franchise. Failing to report when a state authority asks is itself fineable (Article 75(2)(dd) of Decree 98/2020/ND-CP).

Franchise registration in Vietnam: the MOIT procedure#

Franchise registration in Vietnam is filed with MOIT by the foreign franchisor (Sections I(1) and V(1) of the Circular). The dossier (Article 19 of Decree 35/2006; Section II(2) of the Circular) is:

1. the application on Form MD-1 (Appendix II);
2. the franchise disclosure document in the format of Appendix III;
3. a copy of the franchisor's business registration certificate or equivalent, certified by the authority of its home country;
4. copies of industrial property certificates in Vietnam or abroad, where the franchise licenses registered industrial property;
5. the original franchisor's written consent, where the applicant is a secondary franchisor.

The two texts set different legalisation rules. The Circular only requires the foreign business registration certificate to be consularly legalised; other foreign-language documents need only a translation notarised in Vietnam (Section II(4)). Article 19(4) of Decree 35/2006, as amended by Decree 120/2011/ND-CP, requires legalisation of every document under Article 19(2) and (3), which includes the disclosure document and any IP certificates issued abroad. A decree ranks above a circular and the MOIT procedure page is silent, so the safe course is to legalise every document made abroad or confirm with MOIT before filing. The disclosure document is a private document, so it usually has to be notarised in the home country before it can be legalised. Certificates issued by Vietnam's IP Office need no legalisation. From 11 September 2026, a public document of a state party to the Apostille Convention that applies the Convention with Vietnam, carrying a valid apostille, is exempt from consular legalisation, and Vietnamese authorities, MOIT included, may not ask for further certification (Article 25(2) and (3) and Article 34 of Decree 293/2026/ND-CP). Notarial acts count as public documents (Article 3(3)), so a disclosure document notarised abroad can also take an apostille. Check that the issuing country is in an applicable relationship with Vietnam before ordering one.

Trademark certificates are filed only "where applicable": the rules do not make a registered Vietnamese trademark a precondition for franchise registration. Commercially, though, a mark not registered in Vietnam is hard to enforce, and franchisees may face infringement claims from a local registrant. Run a Vietnamese trademark search before signing.

Timeline. Within 5 working days of a complete dossier, MOIT enters the franchise in its register and notifies the franchisor in writing, or refuses with reasons; an incomplete dossier triggers a request for more documents within 2 working days, and the clock restarts once the dossier is complete (Article 20(1) of Decree 35/2006; Section II(5) and (6) of the Circular).

Fee. No registration fee is currently charged, although Article 23 of the Decree still mentions one. The franchise registration fee is not in the list of fees and charges attached to the Law on Fees and Charges 2015, so Decision 106/2008/QD-BTC (the VND 16.5 million fee many guides still quote) ceased to have effect on 1 January 2017 (item 117 of the list attached to Ministry of Finance Decision 2840/QD-BTC of 30 December 2016). Circular 03/2024/TT-BCT repealed the fee provision in Circular 09 (Section I(3)(d)), and MOIT's page for procedure 2.000168 shows a fee of zero.

After registration, the franchisor must notify changes to Part A of the disclosure document, its legal status or its IP certificates within 30 days (Article 21 of the Decree; Section III of the Circular, Form TB-5), and send MOIT an update of Part B by 15 January each year (note to Part B, Appendix III). MOIT deletes the registration if the franchisor stops trading, changes business lines or loses its registration certificate (Article 22 of the Decree).

What must be disclosed before signing a franchise agreement in Vietnam?#

The franchisor must give the prospective franchisee a copy of its standard franchise agreement and its franchise disclosure document at least 15 working days before signing, unless the parties agree otherwise (Article 8(1) of Decree 35/2006). The duty applies to every franchise agreement in Vietnam, domestic ones included. A master franchisee granting sub-franchises must also tell the sub-franchisee in writing who granted the master franchise, what the master agreement says, and what happens to sub-franchise agreements if the master agreement ends (Article 8(3)). The prospective franchisee, for its part, must provide information the franchisor reasonably requests (Article 9).

Appendix III of the Circular sets the content. Part A covers the franchisor's identity, whether it is an original or secondary franchisor, the business sector and the trademarks and IP used. Part B covers the organisation chart and management, franchising experience, franchise-related litigation in the last year, initial fees and when they are refundable, ongoing fees (royalties, advertising, training, services, rent), initial investment, required purchases or leases of equipment, the franchisor's obligations and training, a market description, the main terms of the standard agreement, system statistics (outlets open and closed, agreements signed, transferred, terminated by each side or not renewed) and audited financial statements for the latest year. The franchisor signs a statement that the system has operated for at least one year and that the information is true.

A global franchise disclosure document can usually be adapted, as long as every Appendix III heading and the one-year statement are covered. The "unless otherwise agreed" wording lets the parties shorten the 15-day period. In our reading it should not be used to skip the disclosure document altogether: its mandatory content is set by the Ministry, and incomplete disclosure is fineable (Article 75(2)(c) and (d) of Decree 98/2020/ND-CP). The franchisor must also promptly tell all franchisees about material changes to the system (Article 8(2)).

Drafting a franchise agreement in Vietnam: which clauses matter?#

Article 11 of Decree 35/2006 lists the main content a franchise agreement in Vietnam "may" contain where Vietnamese law is chosen: the franchise rights; each party's rights and obligations; prices, periodic franchise fees and payment; term; renewal, termination and dispute resolution. The word "may" makes the list softer than a mandatory rule, but include every item anyway: Decree 98/2020/ND-CP fines agreements whose "language and main content" do not comply (Article 75(2)(b)). The default rights and duties in Articles 286 to 289 of the Law on Commerce all apply "unless otherwise agreed", so the drafting decides most outcomes.

Clause	What to cover	Basis and notes
Franchise rights	Trademarks (registration numbers), operations manual, know-how, software; type of agreement	Article 284; Article 3(6) of Decree 35
Territory and exclusivity	Area, number of outlets and opening schedule, online sales, whether the franchisor may open its own outlets	See the competition section
Franchise fee	Initial fee, royalty (percentage of which revenue), marketing fund, currency, who bears foreign contractor tax, refund cases	Article 11(4) of Decree 35; Article 289(1)
Training, support, audits	Initial training, ongoing support, outlet design at the franchisee's cost, scheduled and unannounced inspections	Articles 286(3), 287 and 289(3)
Supply	What must be bought from the franchisor or nominated suppliers, tied to which quality standard	Article 144(2) of the IP Law
Confidentiality and non-compete	Know-how kept confidential after termination; scope and length of any non-compete	Article 289(4); see NDAs in Vietnam
Customer data	Each party's role, sharing, transfers abroad	Law 91/2025/QH15
Transfer and sub-franchising	Sale of an outlet, change of control of the franchisee	Article 290 of the Law on Commerce; Article 15 of Decree 35
Term and termination	Term matched to payback; termination grounds and cure periods; post-termination steps	Articles 13 and 16 of Decree 35; Article 289(5)
Penalties and damages	Contractual penalty capped at 8% of the breached obligation; penalty and damages can be combined	Articles 300, 301 and 307(2) of the Law on Commerce; contract penalties in Vietnam
Language, governing law, disputes	Vietnamese version; which version prevails; arbitration or court	Article 12 of Decree 35; Articles 5(2) and 317 of the Law on Commerce

Franchise fee. Vietnamese law does not cap franchise fees. Split each fee by what it pays for: use of the trademark and know-how, training and support services, goods and equipment, technology. The split drives tax and whether a technology transfer filing is needed. The refund terms must match what the disclosure document said.

Transfers. The franchisee may only sub-franchise with the franchisor's consent (Articles 289(7) and 290). Where the franchisee wants to sell its outlet and transfer the franchise, Article 15 of Decree 35 says the franchisor must reply within 15 days, silence counts as consent, and the franchisor may only refuse on the five grounds in Article 15(3), such as the buyer failing the financial obligations or the selection criteria, or the transfer seriously harming the system. Article 15(2) and (3) carry no "unless otherwise agreed" wording, unlike Articles 286 to 289 of the Law on Commerce, and paragraph 3 says the franchisor "may only refuse" on those grounds, so a global template's "sole discretion to refuse" clause may not hold. We have found no official guidance or court decision on whether parties to a franchise agreement in Vietnam can contract out of Article 15. Article 15(1)(a) refers to Article 6, repealed in 2018, so the only remaining condition is the franchisor's consent. Write concrete selection criteria so that a refusal under Article 15(3)(b) has a basis.

Termination. The franchisee may terminate unilaterally if the franchisor breaches its statutory duties under Article 287 of the Law on Commerce (manuals, training, technical support, IP warranty, equal treatment). The franchisor may terminate if the franchisee loses a required licence, is dissolved or bankrupt, commits a serious legal breach that could badly damage the system's reputation, or fails to cure a non-fundamental breach within a reasonable time after written notice (Article 16 of Decree 35). Define "reasonable time" in days. Unlike commercial agency, franchising carries no statutory termination indemnity; any buy-back of outlets must be agreed. Continuing to operate after the agreement has expired is a fineable offence (Article 75(4)(b) of Decree 98/2020/ND-CP), so set firm de-branding deadlines.

Language and disputes. Bilingual agreements are standard. Article 12 of Decree 35 only requires a Vietnamese version; we found no rule or guidance on which version prevails if they differ, so state it in the agreement, and review the Vietnamese text as closely as the English, since that is the text Vietnamese authorities will read. Parties to a transaction with a foreign element may choose a foreign governing law if it does not contradict the fundamental principles of Vietnamese law (Article 5(2) of the Law on Commerce). In our reading, the registration, disclosure and language rules should still be followed for a franchise agreement in Vietnam whatever law governs it. Arbitration needs a written arbitration agreement (Articles 2 and 16 of the Law on Commercial Arbitration); see commercial arbitration in Vietnam.

Trademarks, know-how and technology#

The licence of industrial property inside a franchise may be set out as a separate part of the agreement, governed by IP law and effective under that law (Articles 10 and 14(2) of Decree 35/2006). The Law on Intellectual Property (consolidated text 160/2026/VBHN-LQ-VPQH) adds four points:

• Trademark licences no longer need recording to bind third parties. From 1 April 2026, licences of registered industrial property must be registered to have legal effect against third parties, "except trademark licences" (Article 148(3), as amended by Law 131/2025/QH15). Between the parties the licence takes effect as agreed (Article 148(2)) and ends automatically if the licensor's right ends (Article 148(4)).
• Trade names cannot be licensed (Article 142(1)), even though Article 284 of the Law on Commerce lists the trade name as a franchise element. In our reading, the agreement should license the trademarks and brand identity, and the franchisee should trade under its own company name.
• Sub-licensing needs the licensor's permission (Article 142(3)).
• Void clauses (Article 144(2) and (3)): bans on improvements (except to trademarks), compulsory free grant-back of improvements, unjustified export restrictions, forced purchases from the licensor or its nominee that are not meant to ensure quality, and bans on challenging the right. Supply obligations in a franchise should therefore be tied to described quality standards.

Technology. Franchising is one of the cases that can include a technology transfer component (Article 5(2)(c) of the Law on Technology Transfer 07/2017/QH14, consolidated text 138/2026/VBHN-LQ-VPQH), set out in a separate agreement or in clauses or an appendix containing the items in Article 23 (Article 5(4)). If that component runs into or out of Vietnam, it must be registered with the science and technology authority within 90 days of signing (Article 31(1)(a) and (b) and 31(4)), and an agreement subject to registration only takes effect when the certificate is issued (Article 24(3)). The law does not say whether that rule reaches the whole franchise agreement in Vietnam or only its technology component. Article 31(1) distinguishes a "technology transfer contract" from a "technology transfer component", while Article 24(3) only mentions the contract, and Article 14(1) of Decree 35 makes a franchise agreement in Vietnam effective on signing. On that wording, the certificate date should only govern the technology component. Decree 101/2026/ND-CP, which replaced Decree 76/2018/ND-CP from 1 April 2026 (Article 69), does not address the point, and we have seen no guidance from the Ministry of Science and Technology. So put the technology part in a separate appendix and state when each part takes effect. A store operations manual is not necessarily "technology"; proprietary recipes, production processes or software may be. See technology transfer contracts in Vietnam.

Can exclusivity in a franchise agreement in Vietnam breach competition law?#

Fixed resale prices, exclusive territories and bans on selling outside the system resemble the restrictive agreements in Article 11 of the Competition Law 23/2018/QH14: price fixing (paragraph 1), market or customer sharing (paragraph 2), imposing obligations unrelated to the subject of the contract (paragraph 8) and refusing to deal with outsiders (paragraph 9).

• Franchisor and franchisee operate at different levels of the same supply chain, so these agreements are only prohibited where they cause or may cause a significant restrictive effect (Article 12(4)), assessed on market share, entry barriers and the other factors in Article 13(1). A vertical agreement is deemed to have no significant effect where each party's market share is below 15% (Article 11(3)(b) of Decree 35/2020/ND-CP implementing the Competition Law); our guide to the distribution agreement in Vietnam explains how that threshold works.
• Franchisees in the same relevant market compete with each other. If they agree prices or split customers, the agreement is prohibited without proof of significant effect (Article 12(1)). In our view the same risk can arise where the franchisor relays a common price among franchisees.
• A prohibited agreement may obtain a time-limited exemption if it benefits consumers and meets one of the conditions in Article 14(1), such as promoting uniform quality standards; the parties must apply to the National Competition Commission first (Article 15).

Our view: recommended prices and time-limited exclusive territories in a small-share system carry little risk. Mandatory resale prices or long post-term non-competes in a large chain deserve a separate review. Neither the Law on Commerce nor Decree 35 deals specifically with non-competes that run after a franchise ends, and we have found no precedent or guidance on the length or scope that would be upheld. The limits that do exist come from the Competition Law above and Article 144 of the IP Law where the covenant is tied to a licence, so keep any post-term non-compete short, local and tied to protecting know-how.

Tax on franchise fees paid abroad#

A foreign franchisor without a permanent establishment in Vietnam is usually subject to foreign contractor tax, withheld and paid by the Vietnamese franchisee. Corporate income tax is charged on revenue at 10% for royalties and 5% for services (Article 12(3)(c) and (a) of Decree 320/2025/ND-CP). Royalties are defined broadly as payments "in any form" for the right to own or use property, including IP rights (Article 3(3)(d) of Decree 320). The part of the fees under a franchise agreement in Vietnam that pays for the trademark and know-how is therefore taxed at 10%; the Ho Chi Minh City Tax Department applied 10% to a franchise fee calculated on monthly revenue and paid to a Japanese franchisor (Official Letter 6963/CT-TTHT of 5 August 2015). Training and support that can be priced separately are services at 5%; where a contract covers several activities and their values cannot be separated, the highest rate applies to the whole contract (Article 7(5)(b) of Circular 20/2026/TT-BTC).

For VAT, only technology transfer and the "assignment of IP rights" are outside VAT (Article 5(21) of the Law on Value Added Tax 48/2024/QH15; Article 4(13) of Decree 181/2025/ND-CP). The IP Law treats assignment of ownership (Article 138) and licensing of use (Article 141) as different transactions. The Ministry of Finance has ruled that a franchise granting only the right to use IP is subject to VAT, and only a franchise that includes an assignment of IP rights is outside VAT (Official Letter 18115/BTC-TCT of 27 December 2013), and that letting a Vietnamese party use a trademark for a fee is a licence, not an assignment of IP rights (Official Letter 15888/BTC-CST of 7 November 2016). Those letters were issued under the previous VAT law, but the exemption wording has not changed, so franchise fees and ordinary trademark fees bear VAT. Only a separately priced technology transfer component falls outside VAT.

A franchise agreement in Vietnam should state whether fees are net or gross of Vietnamese tax and require the franchisor to provide a tax residence certificate so a double tax treaty can be applied. See foreign contractor tax in Vietnam for rates, calculation and filing.

Customer data shared across the network#

Loyalty programmes, ordering apps and shared point-of-sale systems move customer data between franchisees and the franchisor. The franchise agreement in Vietnam should say who decides the purposes and means of processing (controller) and who processes on instructions (processor) (Article 2(7), (8) and (9) of the Law on Personal Data Protection 91/2025/QH15); see controller vs processor. A franchisor abroad that receives or accesses customer data collected in Vietnam triggers the cross-border transfer rules in Article 20; see cross-border data transfer.

Penalties for franchise breaches#

Article 75 of Decree 98/2020/ND-CP (consolidated text 03/VBHN-BCT of 2025; Decrees 17/2022 and 24/2025 did not change Article 75) sets fines for individuals; organisations pay double (Article 4(4)(b)):

Breach	Individual (VND)	Organisation (VND)
Franchising without a compliant contract (paragraph 1)	1–3 million	2–6 million
False registration filings; non-compliant contract language or main content; untrue or incomplete disclosure document; failure to provide information; failure to report when the authority requests (paragraph 2)	3–5 million	6–10 million
Failure to register; franchising without meeting the conditions; failure to notify changes (paragraph 3)	5–10 million	10–20 million
Franchising goods that need a licence, or are under emergency circulation measures, without the licence or conditions; continuing after the agreement has expired (paragraph 4)	10–30 million	20–60 million
Franchising prohibited goods or services (paragraph 5)	30–50 million	60–100 million

Illegal gains must also be surrendered (Article 75(6)). As of 14 October 2026 we have not seen a decree replacing Decree 98/2020/ND-CP; if one is issued, the fines may change.

If you are bringing a brand into Vietnam, taking a master franchise as a Vietnamese partner, or adapting a global template, LexData can draft or review your franchise agreement in Vietnam, the disclosure document and the MOIT filing through our commercial contracts service.