Procedures to establish handicrafts company in Vietnam

Recently, the demand for handmade items make the handicraft market a potential investment for businesses. When industrial items are increasingly boring and monotonous, handmade products with skillful, rustic lines, and meticulous techniques are very popular with consumers. Along with the trend of manual production, the establishment of a series of small start-ups also on the rise. So, in this article, LSX legal firm will introduce you: “Procedures to establish handicrafts company in Vietnam”.

Legal grounds

• Law on Enterprise 2020
• Decree 01/2021/ND-CP
• Decree 47/2021/ND-CP

The concept of “Company”

A company means the association of two or more people (individuals or legal entities) by a legal event in which the parties agree to use their assets or abilities to carry out activities to achieve a common goal. Enterprise: a concept that people often use to replace “company”. However, this can be considered a systematic mistake, which is deeply rooted in the thought of each individual, that mentioning the company is referring to an enterprise, people always equate company and business as one.

Clause 10, Article 4 of the Law on Enterprises 2020 defines enterprises as follows:

“Article 4. Definitions

10. “enterprise” means an organization that has a proper name, assets, premises, is established or registered in accordance with law for business purposes.”

From a linguistic point of view, an enterprise legally established as an economic organization with its own name, head office, and operating for profit-making purposes.

On the other hand, Vietnam has 7 main types of enterprises:

• Sole proprietorship
• State-owned enterprise
• Cooperatives
• Joint-stock company (JSC)
• Limited liability company (LLC)
• Partnership
• Joint-venture company

Accordingly, only joint-stock companies and limited liability companies are considered companies, the rest are other types of enterprises.

Therefore, it can be understood that the company is a subset of enterprises, has a part of the basic characteristics of the enterprise, such as:

• The owner’s assets are completely separate from the company;
• The owner has limited liability to the company;
• Ability to transfer shares and contributed capital;
• Centralized and unified management;
• Having legal status.

Handicraft production business

Handcrafted products are designed for practical and decorative use. Therefore, valuable handmade products require both dexterity and patience. Many handmade items use natural materials (mostly indigenous materials). Others crafted from non-traditional materials such as recycled industrial materials (paper art or glass sculpture).

The handicraft production service has sub-sectors with specific industry codes as follows:

• Yarn production: code 1311.
• Manufacture of suitcases, bags, and related products, manufacture of seat cushions: code 1512.
• Manufacture of plywood, veneer, and other thin boards: code 1621.
• Sawing and preserving wood: code 1610.
• Manufacture of construction wood: code 1622.
• Manufacture of wooden packaging: code 1623.
• Finishing of textile products: code 1313.
• Manufacture of other products from wood; Production of products from bamboo, cork, straw, and plaiting materials: code 1629.
• Manufacture of pulp, paper, and paperboard: code 1701.
• Production of wrinkled paper, wrinkled board, packaging from paper and board: code 1702.
• Manufacture of other products from paper and board n.e.c.: code 1709.
• Manufacture of products from plastic: code 2220.
• Production of woven fabrics: code 1312.
• Manufacture of other ceramic products: code 2393.
• Manufacture of other metal products: code 2599.

Is handicraft business a conditional business?

The law stipulates 243 conditional business lines such as producing seals, trading in supporting tools (including repair), trading in equipment, camouflage software used for recording, recording, positioning, trading in military equipment,… To conduct the business of these lines, businesses have to satisfy certain conditions prescribed by the law.

However, handicraft production services do not belong to the group of conditional business lines. From that, the handicraft production service performs like an ordinary service industry. So, since the law does not prescribe specific conditions, nor does it belong to the group of conditional business services, the owner not required to prepare specific papers when carrying out the establishment procedure.

Procedures to establish handicrafts company

Step 1: Prepare documents to register the business

At this step, for each type of company, the requirements for the profile that you need to prepare differs. However, in general, no matter what type of company, you need to prepare the following basic documents for the procedures to establish handicrafts company:

• Firstly, the application form submits to the business registration office requesting the certificate to establish a handicrafts company.
• Secondly, draft of company charter.
• Thirdly, list of founders.
• Fourthly, authenticated legal papers of members.
• Also, valid identification papers of the authorized representative and the legal representative.
• Then, legal capital confirmation document.
• Equally important, certificate of business registration (for organizations).
• Lastly, Investment registration certificate for foreign investors.

Reference to the registering application for types of companies

Firstly, Application for registration of a joint-stock company

1. The enterprise registration application form.

2. The company’s charter.

3. The list of founding shareholders; the list of shareholders that are foreign investors.

4. Copies of:

a) Legal documents of founding shareholders and shareholders that are foreign investors who are individuals and legal representatives;

b) Legal documents of shareholders that are organizations, documents about the designation of authorized representatives; legal documents of authorized representatives of founding shareholders, and shareholders that are foreign organizations.

Legalized copies of legal documents of the members that are foreign organizations.

c) The Certificate of Investment Registration of foreign investors as prescribed by the Law on Investment.

Secondly, Application for registration of a limited liability company

1. The enterprise registration application form.

2. The company’s charter.

3. The list of members.

4. Copies of:

a) Legal documents of members who are individuals and legal representatives;

b) Legal documents of members that are organizations, documents about the designation of authorized representatives, and their legal documents.

Legalized copies of legal documents of the members that are foreign organizations.

c) The Certificate of Investment Registration of foreign investors as prescribed by the Law on Investment.

Thirdly, Application for registration of a partnership

1. The enterprise registration application form.

2. The company’s charter.

3. The list of partners.

4. Copies of legal documents of the partners.

5. Copies of the Certificate of Investment Registration of foreign investors as prescribed by the Law on Investment.

Also, Application for registration of a sole proprietorship

1. The enterprise registration application form.

2. Copies of legal documents of the sole proprietorship’s owner.

Step 2: Submit dossiers

Submit the application at the Business Registration Office of the Department of Planning and Investment at the province level where you plan to locate the head office of your Company.

Currently, there are two forms to submit an application:

• Register directly: apply at the “one-stop” department of the Business Registration Office. However, in Hanoi, this method is no longer applied.
• Online business registration: submit your application on the National Business Registration Portal (Address: https://dangkykinhdoanh.gov.vn). After the online application is valid, you will have to go directly to the “one-stop” department to return the scanned copy (hard copy) when submitting it online. However, this method is relatively complicated, requiring you to have skills and knowledge about registering a business account.

Once you have submitted your application, you will receive a receipt for your application. The usual processing time for applications will be 3 working days.

Step 3: Receive result

According to the schedule on the appointment, you return to the “one-stop” department of the Business Registration Office to receive the results. There are two possible scenarios:

• Dossiers valid: You will receive a Certificate of Business Registration as a result and a notification to the tax authorities.
• In contrast, dossiers invalid: The Business Registration Office will have a document instructing you to amend the dossiers in accordance with the provisions of the law. After the amendments and supplements to your application according to this guide, then resubmit your application as in Step 2.

Step 4: Post-establishment procedures.

Receiving a Business Registration Certificate is just the first step in putting your company into operation. After that, you have to do the following series of procedures:

• Notice the use of the company’s seal sample.
• Bank account notice (if your company registers a bank account).
• Tax procedures such as license declaration and payment of license fees, Tax on corporate headquarters inspection,…
• Trademark protection (if you need it).
• …

After all, your Company can go into operation.

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.

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