Does street vendor business have to register business in Vietnam?

Quang Minh September 8, 2022

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Posts : Does street vendor business have to register business in Vietnam? In the section LSX Lawfirm

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Shark Tank Vietnam season 5 – episode 8 begins with Má Hải Bread as the first Startup coming to the program. Founded by Ho Duc Hai and co-founder Doan Van Minh Nhat, the business came to call for the capital of 5 billion VND in exchange for 10% of the company. In the end, the startup decided to agree to an offer of 5 billion for 36% with the companionship of 3 sharks. This startup conducts its business by selling bread with a 4-wheels trolley (similar to a food truck). Does this type of business have to carry out registration procedures? In this article, LSX legal firm would like to answer the question: “Does street vendor business have to register business in Vietnam?”

Legal grounds

Decree 39/2007/ND-CP
Decree 01/2021/ND-CP
Law on Food Safety 2010

Does street vendor business such as Má Hải Bread have to register business in Vietnam?

Decree 39/2007/ND-CP stipulates the subjects do not have to register business and Decree 01/2021/ND-CP provides for subjects that do not have to register business household as follows:

Article 3. Decree 39/2007/ND/CP

Individuals doing trade means individuals who every day themselves conduct one, several, or all activities allowed by law on goods purchase and sale, service provision, and other activities with the purpose of profitability but do not register their business as prescribed by law on business registration and not be called as “trader” as prescribed by the Commercial Law. Particularly including individuals doing the following trade activities:
a) Street trading (trading in public places) means activities of purchase and sale without a fixed location (purchase on street, sale on street, or both purchase and sale on street), including even the receipt of books, news, magazines, cultural products of traders allowed doing business in these products as prescribed by law, for sale on street;
b) Petty trading means the purchase and sale of small and odd items with or without a fixed location;
c) Petty-food trading means the sale of fruits, cakes, candies, and drinks (beverage) with or without a fixed location;
d) Consignment trading means the purchase of goods from other places according to each consignment to sell for wholesalers or retailers;
dd) Providing services: Polishing shoes, selling lottery tickets, repairing keys, repairing vehicles, safekeeping for vehicles, washing for vehicles, barber, painting, taking a photo, and other services with or without fixed locations;
e) Other commercial activities done independently and regularly do not have to register for business.

Article 79. Decree 01/2021/ND-CP

A household business is established by an individual or family household members that shall take responsibility for the 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 shall be the owner of the household business.
Households engaged in agriculture, forestry, aquaculture, salt production, street vendors, nomadic or seasonal businesspeople, and service providers earning low revenues are not required 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.

Conditions to operate business when exempted from business registration

If individuals fall into the above cases, they do not have to conduct business registration activities, however, they still have to ensure the conditions prescribed by law such as security, order, food safety, maintaining environmental sanitation, or complying with the planning of each locality, ensuring urban order when conducting business activities at a certain location.

Does street vendor business have to apply for certificate of hygiene and food safety?

Due to the business form being exempted from registering a business, this business form is not qualified to carry out state procedures related to food safety.

However, when looking at it objectively, food safety contains 2 forms:

Guarantee input quality. In case having risk, owners have to take responsibility (full or jointly).
To apply for a hygiene and food safety certificate, businesses have to ensure adequate facilities such as restaurants; make sure food has its own input and output; have machines, sanitation, business models; employees trained in food hygiene and safety, etc.

The Law on Food Safety 2010 regulates that:

Materials for processing street food must meet food safety requirements and have a clear source and origin.
Eating utensils and food containers must be hygienically safe.
Packages and materials in direct contact with food must neither contaminate nor release contaminants into food.
To have devices to prevent sunshine, rain, dust, insects, and harmful animals.
To sufficiently have technically qualified water for foo d processing and trading.
To comply with regulations on health, knowledge, and practices of persons directly engaged in food production and trading.

So, the business of street vendors does not have to apply for a certificate of food hygiene and safety. However, it has to ensure the input quality. In other words, guarantee the food for sale.

Does street vendor business have to pay for personal income tax (PIT)?

Under Article 1 of Circular 92/2015/TT-BTC, the policy on payment of value-added tax and personal income tax of residents with business activities:

“Article 1. Taxpayers

1. Taxpayers mentioned in Chapter I of this Circular are residents including individuals, groups of individuals, and households who manufacture and/or trade in goods, and services in any field and sector prescribed by law (hereinafter referred to as businessperson or businesspeople). The business fields and sectors also include:

a) Independent practice in the fields and sectors that are permitted in the practicing certificate or license as prescribed by law.

b) Acting as a lottery, insurance, multi-level marketing agent who directly signs a contract with the lottery company, insurer, or multi-level marketing company.

c) Business cooperation with other organizations.

d) Agriculture, forestry, salt production, and aquaculture activities that do not satisfy conditions for tax exemption in Point e Clause 1 Article 3 of Circular No. 111/2013/TT-BTC dated August 15, 2013, of the Ministry of Finance.

2. Taxpayers mentioned in Clause 1 of this Article do not include businesspeople whose revenues are VND 100 million/year or lower.”

Taxes that individuals and households conduct production and business activities include license tax, value-added tax (VAT), and personal income tax (PIT). However, Clause 2, Article 1 of Circular 92/2015/TT-BTC regulates cases where VAT and PIT are not required to have a turnover of less than VND 100 million/year. So, when having annual revenue of over 100 million VND, subjects have to pay PIT. In contrast, if having annual revenue of less than 100 million VND, they do not have to pay PIT.

Street vendor business selling bread has an average revenue per vendor of nearly 100 million VND per year. Therefore, if they have annual revenue of less than 100 million VND, they do not have to pay for PIT.

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;
Represent to submit documents, receive results, and hand them over to customers.

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.

Contact LSX

Finally, hope this article is useful for you to answer the question about “Does street vendor business have to register business in Vietnam?”. If you need any further information, please contact LSX Law firm: +84846175333 or Email: [email protected]

Does an online business need a business registration?

The business on social network is also one of the business activities, so the shop owners and fanpage owners when receiving the notice of the tax department will have to choose the form of business registration and register to comply with the law.

Notices when doing street vendor business?

To avoid sanctions, food truck businesses need to:
– Ensure food hygiene and safety, clear food origin;
– Ensure the hygiene of the surrounding environment;
– Do not do business in prohibited places, ensure traffic corridor safety.

Prohibited acts when doing street vendor business?

According to article 7 of Decree 39/2007/ND-CP, when conducting the movable business, individuals doing trade must put, arrange means of movement, equipment, instruments serving the sale of goods, and goods to be clean and order; must have suitable instruments to contain garbage, waste. Strictly prohibit individuals doing trade performing the following acts in the movable business operation:
a) Following up, begging, enticing, scrambling, annoying, bothering customers, and having words, gestures rudely or impolitely in respect to customers;
b) Gathering in large numbers or using loudspeakers, gongs, drums, whistles, bugles and other instruments to increase sound volume to call, propagate, and advertise for the movable business operation but not commit with the local authorities where conducting these activities about use properly with purpose and ensure order and social security;
c) Announcing the sale of goods, movable services on street causing noise in public places and influencing the common quiet in duration from 22 o’clock to 5 o’clock of the morning of next day;
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