A.

General knowledge on business and business entities

I. Overview of business and types of business entities in Vietnam

II. Establish and contribute capital to an enterprise according to the Enterprise

Law 2020

III. Rights and obligations of enterprises

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
I. Overview of business and types of business entities in Vietnam
1. Brief historical development of laws regulating forms of business organizations
in Vietnam

2. Definition of Business

3. Defitnition of Business Entity

4. Definition and characteristics of enterprises

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
I. Overview of business and types of business entities in Vietnam
1. Brief historical development of laws regulating forms of business organizations
in Vietnam
Before 1986
• Colonial-era France introduced laws on business organization models in Vietnam.
• Under French rule, the Civil Code (1931) and Central Commercial Code (1942) established
regulations similar to modern company law.
• In 1972, the Republic of Vietnam enacted the Commercial Code, featuring various business
organization models.
• Post-1975, the Vietnamese state did not recognize business freedom or a market economy, focusing
on state-owned enterprises and cooperatives until economic reforms in 1986.

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
I. Overview of business and types of business entities in Vietnam
1. Brief historical development of laws regulating forms of business organizations
in Vietnam (cont’d)
After 1986
• Vietnam's economic law transformed post-1986 reforms, marked by key milestones like the Law on
Foreign Investment (1987) and Company Law 1990, recognizing the private capitalist economy.
• Subsequent laws addressed state-owned enterprises and cooperatives, like the Law on State-owned
Enterprises (1995) and Law on Cooperatives (1996). The Enterprise Law 1999 replaced prior laws
but revealed sector-specific limitations.
• To adapt to a multi-sector commodity economy, the transformative Enterprise Law 2005 was
enacted, considered a legal reform "revolution." Laws in 2014 and 2020 further enhanced the
business and investment environment.

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
I. Overview of business and types of business entities in Vietnam
2. Definition of Business
• According to Clause 21, Article 4 of the Law on Enterprises 2020, "business”
means continuous execution of one, some or all stages including investment,
manufacturing, sale or provision of services on the market for profit".
• According to this definition, lawmakers view business activities as professional endeavors marked
by "continuous execution" in investment or market activities, associated with entities like
companies and private enterprises. However, the definition in the Enterprise Laws lacks clarity and
consistent interpretation.

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
I. Overview of business and types of business entities in Vietnam
3. Defitnition of Business Entity
The current law lacks a specific definition of "business entity."

• In a broad sense, business entities encompass organizations and individuals engaging in actions for
profit-seeking purposes, including those with or without formal registration.

• In a narrower sense, business entities specifically entail organizations and individuals engaged in
professional business activities, legally formed, and having completed market entry procedures.

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
I. Overview of business and types of business entities in Vietnam
3. Defitnition of Business Entity (cont’d)
When starting a business, investors must consider factors like investment capital, industry, business
items, area, and legal form. Selecting the legal form is crucial, shaping the business's identity for
recognition by state agencies and partners, and determining its legal status, rights, and obligations.
For example, Mr. A, as an investor, can choose between a private enterprise, or a one-member limited
liability company, each with distinct consequences.
• In a one-member limited liability company, the owner's responsibility is limited to the invested
capital, and the company is recognized as a legal entity independent of its owner.
• Conversely, opting for a private enterprise or a business household means Mr. A has unlimited
liability for the entity's debts, personally responsible for all obligations in case of insolvency or
bankruptcy.

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
I. Overview of business and types of business entities in Vietnam
3. Defitnition of Business Entity (cont’d)
The types of business entities in Vietnam, granted registration certificates (or
another document of equivalent value) by competent state agencies, can
generally be categorized into two large groups.

• Enterprises; and
• Business Households.

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
I. Overview of business and types of business entities in Vietnam
3. Defitnition of Business Entity (cont’d)
3.1 Enterprises

Enterprises in Vietnam vary in scale and ownership form. The Enterprise Law 2020 is the primary
regulation governing the establishment, organization, management, and operation of businesses such
as limited liability companies, joint-stock companies, partnerships, and private enterprises.

Specialized laws also apply to certain fields like securities, insurance, lawyers, notaries, and credit
institutions. However, all economic organizations under these laws operate under a common legal
form specified by the Enterprise Law 2020.

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
I. Overview of business and types of business entities in Vietnam
3. Defitnition of Business Entity (cont’d)
3.2 Business Households (we will not look into these types in our subject / READ AT YOUR LEISURE)
This group, also called individual business households or small traders, is smaller in scale than
enterprises but significantly contributes to socio-economic development. Despite suggestions to
include them in the Law on Enterprises, business households are distinct entities and are currently
regulated by Decree No. 01/2021/ND-CP.
Other Economic Organizations:
Apart from enterprises and business households, Vietnam's economy includes cooperatives and
cooperative unions. Operating under the Cooperative Law (currently 2012, but the new one in 2023
will take effect from July 1, 2024) for about 50 years, these entities are considered "collective
economic organizations, co-owned, with legal status." While resembling businesses, cooperatives are
not classified as such under current regulations.
CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
I. Overview of business and types of business entities in Vietnam
4. Definition and characteristics of enterprises

4.1 Definition

4.2 Characteristics

4.3 Classification

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
I. Overview of business and types of business entities in Vietnam
4. Definition and characteristics of enterprises

4.1 Definition

According to Article 4 of the Law on Enterprises 2020, "enterprise" is "an

organization with its own name, assets, transaction office, established or
registered for establishment in accordance with the law for business purposes".

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
I. Overview of business and types of business entities in Vietnam
4. Definition and characteristics of enterprises
4.2 Characteristics

• Having its own name (Arts 37-41)

• Having assets (Arts 34-36)
• Having head office (Arts 42)
• Being registered in accordance with law (Arts 26-30)
• With the purpose of doing business
CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
I. Overview of business and types of business entities in Vietnam
4. Definition and characteristics of enterprises
4.2 Characteristics (cont’d)

Having its own name: the name of a business is a crucial identifier, signifying its independent status in
the market. It serves as a basis for state management, helping distinguish businesses and facilitating
relationships with consumers. Stringent regulations exist in current law to ensure unique and clear
business names, preventing duplication and misunderstandings with partners and consumers.

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
I. Overview of business and types of business entities in Vietnam
4. Definition and characteristics of enterprises
4.2 Characteristics (cont’d)

Having assets: the purpose of an Enterprise is to carry out business activities with the characteristic of
investing in assets to gain assets. Therefore, the prerequisite is to have a certain level of assets; Assets
are both a condition for the existence of an enterprise and the purpose of that enterprise's operations.

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
I. Overview of business and types of business entities in Vietnam

Refer to these articles and answer the following question about assets in enterprises:

• Property comprises objects, money, valuable papers and property rights. Property includes
immovable property and movable property. Immovable property and movable property may be
existing property or off-plan property. (Article 105 Civil Law 2015)

• Assets contributed as capital may be in the form of VND, freely convertible foreign currency, gold,
land use rights, intellectual property rights, technology, technical know-how and other assets that
be valued in VND (Article 34.1 Law on Enterprise 2020)

• Is “cryptocurrency” considered a type of “asset” in Vietnam and is it a type of “contributed

asset” in an enterprise?
CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
I. Overview of business and types of business entities in Vietnam
4. Definition and characteristics of enterprises
4.2 Characteristics (cont’d)

Have a transaction office (a place for communication and transactions of the Enterprise with its
products and partners): when establishing an Enterprise, the law stipulates that investors must
register at least 1 address within the territory of Vietnam. When an Enterprise is established under
Vietnamese Law and is headquartered in Vietnam, it is a Vietnamese Enterprise (regardless of the
owner's nationality) - this is the basis for determining Vietnamese nationality for Enterprises.

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
I. Overview of business and types of business entities in Vietnam
4. Definition and characteristics of enterprises
4.2 Characteristics (cont’d)

Enterprises are registered for establishment according to laws: the act of registering establishment is
an obligation that the Enterprise must perform to create a legal basis for State agencies to manage
existing enterprises. Enterprise registration also creates rights for the Enterprise. From the moment
the Enterprise registration certificate is issued, the Enterprise will have full rights of an Enterprise.

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
I. Overview of business and types of business entities in Vietnam
4. Definition and characteristics of enterprises
4.2 Characteristics (cont’d)

Enterprises are established for business purposes: The business purpose of an enterprise is a very
important sign to distinguish a business from non-business organizations. Every organization has a
certain operating purpose. The purpose of business operations is to seek profit. From a practical
perspective, the main goal of all investors when establishing a private enterprise or company is to seek
profits. Business purpose is an inseparable attribute of the enterprise.

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
I. Overview of business and types of business entities in Vietnam
4. Definition and characteristics of enterprises
4.3 Classification

According to the legal form of the enterprise

Based on current legislation, the legal forms of businesses in Vietnam include:
+ LLC (including one-member LLCs and LLCs with two or more members);
+ Joint stock company;
+ Partnership; and
+ Sole Proprietorship.

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
I. Overview of business and types of business entities in Vietnam
4. Definition and characteristics of enterprises
4.3 Classification (cont’d)

Other classification methods:

According to business scale: large businesses and small and medium enterprises (SMEs)
According to the main purpose of operation: businesses with the main purpose is seeking profit or
businesses with the main purpose is for community.
According to the legal status: with and without legal status

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
II. Establish and contribute capital to an enterprise according to the Enterprise
Law 2020
1. Right to establish and manage private enterprises and companies

2. Contribute capital to the enterprise according to the Enterprise Law 2020

3. Investment and business sectors and professions

4. Procedures for establishing and registering a business according to the

Enterprise Law

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
II. Establish and contribute capital to an enterprise according to the Enterprise
Law 2020
1. Right to establish and manage private enterprises and companies

In essential, Vietnamese and foreign organizations and individuals have the right
to establish and manage businesses in Vietnam, unless prohibited by law. The law
outlines specific entities prohibited from engaging in these activities under Article
17 Law on Enterprise 2020. These are:

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
II. Establish and contribute capital to an enterprise according to the Enterprise
Law 2020
1. Right to establish and manage private enterprises and companies (cont’d)
a) State authorities and armed forces using state-owned assets for self-serving enterprise
establishment;
b) Officials and public employees as defined by the Law on Officials and the Law on Public Employees;
c) Military personnel, police officers, and certain public employees, with exceptions for authorized
representatives managing state-owned stakes or state-owned enterprises;
d) Executive officers and managers of state-owned enterprises, excluding those designated as
authorized representatives to manage state-owned stakes in other enterprises;

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
II. Establish and contribute capital to an enterprise according to the Enterprise
Law 2020
1. Right to establish and manage private enterprises and companies (cont’d)
dd) Minors, individuals with limited legal capacity, incapacitated individuals, and organizations without
juridical person status;
e) Individuals facing legal issues, including criminal prosecution, detention, serving sentences, or
court-imposed bans on certain positions; other cases specified by the Law on Bankruptcy and the Anti-
corruption Law. Judicial records may be required upon request by the business registration authority;
g) Juridical persons prohibited from business operations or specific fields according to the Criminal
Code.

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
II. Establish and contribute capital to an enterprise according to the Enterprise
Law 2020
2. Contribute capital to the enterprise according to the Enterprise Law 2020

2.1. Subjects have the right to contribute capital, buy shares, and purchase capital contributions to the
company

2.2 Assets contributed as capital to the enterprise

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
II. Establish and contribute capital to an enterprise according to the Enterprise
Law 2020
2. Contribute capital to the enterprise according to the Enterprise Law 2020
2.1. Subjects have the right to contribute capital, buy shares, and purchase capital contributions to the
company
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; and
b) The entities that are not allowed to contribute capital to enterprises prescribed by the Law on
Cadres and Civil Servants, the Law on Public Employees, and Anti-corruption Law.
(See Article 20 of the Law on Cadres and Civil Servants 2008 (revised and supplemented in 2019), Article 14 Law on Public
Employees 2010 (amended and supplemented in 2019) and Article 20 Anti-corruption Law 2018.)

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
II. Establish and contribute capital to an enterprise according to the Enterprise
Law 2020
2. Contribute capital to the enterprise according to the Enterprise Law 2020
2.2 Assets contributed as capital to the enterprise

According to Article 34 of the Law on Enterprises 2020, capital contributions

can be made in Vietnamese Dong, freely convertible foreign currencies, gold,
land use rights, intellectual property rights, technology, technical know-how,
and other identifiable assets, all valued in Vietnamese Dong. Only legal owners
or those with legal use rights to the contributed assets can use them for capital
contribution.

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
II. Establish and contribute capital to an enterprise according to the Enterprise
Law 2020
2. Contribute capital to the enterprise according to the Enterprise Law 2020
2.2 Assets contributed as capital to the enterprise (cont’d)

For assets not in Vietnamese Dong, freely convertible foreign currency, or gold,
their value must be determined in Vietnamese Dong by members, founding
shareholders, or valuation organizations. If the valuation exceeds the actual
value, founding members and shareholders must contribute the difference and
bear responsibility for intentional overvaluation.

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
II. Establish and contribute capital to an enterprise according to the Enterprise
Law 2020
3. Investment and business sectors and professions

Contents related to regulations on fields and business sectors are specified in the
Investment Law 2020. Investment and business sectors and professions can be
divided into the following 3 basic groups:

3.1 Industries and professions that are prohibited from business

investment;
3.2 Conditional business investment industries and professions; and
3.3 Other industries and businesses that do not belong to the above two
CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
groups. (READ AT YOUR LEISURE)
A. General knowledge on business and business entities
II. Establish and contribute capital to an enterprise according to the Enterprise
Law 2020
3. Investment and business sectors and professions
3.1 Prohibited business and investment industries

Investors will not be granted an enterprise registration certificate if the business line is in a prohibited
business field (Point a, Clause 1, Article 27 of the Law on Enterprises 2020). Prohibited business
investment sectors and occupations are specified in Article 6 of the Investment Law 2020 including 8
groups of industries and occupations:

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
II. Establish and contribute capital to an enterprise according to the Enterprise
Law 2020
(i) trading in narcotics,
(ii) trading in chemicals and minerals listed in the Appendix II of the Investment
Law;
(iii) trading in specimens of wild plants and animals
(iv) prostitution business;
(v) buying and selling humans, tissues, corpses, body parts, and human fetuses;
(vi) business activities related to human cloning;
(vii) trading in firecrackers; and
(viii) business of debt collection services.
CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
II. Establish and contribute capital to an enterprise according to the Enterprise
Law 2020
3. Investment and business sectors and professions

3.2 Conditional business investment sectors and trades

According to Clause 1, Article 8 of the Law on Enterprises 2020, enterprises

engaging in conditional business investment sectors, and foreign investors with
restricted market access, must adhere to business conditions outlined in the
Investment Law.

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
II. Establish and contribute capital to an enterprise according to the Enterprise
Law 2020
3. Investment and business sectors and professions

3.2 Conditional business investment sectors and trades (cont’d)

According to current legal regulations, business conditions are requirements that

businesses must have or must comply with when doing business in specific
industries and occupations, expressed in the following forms:

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
• License (giấy phép): A license is a type of document issued by a competent state agency, allowing a
business entity to conduct one or more certain business activities such as Domestic travel business
license, international travel business license for tourism and travel business;
• Certificate (chứng chỉ): a practicing certificate, authorized by the State, grants to an individual with
sufficient professional qualifications and professional experience in an industry, or certain
profession.
• Document of confirmation and approval (văn bản xác nhận, chấp thuận): the form of expression of
this business condition is usually a document confirming the minimum capital according to
regulations (legal capital) applicable to some business fields where the law requires the enterprise
to have a level of charter capital not being lower than the legal capital.
• Other requirements (điều kiện khác). For example: requirements on business location area,
employee health conditions... Other requirements that businesses must comply with or meet are
considered "business conditions that do not require a license".

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
II. Establish and contribute capital to an enterprise according to the Enterprise
Law 2020
3. Investment and business sectors and professions
3.3 Other business investment industries and professions (READ AT YOUR LEISURE)

In principle, business entities have the right to freely conduct business activities in industries and
trades that are not subject to prohibited business or conditional business as described in the
corresponding sections above without needing to apply for any additional licenses other than the
enterprise registration certificate.

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
II. Establish and contribute capital to an enterprise according to the Enterprise
Law 2020
4. Procedures for establishing and registering a business according to the
Enterprise Law

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
4. Procedures for establishing and registering a business according to the
Enterprise Law
4.1 Overview
4.2 Enterprise registration documents according to the Enterprise Law
4.3 Competent authority for enterprise registration and conditions for issuance of
enterprise registration certificate
a. Competent business registration agency
b. Conditions for being granted a business registration certificate
4.4 Business establishment process
4.5 Enterprise registration certificate and legal value of the Enterprise registration
certificate (READ AT YOUR LEISURE)
4.6. Providing information and publishing business registration content (READ AT YOUR
LEISURE)
4.7. Changing enterprise registration content (READ AT YOUR LEISURE)
CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
II. Establish and contribute capital to an enterprise according to the Enterprise
Law 2020
4. Procedures for establishing and registering a business according to the
Enterprise Law
4.1 Overview

To establish a business, investors must consider, agree with each other and decide
on issues related to (in general):

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
(i) procedures and costs for establishing and operating a business;
(ii) Legal status and responsibilities of business owners;
(iii) number of business owners and business name;
(iv) management structure;
(v) ability to transfer and sell businesses;
(vi) ability to raise capital;
(vii) obligation to publicly disclose information related to enterprise operations;
and
(viii) Corporate income tax

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
II. Establish and contribute capital to an enterprise according to the Enterprise
Law 2020
4. Procedures for establishing and registering a business according to the
Enterprise Law
4.2 Enterprise registration documents according to the Enterprise Law

Enterprise registration documents for different types of businesses are different. Enterprise
registration documents for Sole Proprietorship are specified in Article 19 of the Law on Enterprises
2020 and repeated in Article 21 of Decree 01/2021/ND-CP. Enterprise registration documents for
partnerships, limited liability companies, and joint stock companies are specified in Articles 20, 21, 22
of the Law on Enterprises 2020 and more detailed instructions in Articles 22, 23 and 24 of Decree
01/2021/ND-CP.
CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
II. Establish and contribute capital to an enterprise according to the Enterprise
Law 2020
4. Procedures for establishing and registering a business according to the
Enterprise Law
4.2 Enterprise registration documents according to the Enterprise Law (cont’d)

Basically, a set of Enterprise registration documents includes the following documents:

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
• Application for enterprise registration (as per the prescribed form).
• Comprehensive draft of the company charter complying with legal requirements for all company
types.
• A valid copy of the legal personal identification document of the private enterprise owner,
individual company owner, or the founding members/shareholders of the company. For
organizational members, documents such as establishment decisions, enterprise registration
certificates, and authorization forms are needed (See more at Article 11 Decree 01/2021).
• A list of members/shareholders; and
• An investment registration certificate for foreign involvement are also essential.

In principal, entities establishing businesses must submit a complete set of documents to the business
registration agency, following legal requirements. The agency cannot request additional documents
beyond those specified in the application. The entity is responsible for the accuracy and completeness
of the declared information, while the agency ensures the validity of the submitted dossier.

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
II. Establish and contribute capital to an enterprise according to the Enterprise
Law 2020
4. Procedures for establishing and registering a business according to the
Enterprise Law
4.3 Competent authority for business registration and conditions for issuance of enterprise registration
certificate
a. Competent business registration agency

Competent business registration agencies include provincial-level business registration agencies and
district-level business registration agencies.

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
II. Establish and contribute capital to an enterprise according to the Enterprise
Law 2020
4. Procedures for establishing and registering a business according to the
Enterprise Law
4.3 Competent authority for business registration and conditions for issuance of enterprise registration
certificate
b. Conditions for being granted an enterprise registration certificate

According to the provisions of Clause 1, Article 27 of the Law on Enterprises 2020, an enterprise is
granted a Business Registration Certificate when it meets the following conditions:

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
II. Establish and contribute capital to an enterprise according to the Enterprise
Law 2020
4. Procedures for establishing and registering a business according to the
Enterprise Law
- The business and investment registered profession is not in the field of banned businesses;
- The name of the enterprise is set in accordance with the provisions in the Articles 37, 38, 39,
and 41 of the Enterprise Law (also under Chapter III Decree 01/2021/ND-CP).
- Have valid business registration documents;
- Fully pay the enterprise registration fee according to the provisions of law. The specific
enterprise registration fee is prescribed by the Government.

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
II. Establish and contribute capital to an enterprise according to the Enterprise
Law 2020
4. Procedures for establishing and registering a business according to the
Enterprise Law
4.4 Business establishment process

Registration to establish private enterprises and companies of all types is carried out through the
following steps:

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
II. Establish and contribute capital to an enterprise according to the Enterprise
Law 2020
4. Procedures for establishing and registering a business according to the
Enterprise Law
4.4 Business establishment process

Step 1: Prepare documents

Step 2: Submit documents to the business registration agency
Step 3: Issue Enterprise Registration Certificate

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
II. Establish and contribute capital to an enterprise according to the Enterprise
Law 2020
4. Procedures for establishing and registering a business according to the
Enterprise Law
4.4 Business establishment process (cont’d)

Step 1: Prepare documents (READ AT YOUR LEISURE)

The founder prepares documents to establish the enterprise according to the corresponding
regulations for the type of enterprise as presented in Section 4.2 above. However, to prepare
this dossier, the company's founders/founding shareholders must reach agreement on many
issues as described in Section 4.1 above.

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
II. Establish and contribute capital to an enterprise according to the Enterprise
Law 2020
4. Procedures for establishing and registering a business according to the
Enterprise Law
4.4 Business establishment process (cont’d)

Step 2: Submit documents to the business registration agency (READ AT YOUR LEISURE)
• After being fully prepared, the business establishment documents must be submitted to the
agency with authority to register businesses as described in Section 4.3 above.
• Business founders can also register their businesses electronically through the National
Business Registration Portal (https://dangkykinhdoanh.gov.vn/vn/Pages/Trangchu.aspx)

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A. General knowledge on business and business entities
II. Establish and contribute capital to an enterprise according to the Enterprise
Law 2020
4. Procedures for establishing and registering a business according to the
Enterprise Law
4.4 Business establishment process (cont’d)

Step 3: Issue Enterprise Registration Certificate (READ AT YOUR LEISURE)

The Enterprise Registration Certificate is issued by the competent authority upon satisfying
registration conditions within 3 working days. If not issued within this time frame, the business
founder can file a complaint according to the Law on Complaints, provided there is no notice
requesting dossier amendments within the same period.

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
II. Establish and contribute capital to an enterprise according to the Enterprise
Law 2020
4. Procedures for establishing and registering a business according to the
Enterprise Law
4.5 Enterprise registration certificate and legal value of the Enterprise registration certificate

According to Article 28 of the Enterprise Law 2020, the Enterprise Registration Certificate records the
following 4 contents:
business name, code, address, legal representative details, and capital.
It is valid nationwide, allowing enterprises to operate immediately upon issuance.
For conditional businesses, operation starts upon obtaining a business license or meeting specified
conditions.

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
II. Establish and contribute capital to an enterprise according to the Enterprise
Law 2020
4. Procedures for establishing and registering a business according to the
Enterprise Law
4.6. Providing information and publishing enterprise registration content
Previously, under the Law on Enterprises 2014, business registration agencies were required
to notify tax, statistical, labor management, and social insurance authorities of Enterprise
Registration Certificate details within 5 days. However, the 2020 Enterprise Law abolished this
requirement. Instead, information about business names, codes, addresses, and legal
representatives is now publicly accessible on the national business registration portal,
eliminating the need for separate notifications to relevant authorities.
https://dangkykinhdoanh.gov.vn/vn/Pages/Trangchu.aspx
CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
II. Establish and contribute capital to an enterprise according to the Enterprise
Law 2020
4. Procedures for establishing and registering a business according to the
Enterprise Law
4.7. Changing enterprise registration content

Enterprises are required to inform the business registration agency in writing within 10 working days
of any changes to the details on the Enterprise Registration Certificate. The agency will then review
and make the changes within 3 working days. If the request is denied, the agency must provide a
written notice with reasons and required amendments. If changes to the Enterprise Registration
Certificate are approved, a new certificate will be issued.

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
III. Rights and obligations of enterprises

In general, the legal rights and obligations prescribed for all types of enterprises are stipulated in the
Enterprise Law 2020 as follows:

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
III. Rights and obligations of enterprises
Rights (Article 7)
• Engage in any lawful business line.
• Operate freely and choose organizational structure, business lines, area of operation,
and scale.
• Decide on capital mobilization, distribution, and utilization methods.
• Seek markets, customers, and enter contracts.
• Engage in import and export.
• Employ staff following employment laws.
• Utilize technological advancements and protect intellectual property rights.
• Manage, use, and dispose of assets.
• Decline unlawful requests for resource provision.
• File complaints and participate in legal proceedings.
• Other rights stipulated by law.
CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
A. General knowledge on business and business entities
III. Rights and obligations of enterprises
Obligations or Duties (Article 8)

• Adhere to conditions for restricted business lines and those limited to foreign investors.
• Complete enterprise registration, update information, and fulfill legal obligations.
• Ensure accuracy of registration information, correcting any errors promptly.
• Manage accounting, pay taxes, and meet financial obligations as per the law.
• Safeguard employee rights, prevent discrimination, mistreatment, or child labor, and
provide necessary insurances.
• Fulfill other legal obligations.
• such as being responsible for complying with the provisions of law on national
defense, security, social order and safety, and peace.

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
B. Sole Proprietorship

I. Definition and characteristics of Sole Proprietorships

II. Organizing and managing Sole Proprietorships

III. Rights and obligations of Sole Proprietorships owners

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
B. Sole Proprietorships

I. Definition and characteristics of Sole Proprietorships

1. Definition

2. Characteristics

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
B. Sole Proprietorships

I. Definition and characteristics of Sole Proprietorships

1. Definition
A sole proprietorship is an enterprise owned by a single individual whose liability
for its entire operation is equal to his/her total assets (Article 188).

This concept aligns with the international understanding of sole proprietorship,

emphasizing individual ownership, self-management, and complete responsibility
under Vietnamese law. Key elements defining a private enterprise include its
owner and liability regime.

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
B. Sole Proprietorships

I. Definition and characteristics of Sole Proprietorships

2. Characteristics
1. Owner: an individual
2. Investment capital (NOT Charter capital): determined by the sole proprietor/owner (Article 188)
3. Legal status: not having legal personality
4. Liability regime of the owner: unlimited liability
5. Right to raise capital: is not allowed to issue any type of security
6. Right to transfer capital: may lease or sell the enterprise

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B. Sole Proprietorships

I. Definition and characteristics of Sole Proprietorships

2. Characteristics
1 and 2. A sole proprietorship is invested and owned by an individual
Established by an individual, the owner invests their personal assets into the enterprise,
operating independently without involvement or collaboration with others.
Sole proprietorships lack multiple members contributing capital, and the sole owner has
exclusive authority over organizational, production, and business management decisions.
As a business owned by a single individual, the capital required for establishment is solely
provided by the owner, and the assets utilized in business activities don't require a formal
transfer of ownership to the enterprise, with the owner personally registering the investment
capital.

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B. Sole Proprietorships

I. Definition and characteristics of Sole Proprietorships

2. Characteristics
3. Sole Proprietorships do not have legal status (are not legal entities)
According to Article 74 of the Civil Code In 2015, an organization is recognized as a legal entity
when it meets the following conditions:

• Legally established according to the provisions of the Civil Code and other relevant laws
• Have an organizational structure as prescribed in Article 83 of the Civil Code;
• Have assets independent of other individuals or legal entities and be responsible for your own
assets;
• Participate in legal relations independently on your own behalf.

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B. Sole Proprietorships

I. Definition and characteristics of Sole Proprietorships

2. Characteristics
4. The owner of a sole proprietorship has unlimited liability for all business activities of the enterprise.
Owners of sole proprietorships bear unlimited liability for the enterprise's debts and
obligations. Sole proprietorships, lacking independent legal status and assets, make their
owners personally responsible for all liabilities arising from business activities. The owner's
responsibility extends to covering debts with all their assets, not just those invested in the
business.

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
B. Sole Proprietorships

I. Definition and characteristics of Sole Proprietorships

2. Characteristics
5. Sole proprietorships are not allowed to issue any type of securities.
Current regulations restrict sole proprietorships (and partnerships) from issuing securities to
raise capital for business expansion. Unlike limited liability companies and joint stock
companies with the authority to issue bonds or securities for capital mobilization, sole
proprietopship must rely on their owners investing additional capital or securing financial
loans to fund business growth. They may also consider other sources like gifts or inherited
assets for additional investment. This limitation poses challenges for sole proprietopships in
comparison to companies with broader financing options.

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
B. Sole Proprietorships

I. Definition and characteristics of Sole Proprietorships

2. Characteristics
6. Right to transfer capital: may lease or sell the enterprise

The sole proprietorship owner must notify the Business Registration Authority and tax
authority within 3 working days, accompanied by a notarized copy of the lease, when leasing
the entire enterprise. Despite leasing, the owner remains legally responsible.

The sole proprietopship owner and buyer execute a business purchase contract. Subsequently,
the buyer applies for a change in ownership with the Business Registration Authority at the
business's location within 10 days of the transfer date.
CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
B. Sole Proprietorships

II. Organizing and managing Sole Proprietorships

The business owner has full authority to decide in business operations and corporate management
organizational structure (see more at Article 190).

Sole proprietorpships owners, as per the Enterprise Law 2020, have the flexibility to
personally manage business activities or hire others to take on managerial roles.

The owner determines the specific rights, obligations, and duties of executive positions like
Director or General Director (or Chief Executive Officer). The internal organization of
departments and divisions within the enterprise is at the discretion of the owner, with no
mandatory model prescribed by the law. This flexibility contrasts with other business types,
which must adhere to legal organizational structures, even one-owner entities like a single-
member limited liability company.
CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
B. Sole Proprietorships

III. Rights and obligations of Sole Proprietorship owners

1. Rights of the owners

2. Obligations of the owners

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
B. Sole Proprietorships

III. Rights and obligations of Sole Proprietorship owners

Article 7, Article 8 of the 2020 Enterprise Law regulates the rights and obligations of enterprises in
general but for a sole propritorship (an enterprise without legal status), those rights and obligations
are the rights and obligations performed by the owner of the sole proprietorship. In addition, Articles
190, 191, 192 of the Enterprise Law 2020 directly regulate the rights of sole proprietorship owners to
organize, manage, lease and sell sole proprietorships.

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
B. Sole Proprietorships

III. Rights and obligations of Sole Proprietorship owners

1. Rights of sole proprietorship owners
- Freedom to conduct business in industries and professions that are not prohibited by
law.
- Business autonomy and choice of business organization form; proactively choose
industries, occupations, locations, and forms of business; proactively adjust business scale,
industry and profession.
- Choose the form and method of mobilizing, allocating and using capital.
- Freedom to search for markets, customers and sign contracts.
- Export and import business.
- Recruit, hire and use labor according to labor laws.
- Proactively apply science and technology to improve business efficiency and
competitiveness; intellectual property rights are protected according to the provisions of law
CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F

on intellectual property.
1. Rights of sole proprietorship owners (cont’d)
- The owner of a sole proprietorship has the right to sell his private enterprise to other
individuals and organizations.
- The owner of a sole proprietorship has the right to convert a private enterprise into a
company.
- The owner of a sole proprietorship has the right to temporarily suspend business
operations of the enterprise.
- The owner of a sole proprietorship has the right to dissolve the private enterprise.
- Refuse requests from agencies, organizations, and individuals to provide resources not
according to the provisions of law.
- Complain and participate in proceedings according to the provisions of law.
- Private enterprises do not have their own assets, so the right to possess, use, and
dispose of the enterprise's assets and the right to decide on the use of profits belongs to the
business owner (sole proprietorship owner).

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B. Sole Proprietorships

III. Rights and obligations of Sole Proprietorship owners

2. Obligations of sole proprietorship owners
• Comply with all business investment conditions in conditional sectors, ensuring continual
adherence to these conditions.
• Manage accounting, fulfill tax obligations, and meet other financial responsibilities in accordance
with the law.
• Pay corporate income tax as private enterprises fall under the category of "enterprises" established
by law.

CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D , E a n d F
B. Sole Proprietorships

III. Rights and obligations of Sole Proprietorship owners

2. Obligations of sole proprietorship owners (cont’d)
• Safeguard the legal rights and interests of employees, avoiding discrimination or insults, and
ensuring compliance with labor laws, including social insurance and other required policies.
• Timely fulfill business registration obligations, report changes, disclose information on
establishment and operation, and adhere to reporting and other legal obligations.
• Take responsibility for the accuracy and truthfulness of information in Enterprise registration
documents and reports, promptly correcting any inaccuracies or omissions if identified.

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CO R P O R AT E A N D B US IN ES S L AW – CH A P T ER D