Insurance is a very important field, one of the effective capital mobilization channels for the economy. So what are the specific conditions for establishing an insurance business? Today, LSX Lawfirm will give you an article about: “Conditions for establishing an insurance business in Vietnam”, as follows:
Legal grounds
- Consolidated document No. 06/VBHN-BTC in 2019 – Law on insurance business.
- Consolidated document No. 12/VBHN-BTC in 2020 – Decree guiding the Law on insurance business.
- Circular 47/2019/TT-BTC.
Legal provisions on conditions for establishing an insurance business
What is an insurance company?
Pursuant to Clauses 1 and 3, Article 3 of the Consolidated Document No. 06 of the Law on Insurance Business 2019, an insurance company is understood as follows:
“The insurance business is an activity of an insurance enterprise for for-profit purposes, whereby the insurance enterprise accepts the risk of the insured, on the basis that the insurance buyer pays the insurance premium to pay the insurance premium. The insurance enterprise pays the insurance money to the beneficiary or indemnifies the insured upon the occurrence of the insured event.”
Accordingly, it can be understood that an insurance company is a company established, organized, and operated in accordance with the Law on Insurance Business and other relevant Laws.
Conditions for establishing an insurance business
Owner’s Conditions
Pursuant to Article 17 of the Enterprise Law 2020, every individual or organization has the right to establish and manage an enterprise in Vietnam as long as it does not fall into the cases specified in Clause 2, Article 17 of this Law, specifically as follows:
- State agencies and units of the people’s armed forces use state assets to establish profit-making enterprises for their own agencies or units;
- Cadres, civil servants and public employees according to the provisions of the Law on Cadres and Public Officials and the Law on Public Employees;
- Officers, non-commissioned officers, professional soldiers, defense workers and officers in agencies and units of the Vietnam People’s Army; officers, professional non-commissioned officers, public security workers in agencies and units of the Vietnam People’s Public Security, except those who are appointed as authorized representatives to manage the State’s capital contribution in enterprises. or management at a state-owned enterprise;
- Professional leaders and managers in state-owned enterprises as prescribed at Point a, Clause 1, Article 88 of this Law, except those appointed as authorized representatives to manage the State’s contributed capital in the enterprise. other;
- Minors; people with limited civil act capacity; persons who have lost their civil act capacity; people with difficulties in cognition and behavior control; organizations without legal status;
- Persons being examined for penal liability, held in custody, are serving prison sentences, are serving administrative handling measures at compulsory detoxification establishments, compulsory education establishments or are banned by the Court hold certain posts, are prohibited from practicing certain professions or doing certain jobs; other cases as prescribed by the Law on Bankruptcy and the Law on Anti-corruption;
In addition
At the request of the Business Registration Authority, the person registering the establishment of an enterprise must submit a criminal record card to the business registration authority: Organizations that are commercial legal entities are prohibited from doing business or operating in certain fields according to the provisions of the Penal Code.
So to establish an insurance company, an organization or individual participating in an enterprise must have full civil act capacity. For an organization, it must be a legal entity. Individuals shall not declared incapacitated by the court or have limited civil act capacity.
At the same time, individuals and organizations that want to participate in the establishment of an insurance company need to fully satisfy the conditions for capital contribution according to Article 6 of the Consolidated Document No. 12 of the Decree guiding the Law on Insurance Business 2020.
Conditions for occupation when registering
Pursuant to Article 7 of the Enterprise Law 2020, enterprises are allowed to freely conduct business in industries that are not prohibited by law and in accordance with the provisions of the law.
At the same time, the insurance business is a conditional industry, so when opening an insurance business, it is necessary to pay attention to the conditions to be able to do insurance business.
Accordingly, based on Article 60 of the consolidated document No. 06 of the Law on Insurance Business in 2019, insurance business enterprises will operate with the following contents:
- Insurance business, reinsurance business;
- Preventing and limiting risks and losses;
- Expertise the damage;
- Loss assessment agency, considering compensation settlement, requesting a third party to reimburse;
- Fund management and capital investment;
- Other activities as prescribed by law.
And an insurance enterprise is not allowed to conduct life insurance business and non-life insurance business at the same time, except for the case where a life insurance enterprise provides supplementary health insurance and personal accident insurance business. life insurance.
So to do insurance business, enterprises must comply with the provisions of the Law on Insurance Business. And must apply for a license to establish and operate insurance.
Conditions on company name
When naming a company or enterprise, based on Article 37, Article 38 of the Enterprise Law 2020, you should note the following:
- The Vietnamese name of an enterprise consists of two components in the following order:
- Type of business;
- Private name.
- Enterprise form write as “limited liability company” or “limited liability company” for limited liability companies; written as “joint stock company” or “CP company” in the case of a joint stock company; written as “company list” or “HD company” for company listing; and written as “private enterprise”, “private enterprise” or “private enterprise” for private enterprises.
- Proper names write with the letters of the Vietnamese alphabet, the letters F, J, Z, W, numbers and symbols.
- The enterprise name must affix at the head office, branches, representative offices and business locations of the enterprise. The business name must print or written on the transaction papers, documents and publications issued by the business.
- Do not use the same or confusing name as the registered business name.
- And do not use the names of state agencies, units of the people’s armed forces, names of political organizations, socio-political organizations, socio-political-professional organizations, social organizations, and political organizations. social – profession to do all or part of the proper name of the business, unless approved by that agency, unit or organization.
- Do not use words and signs that violate the historical, cultural, ethical and fine traditions of the nation.
Head office conditions
Pursuant to Article 42 of the Law on Enterprises 2020, the head office of an insurance company must be located in the Vietnamese territory, be the contact address of the enterprise, and be determined according to the geographical boundaries of the administrative unit; have a phone number, fax number and email (if any).
At the same time, the head office of the enterprise is also related to the agency that will directly manage the tax of that enterprise. Where an enterprise is located, the tax authority there will directly manage that business.
Capital conditions
The insurance company business is a conditional business, so opening an insurance company requires the enterprise to have sufficient legal capital as prescribed by law. However, each type of enterprise will have different capital levels based on Article 10 of the consolidated document No. 12 of the Law on Insurance Business in 2020, specifically as follows:
For non-life insurance:
- Firstly, non-life insurance and health insurance business: 300 billion VND;
- Secondly, business of non-life insurance and aviation insurance or satellite insurance: VND 350 billion;
- Thirdly, non-life insurance, aviation insurance and satellite insurance: 400 billion VND.
For life insurance:
- Firstly, life insurance business (except unit-linked insurance, retirement insurance) and health insurance: 600 billion VND;
- Secondly, life insurance and unit-linked insurance or retirement insurance: 800 billion Vietnam dong;
- Thirdly, life insurance, unit-linked insurance and retirement insurance: 1,000 billion VND.
For health insurance enterprises: 300 billion VND.
For foreign branches:
- Firstly, non-life insurance and health insurance business: 200 billion VND;
- Secondly, business of non-life insurance and aviation insurance or satellite insurance: VND 250 billion;
- Thirdly, non-life insurance, aviation insurance and satellite insurance: VND 300 billion.
For reinsurance businesses:
- Non-life reinsurance business or both non-life reinsurance and health reinsurance: VND 400 billion;
- Life reinsurance business or both life reinsurance and health reinsurance: 700 billion VND;
- Trading in all 3 types of life reinsurance, non-life reinsurance and health reinsurance: VND 1,100 billion
For insurance brokerage businesses:
- Original insurance brokerage or reinsurance brokerage business: VND 4 billion;
- Original insurance brokerage and reinsurance brokerage business: VND 8 billion.
Thus, depending on the type of business and different insurance business lines, there will be different levels of legal capital.
Conditions of seal
The seal of the enterprise represents the will of the enterprise. And the seals of businesses will not be the same, each business will have a separate type of mark to distinguish it from each other.
Accordingly, enterprises choose for themselves the form and content of their seals in accordance with the provisions of law.
The seal engraving of the enterprise will be done at the seal engraving agency after the business receives the business registration certificate.
After having the seal, the enterprise shall notify and manage it according to the charter or regulations of the company or its enterprise.
Related article
Does the company have to pay health insurance for foreign workers?
Procedures for buying compulsory health insurance for foreigners
Subjects required to participate in unemployment insurance
Related questions
Social insurance includes 02 types, namely:
• Compulsory social insurance is a type of social insurance organized by the State that employees and employers must participate in.
• Voluntary social insurance is a type of social insurance organization organized by the State in which participants can choose a payment rate and payment method suitable to their income and the State has the policy to support social insurance contributions for participants to enjoy benefits. retirement and death rates
To establish an insurance business, you must pay the following fees and charges:
Firstly, business registration fee: Pursuant to Circular 47/2019/TT-BTC, the first-time business registration fee is 50,000 VND/time. However, if you register online, you will be exempted from the business registration fee.
Secondly, the fee for publishing business registration information: the fee collected in this case is 100,000 VND/time, also based on Circular 47/2019/TT-BTC. In addition, there will be other related costs such as the cost of buying digital signatures, creating a seal, etc,…
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