How is the business registration procedure regulated?

Currently, obtaining a business license is a mandatory procedure for any individual or organization wishing to operate a business legally. In the below article, NPLaw provides a clear understanding of the requirements, processes and procedures needed to successfully conduct business registration and meet the initial legal obligations before starting operations.

Currently, obtaining a business license is a mandatory procedure for any individual or organization wishing to operate a business legally. In the below article, NPLaw provides a clear understanding of the requirements, processes and procedures needed to successfully conduct business registration and meet the initial legal obligations before starting operations.

I. What is business registration? Is it complicated?

Under the Law on Enterprise 2014, business registration means the competent State authority provides a written document acknowledging the establishment of a business entity.

Although the Law on Enterprise 2020 removed the former term “business registration,” it is still defined in Clause 1, Article 3 of Decree 01/2021/NĐ-CP. Accordingly, business registration involves:

Registering information for an extended business, or updating information when changes occur,
Storing such data in the National Database on Business Registration.

Thus, the registration process is straightforward. It is also the State’s mechanism for managing and supervising economic activities.

II. Types of business eligible and ineligible for registration

Eligible types of business in Vietnam currently: Limited Liability Company (LLC), Joint Stock Company (JSC), State-Owned Enterprise, Private Enterprise, and Partnerships.
Ineligible types of business: Any business structure outside the aforesaid list is not permitted under current law.

III. Conditions for Business Registration Certificate

1. Conditions regarding the business lines for registration that are not prohibited from business investment.

Under Article 7, Law on Enterprise 2020, enterprises may freely operate in any sector not explicitly prohibited. Accordingly, the six (06) business lines prohibited by law from investment and business activities are specifically stipulated in Article 6 of the Law on Investment 2020, including:

Trade in drugs listed in Appendix I of the Law on Investment 2020;
Trade in certain chemicals/minerals listed in Appendix II;
Trade in specimens of wild plants and animals originating from natural exploitation as stipulated in Appendix I of the Convention on International Trade in Endangered Species of Wild Plants and Animals; specimens of endangered, rare, and precious forest plants, forest animals, and aquatic species of Group I originating from natural exploitation as stipulated in Appendix III of this Law;
Prostitution;
Trade in people, tissues, corpses, human body parts, and human fetuses;
Business activities related to human cloning;
Trade in explosives or fireworks;
Debt collection services.

Enterprises operating in conditional industries must also meet specific legal requirements before starting operations.

2. Requirements for enterprise name

Pursuant to Articles 37–41 of the Law on Enterprise 2020, enterprise name is set up as follows:

The name must consist of two parts:
Business type and a distinctive name, which may be written using Vietnamese alphabetic characters, the letters F, J, Z, W, numerals, and symbols.
The name must be displayed at its head office, branches, and representative offices, and appear on all documents, contracts, and publications issued by the enterprise.
Names must not:
+ Duplicate or cause confusion with existing enterprises;
+ Use names of State agencies, armed forces units, political organizations, socio-political organizations, socio-political-professional organizations, social organizations, or socio-professional organizations as part or all of the distinctive name, unless approved by the relevant organizations;
+ Obtain words or symbols violating historical traditions, culture, ethics, or public customs.
It is required to comply with regulations regarding foreign-language names, abbreviations, and the names of branches, representative offices, and business locations.

3. Conditions for valid documents of business registration

Based on Clause 20, Article 4 of the Law on Enterprise 2020, a valid dossier includes all required documents completed accurately and truthfully in accordance with the law. The specific documents depend on the business type and registration purpose and content in cases. The entity establishing the enterprise takes responsibility for the declared information’s truthfulness and accuracy.

4. Payment of business registration fees

Business registration fee shall be paid at the time of submitting the registration application in accordance with Circular No. 215/2016/TT-BTC dated November 10, 2016, issued by the Ministry of Finance, which stipulates the rates, collection methods, management, and use of fees for providing business information and business registration fees.

The business registration fee can be paid directly at the business registration authority or transferred to the business registration authority's bank account. For online business registration, the law provides for exemption from fees for the applicant.

IV. Procedures for registering new enterprises

1. What documents are required for the business registration application?

Preparing required registration documents, as follows:

Certified copies of ID/Passport (valid within 3 months). If the member is an organization, it need to additionally prepare the Enterprise Registration Certificate or Establishment Decision and a Power of attorney authorizing the person representing the organization to contribute capital;
Application form for business registration;
Drafted company charter;
Additional documents.

2. The business registration process

Step 1: Preparing necessary documents and information

A legally valid enterprise name that is not duplicate or cause confusion with existing enterprises, not already registered with other businesses in the national business registration system
A compliant enterprise address that is permitted for business registration and is not located in areas where business addresses are prohibited.
An appropriate charter capital, ensuring it meets statutory requirements for regulated industries
A legal representative that must be at least 18 years old, has full civil capacity, and certify experience and management skills in the sector the company intends to establish.

It notes that the duration for contributing the full charter capital is no more than 90 days from the date the enterprise is granted its business registration certificate to avoid sanctions.

Step 2: Preparing the application

NPLaw typically drafts the documents within 1–2 working days after receiving complete information. The documents will then be delivered to the customer or sent via email for review and signature.

Step 3: Submitting and obtaining the Certificate

Submission of the dossier to the Business Registration Office.
Processing time: 5–7 working days if the dossier is valid.

Step 4: Create, engraving the Company Seal, and submitting its notice

The seal must be legally registered and will appear on all official documnts.

Step 5: Completing the Initial Tax Registration after business registration

Initial tax registration is crucial for newly established enterprises, as it directly impacts their operations and development. The following tasks need to be completed:

Opening a bank account
Filing business license tax declarations
Submitting the initial tax declarations to the tax authorities;
Submitting and receiving notification of the VAT calculation method;
Submitting and receiving the result of "Request to use pre-printed invoices";
Preparing documents for the tax authorities to inspect the company's location.

Step 6: Printing and issuing invoices

Invoices are indispensable documents in business operations, playing a crucial role in recording the revenue and expenses of an enterprise and serving as an important basis for determining its financial obligations, especially tax obligations. Thus, enterprises need to implement the following matters such as:

Designing and printing invoices;
Submitting the invoice issuance notification with a digital signature.

V. Common questions on the business registration

1. Where does the company register its business?

The applicant shall implement the business registration at the Department of Planning and Investment in the province/city where the enterprise will be headquartered.

2. Processing time for the business registration

Typically, it takes about 3-5 days to obtain the Establishment License and the Enterprise Registration Certificate from the Department of Planning and Investment of Vietnam. This means the time to open a domestically owned company is approximately 3-5 days.

However, if the entity establishes an enterprise with foreign elements, it will take 15-30 days to obtain an Investment Registration License and 3-5 days to obtain the Business Registration Certificate. The total time required to open a company with foreign elements will be approximately 18-30 days.

3. Which entities are eligible to register a business as a business household?

According to current law, a business household is owned by an individual or household, can only register at one location, employs no more than ten workers; it does not have a seal, and is liable for its business activities with all of its assets. Households engaged in specific cases such as agriculture, forestry, fisheries, salt production, and those selling goods, snacks, or providing services with low income are not required to register their businesses.
All Vietnamese citizens aged 18 and above, with full legal capacity, and all households have the right to register a business as a business household, except for minors, persons with limited or no legal capacity, persons under criminal investigation or serving a prison sentence, or persons whose right to practice a profession has been revoked by a court.
An individual or household may only register one business household.