A business household is registered and established by an individual or members of a household who are simultaneously responsible for all of their assets. However, not everyone can establish a business household, but must meet the legal requirements. Does the law allow foreigners to establish business households in Vietnam? NPLaw will answer your questions about foreigners establishing business households in Vietnam through the following article.

I. Current situations of foreigners establishing business households in Vietnam

1. Are foreigners allowed to establish business households in Vietnam?

According to Clause 1, Article 5 of the Nationality Law 2008, a person with Vietnamese nationality is a Vietnamese citizen. Therefore, foreigners without Vietnamese nationality are not allowed to establish business households.

2. Authorizing Vietnamese citizens to establish business households on behalf of foreigners

This authorization will be made through an authorization contract according to the provisions of the Civil Code 2015. Specifically, the authorizing party is the foreigner who wants to establish a business household, and the authorized party is a Vietnamese citizen who fully meets the conditions to establish a business household.

Picture 1On the business household registration certificates, the business household owners are the authorized persons. Foreigners can completely be the managers and operators of the business households and enjoy the profits from the business activities of those business households. These contents will be specified in the authorization contracts.

Thus, foreigners cannot establish business households in Vietnam, but they can authorize Vietnamese citizens to have the right to manage and operate and enjoy all benefits as the owners of business households.

3. Foreigners naturalized in Vietnam to be able to establish business households in Vietnam

The conditions to establish business households are that individuals or household members must be Vietnamese citizens. Thus, foreigners can naturalize in Vietnam to be able to establish business households in Vietnam. However, foreigners need to meet the conditions for naturalization in Vietnam according to Article 19 of the Law on Nationality 2018, specifically:

  • Having full civil capacity according to the regulations of Vietnamese Law;
  • Complying with the Constitution and Vietnamese Law; respecting the traditions, customs, and practices of the Vietnamese people;

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  • Knowing Vietnamese well enough to integrate into the Vietnamese community;
  • Having been permanently residing in Vietnam for at least 5 years before the time of applying for Vietnamese nationality;
  • Having the ability to secure a living in Vietnam.

4. Characteristics  of business households for foreigners

The specific legal characteristics of business households include the following main characteristics:

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  • A business household is owned by an individual or a group of authorized persons on the business household registration certificate, representing the household to establish civil transactions within the scope of representation. Foreigners can be the managers and operators of business households and enjoy the profits from the business activities of those business households.
  • Business households usually operate on a small scale.
  • The owners of the business households (here are foreigners) are fully liable for business activities. If the business assets are not enough to pay the debts, business households must use all assets not invested to pay the debts.

III. Answering some questions about foreigners establishing business households in Vietnam

1. In which  cases are foreigners not allowed to establish business households in Vietnam?

According to current Vietnamese law, the legal regulations do not allow foreigners to establish business households in Vietnam.

2. How many sets of documents do foreigners need to submit to establish a business household?

The number of documents needed to establish a business household for an individual is 01 set.

3. When are foreigners allowed to establish enterprises in Vietnam under the Law on Enterprise?

According to Clause 1, Article 17 of the Law on Enterprise 2020, all organizations and individuals have the right to establish and manage enterprises in Vietnam, except for cases where they are not allowed to establish enterprises as specified in Clause 2, Article 17 of the Law on Enterprise 2020. At the same time, individuals with foreign nationality who invest in business activities in Vietnam are considered foreign investors according to Clause 19, Article 3 of the Law on Investment 2020. The Law on Enterprise 2020 does not have regulations limiting the type of enterprise for foreign investors. Therefore, investors can choose:

  • Limited liability company with one member;
  • Limited liability company with two or more members;
  • Joint Stock Company;
  • Partnership.

In Clause 1, Article 7 of the Law on Enterprise 2020, enterprises are free to operate in any industry or field that is not prohibited by law. Thus, foreigners are allowed to establish enterprises in Vietnam as foreign investors when doing business in industries and fields that are not prohibited by Law.

The above information is provided by NPLAW to answer questions about foreigners establishing business households in Vietnam. If you have any further questions, please contact NPLAW at the following contact information: