After graduating from school, students from military schools will become officers and work in units of the state. So, in addition to receiving salary from the state, can officers open their own companies to do business to earn extra income? To have an insight into this problem, follow LSX legal firm’s article: “Can Officers establish company in Vietnam?”
Legal grounds
- Law on cadres and civil servants 2008
- Law on Public Employees 2010
- Also, Law on Enterprise 2020
Who are Officers?
Officers of the Vietnam People’s Army are defined as cadres of the Communist Party of Vietnam and the State of the Socialist Republic of Vietnam. They work in the military field.
After training at military schools, soldiers who graduate from school will become Officers. Then, they work in units of the people’s armed forces, troops, … as assigned by superiors.
Officers can not establish and manage businesses
The Law on Enterprise 2020 allows all citizens to establish businesses, except for some special subjects. The subjects banned from setting up businesses are usually people working in state agencies. Such provisions of the law intended to prevent these subjects from turning their business into specific abuses of power and corruption. Because these subjects work in managerial positions and have power in certain fields. Because these subjects work in managerial positions and have legal power in certain fields.
Officers, on the other hand, belong to the prohibited subjects from establishing and managing enterprises as specified in Clause 2, Article 17 of the Law on Enterprises as follows:
“2. The following organizations and individuals do not have the right to establish and manage enterprises in Vietnam:
c) Commissioned officers, non-commissioned officers, career military personnel, military workers, and public employees in agencies and units of the Vietnam People’s Army; commissioned officers, non-commissioned officers, and police workers in police authorities and units, except for those designated and authorized representatives to manage state-owned stakes in enterprises or to manage state-owned enterprises”
Under the above regulations, if you are an Officer, you are not allowed to register to establish a business.
Additionally, other subjects prohibited or restricted from establishing businesses:
- Officials
- Public employees.
- …
Officers can buy shares and contribute capital
Although not allowed to establish or manage enterprises, officers have the right to contribute capital, buy shares, and buy capital contributions to joint-stock companies, limited liability companies, and partnerships as specified in Clause 3, Article 15 of the Law on Enterprises 2020:
“3. Organizations and individuals have the right to contribute capital, buy shares and stakes of joint-stock companies, limited liability companies, and partnerships in accordance with this Law, except:
a) State authorities, People’s armed forces contributing state-owned assets to enterprises to serve their own interests;
b) The entities that are not allowed to contribute capital to enterprises prescribed by the Law on Officials, the Law on Public Employees, and Anti-corruption Law.”
However, Officers must follow the principle of “not participate as a manager when contributing capital” as prescribed in Article 37 of the Law on Anti-Corruption 2005:
“1. Public servants must not do the following things:
…
b) Setting up, participating in the setting up of, or participating in the management and administration of, private enterprises, limited liability companies, joint-stock companies, partnership companies, cooperatives, private hospitals, private schools, and/or private scientific research establishments, except otherwise provided for by law;
…
6. The provisions of Clauses 1,2,3 and 4 of this Article shall also apply to the following subjects:
a) Officers, professional army men, defense workers in agencies or units of the People’s Army;
b) Officers, non-commissioned officers, professional-technical officers, and non-commissioned officers in agencies or units of the People’s Police.”
The officer’s participation in the capital contribution is also limited to each type of enterprise.
- For joint-stock companies, officers can only participate as capital contributors-shareholders.
- For partnerships, Officers can only participate as general partners.
- Officers must not contribute capital to limited companies because shareholders of LLCs have the right to manage the company.
In Practice
In fact, many officers still establish their own company. The reason for this situation is that there is no portal to look up information for business owners who are officers or not. Therefore, many companies “of” officers established in the market.
As long as the law not strictly regulated about this, the cases where officers establish their company will still taking place.
LSX legal firm’s service on company establishment
When establishing a company, people must carry out the procedure following the law at the competent business registration authority (under the Law on Enterprise 2020). The process of establishing a business includes many different steps and phases. If you are not familiar with the law, this process may take a lot of time.
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.
Related article
Can public employees set up company under Vietnamese Law on Enterprise?
Can family members establish Joint-stock company in Vietnam?
Procedures to establish partnership in Vietnam
Related questions
The establishment of a member fund must satisfy the following conditions:
– The minimum contributed capital: VND 50 billion.
– Has 02 – 99 capital contributors who are all professional investors.
– Managed by 01 securities investment fund management company.
– Assets of member funds are deposited at a depository bank that is independent to the securities investment fund management company.
To establish a company, the business has to prepare a valid set of documents:
Firstly, the Business registration application form.
Secondly, the Company charter
Thirdly, List of founding members/shareholders (According to the form issued by the Ministry of Planning and Investment).
Lastly, the business owner’s identity papers.
Contact LSX
Finally, hope this article is useful for you to answer the question about “Can Officers establish company in Vietnam?”. If you need any further information, please contact LSX Law firm: +84846175333 or Email: [email protected]
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