LEGAL FRAMEWORK FOR TOBACCO TRADING – LATEST CONDITIONS FOR TOBACCO BUSINESS
- Tiến sĩ Kinh tế Dương Thái Trung
- Dec 3, 2025
- 7 min read
Tobacco trading is one of the business sectors subject to special control, governed by a strict legal framework intended to limit tobacco harms and manage the entire supply chain from manufacturing – distribution – wholesale – retail.
Enterprises are only permitted to operate when they fully satisfy the business conditions applicable to each model and must maintain those conditions throughout the course of operation. Any tobacco trading without a license or in violation of regulations on business location, distribution system, supply sources, labeling, advertising, etc. may lead to very heavy administrative penalties or suspension of business.
1. Types of licenses
Current tobacco business licenses include:
• Tobacco manufacturing license (issued by the Ministry of Industry and Trade);• Tobacco distribution license (issued by the Ministry of Industry and Trade);• Tobacco wholesale license (issued by the provincial Department of Industry and Trade);• Tobacco retail license (issued by the district-level Division of Industry and Trade or Division of Economy).
These are mandatory licenses that enterprises must obtain when operating in the tobacco business sector under current law.
2. Latest tobacco business conditions – what enterprises need to know
To trade tobacco products, enterprises or household businesses must obtain a tobacco business license issued by the competent state authority. Depending on the type of activity such as manufacturing – distribution – wholesale – retail, specific conditions vary. However, in general, traders must meet requirements regarding the distribution system, facilities, and full compliance with tobacco-related regulations.
2.1. General conditions for tobacco trading
• Having an enterprise registration certificate, household business license, or cooperative registration, with business lines consistent with tobacco trading activities.• Tobacco business license: all activities such as manufacturing, trading, processing, import, and export must be licensed.• Compliance with relevant laws: including rules on display, advertising, labeling, and especially the prohibition of selling tobacco to persons under 18 years old.
2.2. Conditions by business model
2.2.1. Conditions for tobacco distribution
Under tobacco business regulations, a tobacco distributor is a trader that purchases tobacco products directly from a supplier or another distributor, then resells them to tobacco wholesalers and tobacco retailers.
In other words, distributors act as an intermediate link in the supply chain, ensuring that tobacco products from manufacturers/suppliers are lawfully transferred to wholesale and retail levels in the market.
Conditions for obtaining a tobacco distribution license:
Tobacco distribution is a conditional business line under strict state supervision to ensure origin, quality, and harm control. An enterprise seeking a Tobacco Distribution License must satisfy all requirements under the Law on Prevention and Control of Tobacco Harms 2012 and relevant guiding documents.
Key conditions include:
• Lawful establishment of the enterprise:The enterprise must be legally established under Vietnamese law and have registered business lines suitable for tobacco distribution.
• Business location not in prohibited tobacco-sale areas:The business premises must not fall within areas where tobacco sale is prohibited under Clause 2, Article 25 of the Law on Prevention and Control of Tobacco Harms 2012, such as medical facilities, educational establishments, children’s entertainment areas, childcare facilities, and 100% smoke-free indoor workplaces. The enterprise must ensure its premises are lawful and compliant.
• Distribution system in at least two (02) provinces/cities:A critical condition is that the enterprise must have a tobacco distribution system in at least two provinces/cities, and in each such province/city there must be at least one tobacco wholesaler within the system. This requirement aims to ensure actual distribution capacity and a stable sales network.
• Introduction letter from a tobacco supplier:The enterprise must obtain a supply/trading introduction letter from a tobacco supplier specifying the intended business territory. This document evidences lawful supply sources and distribution capability.
To lawfully operate as a tobacco distributor, the enterprise must meet all four conditions above and prepare a proper application dossier for the Tobacco Distribution License. Full compliance from the outset helps avoid risks of penalties, license revocation, or suspension.
2.2.2. Conditions for tobacco wholesale
• Conditions on business entity:The trader must be a lawfully established enterprise under Vietnamese law with registered business lines suitable for tobacco wholesale.
• Conditions on business location:The business location must not be in prohibited tobacco-sale areas under Clause 2, Article 25 of the Law on Prevention and Control of Tobacco Harms 2012, such as schools, medical facilities, child care and nurturing establishments, children’s entertainment areas, and fully smoke-free indoor workplaces. The enterprise must choose a compliant location.
• Lawful tobacco wholesale system:The enterprise must maintain a wholesale system within the province where its head office is located, including at least two tobacco retailers within the system. This condition demonstrates distribution capacity and a stable consumption network.
• Introduction letter from supplier:The enterprise must obtain an introduction letter from a tobacco supplier or a tobacco distributor, clearly stating the intended business territory to prove lawful and transparent supply.
• Commitments on fire safety and environment:The enterprise must provide commitments to comply with fire prevention and fighting regulations and environmental protection requirements under applicable law.
To obtain a Tobacco Wholesale License, the enterprise must satisfy all five conditions above. Preparing a complete and proper dossier from the beginning reduces the risk of rejection, saves time, and ensures lawful operations.
2.2.3. Conditions for tobacco retail
To trade tobacco products at retail level, individuals or organizations must obtain a Tobacco Retail License issued by the competent authority. This is a conditional business line managed strictly to protect public health and control the consumer market.
Under the Law on Prevention and Control of Tobacco Harms 2012 and Decree 67/2013/ND-CP (as amended by Decree 106/2017 and Decree 17/2020), a trader opening a tobacco retail outlet must satisfy:
• Lawful trader status:The business owner must be properly registered as a trader. The form can be an enterprise or household business, but the registered business line must be suitable.
• Fixed business location not in prohibited tobacco-sale areas:The retail location must be fixed, clearly identified, and legally used, and must not be within prohibited tobacco-sale areas, including:
Areas where tobacco sale and smoking are entirely prohibited: educational establishments (nursery, kindergarten, primary, lower secondary, upper secondary schools), hospitals and medical research institutes, maternity homes, preventive medical centers, medical stations, childcare and nurturing facilities, and indoor children’s play areas.
Minimum distance requirement: tobacco sale is prohibited within 100 meters from the gates of schools, medical facilities, and childcare establishments.This requirement is commonly inspected and strictly sanctioned if violated.
• Introduction letter from a distributor or wholesaler:Retailers must have an introduction letter from a tobacco distributor or wholesaler specifying the intended business territory. This proves lawful supply linkage within the tobacco distribution chain.
To obtain a Tobacco Retail License, the trader must simultaneously satisfy three conditions:✓ Lawful establishment✓ Compliant business location outside prohibited zones✓ Lawful supply introduction letter
Proper dossier preparation helps the licensing process proceed smoothly and reduces the risk of refusal or later penalties.
3. Conditions for tobacco manufacturing
In Vietnam, tobacco manufacturing is a conditional investment and business sector under strict state control to limit harms and manage the supply chain. Relevant regulations are detailed in Decree 67/2013/ND-CP, Decree 106/2017/ND-CP, Decree 08/2018/ND-CP, Decree 17/2020/ND-CP, and Circular 57/2018/TT-BCT.
3.1. Definition of tobacco products
Under law, tobacco products are made wholly or partly from tobacco raw materials and processed into forms such as cigarettes, cigars, pipe tobacco, and other products used for smoking, chewing, or inhaling. These products are specially regulated and may only be manufactured under a valid license.
3.2. Conditions for obtaining a tobacco manufacturing license
An enterprise applying for a Tobacco Manufacturing License must meet all of the following:
Condition 1: Enterprise eligibilityThe enterprise must fall into one of two cases:• lawfully manufacturing tobacco products before 14 August 2000; or• having an investment policy approved by the Prime Minister for merger or joint venture tobacco manufacturing.This is a pre-licensing control condition limiting new tobacco manufacturers.
Condition 2: Investment and use of domestic tobacco raw materialsParticipation in investment in tobacco growing areasThe enterprise must directly invest or cooperate in investment with an enterprise holding a certificate of eligibility for tobacco cultivation investment, corresponding to production scale.
Use of domestic raw materials• Domestic tobacco raw materials must be prioritized.• Imports are allowed only for shortages under annual import plans announced by the Ministry of Industry and Trade.• For foreign-brand manufacturing or export production, raw materials may follow specific contractual requirements.
Condition 3: Specialized machinery and equipmentThe enterprise must have an appropriate specialized production line including key stages such as cigarette rolling and packaging, and other specialized equipment as required. Detailed lists are provided in Appendix 72 of Circular 57/2018/TT-BCT (as amended by Circular 08/2023/TT-BCT). This is a mandatory technical criterion for licensing appraisal.
3.3. Licensing authority for tobacco manufacturing
The competent authority issuing a Tobacco Manufacturing License is the Ministry of Industry and Trade. Enterprises may only manufacture tobacco products after obtaining a valid license.
Tobacco manufacturing is a specially controlled business line with stringent conditions on enterprise status, raw materials and cultivation investment, specialized machinery, and operational scale. Full compliance is mandatory for licensing and lawful production implementation.
Tobacco trading is a specially controlled sector governed by a multi-layered, strict, and frequently updated legal framework. From distribution – wholesale – retail conditions to requirements on business locations, lawful supply sources, and reporting duties, enterprises can only operate stably when fully understanding and strictly complying from the dossier-preparation stage onward.
In practice, many enterprises have been penalized, had licenses revoked, or were forced to cease operations due to insufficient information, incomplete/incorrect dossiers, or failure to maintain licensing conditions after issuance. This shows that professional legal support is essential to reduce compliance risks and ensure sustainable operations.
Vietlink Law Firm is proud to be a specialized legal advisor in the Industry and Trade sector, with experienced lawyers and experts in tobacco, alcohol, gas, petroleum, commercial infrastructure, and other restricted business lines. We provide comprehensive legal solutions, including:
• Advising on statutory conditions and designing compliant business models;• Drafting and completing dossiers for tobacco distribution, wholesale, and retail licenses;• Representing enterprises in working with DOIT, MOIT, and other authorities;• Reviewing compliance systems to prevent inspection and sanction risks;• Providing ongoing legal advisory services for Industry and Trade enterprises.
With the principle of “Accuracy – Speed – Long-term Partnership,” Vietlink is committed to delivering effective, tailored, and fully compliant legal solutions under current law.
Vietlink Law Firm – Your trusted legal partner in Industry and Trade sectors.
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