The household business has become a simple and popular business model in Vietnam. More and more subjects choose this business model to conduct production and business activities due to its convenience of operation. However, to conduct this type of business, you have to apply for a certificate of business household registration. So, in this article, LSX legal firm will provide you with a guideline: “Where to register for a business household in Vietnam?”
Legal ground
- Decree 01/2021/ND-CP
Business Household
Under the Vietnamese legislation, the household business means a type of business established by an individual or family household members that shall take responsibility for business operations of the household business with all of their property. If a household business is established by members of a family household, one of them shall be authorized to act as the representative of the household business. The individual applying for registration of household business or the person authorized by the family household members to act as the representative of the household business presents as the owner of the household business.
The law does not require households engaged in agriculture, forestry, aquaculture, salt production, street vendors, nomadic or seasonal businesspeople, and service providers earning low revenues to apply for the establishment of household businesses, except for conditional business lines. The provincial People’s Committees shall specify the low revenues applied within their provinces.
Pros and Cons of a business household
Advantages
- Firstly, simple and easy establishment procedure.
- Secondly, no monthly tax returns.
- Thirdly, simple accounting mode.
- Fourthly, convenient scale, suitable for individuals and small businesses.
- Lastly, applied to flat tax regime.
Disadvantages
- Firstly, only 9 employees are allowed. If an individual business household regularly employs 10 or more employees but does not establish a business and still maintains the household business model, it will be fined up to 5,000,000 VND and forced to establish a company.
- Secondly, business registration only at one location and not open more branches or business locations at another address.
- Thirdly, no legal status, no seal of legal entity.
- Fourthly, take responsibility for the entire property of the owner of the individual business household for business activities.
- Besides, business households are not allowed to declare and calculate VAT according to the credit method, so they cannot be refunded, and cannot issue Value Added Invoices (VAT invoices).
- Also, the nature of small business operations may lead to a loss of trust for customers in the first cooperation.
Where to register for a business household in Vietnam?
According to Article 79 of Decree 01/2021/ND-CP, Vietnamese citizens from full 18 years old with full civil act capacity have the right to establish individual business households.
The business location of a business household means the place where the business household conducts business activities. A business household may conduct business at many locations but must choose one location to register its headquarters and notify the tax administration agency or market management agency where it conducts its operations.
Under Article 14 of Decree 01/2021/ND-CP, business registration agencies are prescribed as follows:
“1. Each of the provinces and central-affiliated cities (hereinafter referred to as “provincial level”) and urban/suburban districts, district-level towns and provincial cities (hereinafter referred to as “district level”) shall have a business registration authority. To be specific:
a) The provincial-level business registration authority is the Business Registration Office which is affiliated with the provincial Department of Planning and Investment (hereinafter referred to as “Business Registration Office”).
Each Business Registration Office may open branches within the province to receive applications and return results;
b) The district-level business registration authority is the Finance – Planning Department affiliated to the district-level People’s Committee (hereinafter referred to as “district-level business registration authority”).”
Currently, you do not have to carry out the business registration procedures directly to the Finance and Planning Department, but through the Public Administration Department (One-Stop Department) of the District People’s Committee.
The dossier will be transferred from the Public Administration Department to the Finance – Planning Department for settlement.
Procedures for registration of business households in Vietnam
Step 1: Prepare dossiers for individual business household registration
- Firstly, the name, address, phone number, fax number, and email address (if any) of the business household.
- Secondly, business lines.
- Thirdly, the capital.
- Fourthly, the number of employees.
- Full names, signatures, residences, numbers, and dates of issue of unexpired ID cards or passports of individuals establishing the business household in case the business household established by a group of individuals.
- Full name, signature, residence, number, and date of issue of unexpired ID card or passport or of the individual in case the business household established by an individual.
- Full names, signatures, residences, numbers, and dates of issue of unexpired ID cards or passports of individuals or representatives of the household in case the business household established by a household.
- Lastly, the application form must be enclosed with legitimate copies of the unexpired ID cards or passports of individuals in the business household or representative of the household, and a legitimate copy of the minutes of the meeting of the group of individuals on the establishment of the business household (in case the business household is established by a group of individuals).
Step 2: Submit your application
The person who registers the establishment of a business household shall submit a dossier to the Finance – Planning Department of the People’s Committee of the district where he/she intends to locate the business household.
In addition to the form of direct submission as above, citizens can carry out the procedures for registering individual business households online at the public service website of the Department of Planning and Investment of the province/city.
Step 3: Get the result
When receiving the application, the business registration authority of the district shall give a receipt to the applicant and issue the certificate of business household registration within 03 working days from the receipt of the application if the application satisfies the conditions to register a business household.
In contrast, within 03 working days from the receipt of the application, the business registration authority of the district shall inform the applicant of necessary revisions or supplementation if the application does not satisfy the conditions.
Legal service of LSX Legal Firm
LSX legal firm provides legal services to clients in various legal areas. To make your case convenient, LSX will perform:
- Legal advice related to new regulations;
- Representing in drafting and editing documents;
- We commit the papers to be valid, and legal for use in all cases;
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With a team of experienced, reputable, and professional consultants; The firm is always ready to support and work with clients to solve legal difficulties.
Furthermore, using our service, you do not need to do the paperwork yourself; We guarantee to help you prepare documents effectively and legally.
Also, you will not have to waste time preparing the application, submitting application, or receiving results. At those stages, we will help you do it smoothly.
After all, LSX provides the service with the desire that customers can experience it the best way. Additionally, we guarantee the cost to be the most suitable and economical for customers.
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Related questions
When a business household shuts down its operation, it must send a notification and return the original certificate of business household registration to the business registration authority of the district where the business household was registered, settle all outstanding debts, including tax debts, and financial obligations.
The business location of a household business means the place where specific business operations carried out.
A household business may carry out business operations at multiple locations but must select a location as its headquarters and notify it to tax authorities and market surveillance authorities at places of other business locations.
Firstly, individual business households do not have legal status and separate seals. However, if desired, the householder can still engrave his own seal with the name of the business household, the business household’s address, and the tax identification number.
Secondly, household businesses usually do business on a small scale.
Thirdly, individuals, groups of people, or members of a household have unlimited liability for business operations. If the business assets are not enough to pay the debt; then the business household must take the assets not invested in the business household to repay at the time to pay due debts to creditors. In case a group of people own a household, all members take unlimited liability for all debts of the business household.
Fourthly, for a business household owned by an individual, the owner has the right to decide all business activities. For household businesses owned by group members or household members, they shall appoint a representative to engage in external transactions.
Contact LSX
Finally, hope this article is useful for you to answer the question about “Where to register for a business household in Vietnam?”. If you need any further information, please contact LSX Law firm: +84846175333 or Email: [email protected]
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