Distribution Agreement in Vietnam: Template, Key Clauses and Local Law (2026)

A distribution agreement is a contract where a supplier (the principal) appoints an independent business (the distributor) to buy its products and resell them, in the distributor's own name and for its own account, inside a defined territory. The distributor takes title to the goods and carries the stock and credit risk. That is what separates a distributor from a commercial agent, who in Vietnam acts for the principal under the agency (dai ly) rules and does not take title in the same way. In Vietnam there is no single statute you fill in to create a valid distribution agreement, but several regimes shape it: the Commercial Law for the contract itself, the foreign-investment rules for whether a foreign-owned company may distribute at all, and the Competition Law for resale pricing and vertical restraints. This guide sets out the local law that actually bites, the clauses a Vietnam distribution agreement should contain, and a section-by-section skeleton you can adapt. It is general information, not legal advice. Confirm the detail with qualified Vietnamese counsel before you sign. ## Vietnam: the local law that shapes your agreement ### The Commercial Law The Law on Commerce, dated 14 June 2005, is the backbone. It governs the sale of goods, distribution, commercial agency and franchising, and gives the parties wide freedom to set commercial terms. There is no special distributor-protection statute and no automatic goodwill indemnity on termination, so the written contract carries most of the weight. ### Who may distribute: the foreign-trading rules The point that catches foreign suppliers out is the right to distribute at all. For a foreign-invested enterprise, goods-trading and distribution rights are controlled by Decree 09/2018/ND-CP, issued on 15 January 2018 under the Law on Commerce. The decree defines distribution to cover wholesale, retail, sales agency and franchising, and treats a distribution right as the right to carry out those activities directly. A foreign-invested company generally no longer needs a separate business licence to wholesale, but retail distribution still requires a licence, and an Economic Needs Test can apply before a licence is granted for a second and later retail outlet. An importation right does not by itself include the right to build a distribution system. Check the current framework before you rely on this, because the government has been preparing a replacement decree. ### Competition and resale pricing The Competition Law 2018, in force from 1 July 2019, governs vertical restraints. The authorities treat an agreement between a supplier and a distributor to fix a minimum resale price, whether directly or indirectly, as an anti-competitive agreement under Article 11, and guidance from the national competition authority lists supplier-to-distributor minimum resale price agreements as a form of indirect price fixing. Penalties can reach up to 10 percent of the enterprise's total turnover. Keep resale pricing to a recommendation and leave the distributor free to set its own price. ## The clauses a Vietnam distribution agreement should contain A workable distribution agreement sets out the commercial deal and the legal protections together. The core clauses are: - Appointment and territory. Name the parties and products, define the territory, and say whether the appointment is exclusive, non-exclusive or selective.

• Distribution rights and licensing. Where a foreign-invested distributor is involved, confirm it holds the trading or distribution licence the activity needs.
• Products and changes. Define the product range and say what happens when the supplier adds, discontinues or reformulates a product.
• Sales targets and minimums. Targets, how they are measured, and the consequence of a miss.
• Pricing and payment. Wholesale price and any recommended resale price (not a minimum), payment terms, currency and credit limits.
• Orders, delivery and risk. Ordering, lead times, delivery terms (an Incoterms rule), and when title and risk pass.
• Intellectual property and brand. A limited trade mark licence for resale only, with quality standards and no transfer of goodwill in the marks.
• Marketing and online sales. Marketing commitments and the rules on website and marketplace selling.
• Product compliance. Labelling, import permits, standards and sector licences that apply to the goods in Vietnam.
• Term, renewal and termination. Fixed or open-ended term, renewal mechanics, and termination for cause, insolvency and change of control, with the notice each requires.
• Post-termination. Stock buy-back, run-off sales, return of materials and survival of confidentiality.
• Confidentiality, data protection and non-compete. Confidentiality, a data protection clause fit for Vietnam's personal data rules, and any reasonable post-term non-compete.
• Governing law, language and disputes. Governing law, the court or arbitration seat, and the contract language. A Vietnamese-language version is often needed for local authorities. ## A distribution agreement skeleton you can adapt Use this running order as a drafting checklist. It is a skeleton, not a finished contract, and it is not legal advice. 1. Parties and recitals

2. Definitions
3. Appointment, territory and exclusivity
4. Distribution rights and licences
5. Products and product changes
6. Distributor obligations (targets, stock, promotion, standards)
7. Supplier obligations (supply, support, training, materials)
8. Pricing, orders, delivery, title and risk
9. Intellectual property and trade mark licence
10. Product compliance, labelling and import permits
11. Confidentiality and data protection
12. Term and renewal
13. Termination and notice periods
14. Consequences of termination (stock, run-off, non-compete)
15. Governing law, jurisdiction or arbitration, and language
16. Boilerplate (assignment, force majeure, notices, anti-bribery, entire agreement) ## Common mistakes to avoid - Ignoring the foreign-trading rules. A foreign-invested distributor needs the right trading or distribution licence, and retail carries extra steps including a possible Economic Needs Test. Confirm the licence position before you sign.

• Fixing the resale price. A supplier-to-distributor minimum resale price is treated as an anti-competitive agreement under the Competition Law 2018, with penalties up to 10 percent of turnover. Keep to a recommended price.
• Treating the import right as a distribution right. An importation right does not by itself allow building a distribution system in Vietnam.
• Skipping the Vietnamese-language version. Local authorities and courts often need one, and a mismatch between versions causes disputes.
• Keeping no records. Targets, price changes, licences, renewals and notice deadlines all need tracking. A missed renewal or a late notice undoes careful drafting. ## Keeping the agreement alive after signing The work does not stop at signature. A Vietnam distribution agreement sets targets to track, licences to keep current, a term and renewal date to diarise, price lists that change, and termination notice windows you cannot afford to miss. Most disputes come not from a badly drafted clause but from a renewal that auto-extended unnoticed or a licence that lapsed. That is the case for keeping drafting, review, version history and obligation tracking in one place rather than spread across email, a shared drive and a spreadsheet. Adira is one such AI workspace: you draft from your own templates, see each clause flagged as favourable, neutral or unfavourable to you, edit clauses in plain English, and keep a live timeline of every version, renewal and obligation, built on Anthropic's Claude. Adira is India-first today; deeper support for Vietnamese law is on its roadmap rather than live, so treat it as a workflow layer here and keep local counsel for the legal substance.