The issuance of a Business License (or Enterprise Registration Certificate) is a mandatory condition for individuals and organizations to operate lawfully in most business sectors in Vietnam. In practice, however, there are many cases where an application for a license is refused or a license that has been revoked cannot be reissued. In such circumstances, what should enterprises or individuals do when they are not granted a business license?
I. Cases of the refusal of issuance of business licenses
Currently, the refusal of issuance of a Business License may occur in several common cases, including:
- The business registration dossier is incomplete or invalid in accordance with regulations;
- The applicant for business registration fails to satisfy the required conditions (in terms of age, legal status, financial capacity, etc.);
- The registered business lines fall within prohibited business sectors or the statutory business conditions have not been fully satisfied;
- The declared information is inaccurate, untruthful, or the dossier is falsified.
A clear understanding of these cases enables prospective business operators to avoid unnecessary legal risks.
II. Legal provisions on the refusal of issuance of business licenses
1. What should be done when a business license is not granted?
Where a business license is not granted, the applicant should:
- Carefully review the notice of refusal: clearly identify the reasons for refusal stated by the business registration authority;
- Complete or amend the dossier in accordance with the guidance of the competent authority;
- Lodge a complaint or initiate legal proceedings: if the applicant disagrees with the reasons for refusal, he/she/it has the right to file a complaint in accordance with the law on complaints or to initiate a lawsuit before a competent court.
2. Distinction between the refusal of issuance of business licenses and the refusal of reissuance of licensed ones
Similarities: In both cases, the refusal to issue a new business license or to reissue a business license generally stems from the failure to meet statutory requirements regarding dossiers, procedures, or eligibility conditions of the applicant as prescribed by law.
Differences:
- In terms of timing of implementation:
+ Where an enterprise carries out procedures for the issuance of a new business registration certificate for an entity that has never been registered before;
+ Where an enterprise carries out procedures for the reissuance of a business license because the previously issued license has been lost, damaged, or destroyed in another form in accordance with Article 27 of the Law on Enterprise 2020. - In terms of the legal status of the applicant:
+ In cases of non-issuance of a new business license, the applicant has not yet acquired legal entity status (for enterprise types having legal entity status) or has not yet been recognized as a lawful business entity under the law; - + In cases of non-reissuance of a business license, the enterprise has previously been recognized as a legal entity and as a lawful business entity.
III. Certain questions regarding the refusal of issuance of business licenses
1. In which cases has a business license been issued but subsequently revoked?
Pursuant to Clause 1, Article 212 of the Law on Enterprise 2020, an enterprise shall have its Enterprise Registration Certificate revoked in the following cases:
- The information declared in the enterprise registration dossier is falsified;
- The enterprise is established by persons who are prohibited from establishing enterprises pursuant to Clause 2, Article 17 of this Law;
- The enterprise suspends its business operations for one year without notifying the business registration authority and the tax authority;
- The enterprise fails to submit reports as prescribed in Point c, Clause 1, Article 216 of this Law to the business registration authority within six months from the deadline for report submission or upon written request;
- Other cases pursuant to a court decision or at the request of a competent authority in accordance with the law.
Accordingly, where an enterprise falls into any of the above cases, its issued business license shall be revoked.
2. May an enterprise conduct business without a business license?
Pursuant to Clause 2, Article 8 of the Law on Enterprise 2020, enterprises are obliged to:
- Fully and promptly fulfill obligations relating to enterprise registration, registration of changes to enterprise registration contents, disclosure of information on the establishment and operation of enterprises, reporting, and other obligations in accordance with this Law.
Accordingly, enterprises must fully and promptly perform enterprise registration obligations as prescribed. Conducting business without a business license may be deemed a violation and subject to administrative penalties in accordance with law.
3. What are prohibited business lines?
Pursuant to Clause 1, Article 6 of the Law on Investment 2020 (as amended and supplemented by Clause 2, Article 2 of the Law amending the Law on Planning, the Law on Investment, the Law on Investment in the Form of Public-Private Partnership, and the Law on Bidding 2024, effective from 01 July 2025), prohibited investment and business sectors currently include:
- Trading in narcotic substances specified in Appendix I to this Law;
- Trading in chemicals and minerals specified in Appendix II to this Law;
- Trading in specimens of wild flora and fauna of species listed in Appendix I to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), and specimens of endangered, precious, and rare forest plants, forest animals, and aquatic species of Group I originating from natural exploitation as specified in Appendix III to this Law;
- Prostitution business;
- Trafficking in persons, human tissues, corpses, body parts, or human fetuses;
- Business activities relating to human cloning;
- Trading in explosive fireworks;
- Debt collection services;
- Trading in national treasures;
- Export of relics and antiques.
These are sectors in which investment and business activities are prohibited under Vietnamese law in order to protect social order, public health, the environment, and moral values.
4. If a business license application is refused, is it possible to file a complaint or initiate legal proceedings?
Pursuant to Clause 3, Article 33 of Decree No. 01/2021/NĐ-CP: If upon the expiry of the prescribed time limit, the Enterprise Registration Certificate or the Certificate of Change in Enterprise Registration Contents is not issued, or the enterprise registration contents are not updated in the National Enterprise Registration Database, or no notice requesting amendment or supplementation of the enterprise registration dossier is received, the enterprise founder or the enterprise has the right to lodge complaints or denunciations in accordance with the law on complaints and denunciations.
Accordingly, if the applicant disagrees with the decision refusing the issuance of a business license, they have the right to lodge a complaint or denunciation in accordance with the law. In addition, the enterprise may initiate an administrative lawsuit before a competent court in accordance with administrative procedure laws.
5. In which cases is a business license revoked and what are the legal consequences?
Under current regulations, an enterprise shall have its Enterprise Registration Certificate revoked in the cases specified in Clause 1, Article 212 of the Law on Enterprise 2020, such as falsification of enterprise registration information; establishment by persons prohibited from establishing enterprises; suspension of business operations for one year without notification to competent authorities, etc.
Upon revocation of the business license, the enterprise shall be dissolved pursuant to Point d, Clause 1, Article 207 of the Law on Enterprise 2020.
IV. Legal consulting services on the refusal of issuance of business licenses
The above is NPLaw’s article on the non-issuance of business licenses in Vietnam. With a team of experienced lawyers and legal consultants, NPLaw provides reputable and professional legal services, ensuring the best protection of the legitimate rights and interests of our valued clients. Should you require legal assistance, please contact NPLaw for consultation and support.
