Vietnam: What is a business household? Conditions, dossiers and procedures for establishing business households according to Vietnamese regulations?
What is a business household in Vietnam?
According to the provisions of Article 79 of Decree 01/2021/ND-CP on business registration, the following are specified:
Article 79. Household business
1. A household business is 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 shall be the owner of the household business.
2. 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 establishment of household businesses, except for conditional business lines. The provincial People’s Committees shall specify the low revenues applied within their provinces.
Accordingly, an individual or household members who register for establishment and are responsible with all their assets for business activities are called business households.
In case household members register business households, they authorize one member to act as a representative of the business household. Individuals registering business households, who are authorized by household members to act as representatives of business households are business household owners.
Although business households and enterprises are considered economic organizations, carrying out commercial activities, business households are not a type of enterprise.
Vietnam: What is a business household? Conditions, dossiers and procedures for establishing business households according to Vietnamese regulations?
What are the characteristics of business households in Vietnam?
Based on Chapter VIII of Decree 01/2021/ND-CP, business households include the following characteristics:
- Business households do not have legal status like most other types of enterprises;
- Register individual business households as households or individuals, but the members of the business household are All Vietnamese;
- Business households are allowed to do business at multiple locations but must register one location as the head office;
- Business households are not limited to the use of labor
- Business households can hire business operations managers.
- Business households must pay the following taxes: Value Added Tax, Personal Income Tax, License Fee.
- Business households are not allowed to use red invoices (VAT invoices)
What conditions to establish an individual business household in Vietnam?
Pursuant to the provisions of Clause 1, Article 82 of Decree 01/2021/ND-CP specifies as follows:
Article 82. Certificate of household business registration
1. Certificates of household business registration shall be issued to household businesses that are duly established and operating under this Decree. A household business shall be issued with the certificate of household business registration if all of the following conditions are satisfied:
a) The registered business lines are not banned;
b) The name of the household business is conformable with regulations of Article 88 hereof;
c) The application for household business registration is valid;
d) Fees for household business registration are fully paid.
Accordingly, when wanting to establish a business household, it is necessary to meet the following conditions:
- Business registration lines are not prohibited from business investment;
- The name of the business household is set in accordance with Article 88 of Decree 01/2021/ND-CP
- Have a valid business household registration dossier;
- Fully pay the registration fee for business households as prescribed.
What are dossiers and procedures for establishing business households in Vietnam?
According to the provisions of Article 87 of Decree 01/2021/ND-CP stipulating dossiers and procedures for establishing specific business households as follows:
Article 87. Household business registration
1. The household business registration shall be carried out at the business registration authority of district where the household business is headquartered.
2. An application for household business registration includes:
a) The application form for household business registration;
b) Legal documents of the owner of the household business or family household members applying for household business registration;
c) The copy of the minutes of meeting of family household members on establishment of household business in case the household business is established by family household members;
d) The copy of the letter of authorization made by the family household members to authorize a person to act as the owner of the household business in case the household business is established by family household members.
3. When receiving the application, the district-level business registration authority shall give a confirmation slip and issue the certificate of household business registration to the household business within 03 working days from the receipt of the valid application.
If the application is not satisfactory, within 03 working days from the receipt of the application, the district-level business registration authority shall give a written notification to the applicant or the household business founder. Such notification must specify necessary revisions (if any).
4. After 03 working days from the date of submission of the application for household business registration, if neither the certificate of household business registration is issued nor the notification of necessary revisions is given, the household business or its founder is entitled to lodge a complaint or denunciation in accordance with regulations of the Law on complaints and denunciation.
5. In the first week of every month, the district-level business registration authority shall send a list of household businesses registered in the previous month to the tax authority of the same district, the Business Registration Office, and regulatory agencies of the province.
Above is some of the information we provide to you. Best regard!
LawNet
