Can foreigners establish individual business households?

Can foreigners establish a business household? Conditions for establishing a business household for foreigners? Documents and procedures for registering a sole proprietorship? fdiinvietnam.com will answer you in the article below.

Can foreigners set up a business household in Vietnam?

A sole proprietorship (also known as a family business) is a small-scale business model that is simple, easy to manage, and easy to obtain a business registration certificate. To register a sole proprietorship, you need to meet the following conditions:

• The subject of establishing a business household must be an individual or a member of a household with Vietnamese nationality, 18 years of age or older and with full civil act capacity;
• The address for business registration must be a private home address (a house with a red book), or an address at an office building or other locations that allow business registration;
• The business household name must be unique and not duplicate or cause confusion with other business households established within the same district;
• The business line of a household business must be in the list of Vietnamese business lines, and must be permitted by law to register and operate. In addition, a household business must not register for business lines that are restricted/prohibited from registration by the district-level business registration authority.

➨ From there you can understand that foreigners are not allowed to establish a business household but can choose to establish a company and apply for an investment certificate.

However, in some cases, foreigners still want to establish a sole proprietorship, they can refer to one of the following two ways:

• Method 1: Obtain Vietnamese nationality and then establish a business household;
• Method 2: Authorize a Vietnamese person to establish a business household.

>> See details: Procedures for registering a sole proprietorship and 7 things you need to know.

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In the content below, Online Accounting will guide you on how to register a business household for foreigners in the form of authorization and naturalization.

Foreigners naturalized as Vietnamese citizens to register for business households

After naturalization, foreigners officially become Vietnamese citizens and can legally establish business households.

1. Conditions for foreigners to obtain Vietnamese nationality

Pursuant to Article 19 of the 2008 Law on Nationality and Article 7 of Decree 16/2020/ND-CP, foreigners are eligible for Vietnamese nationality if they meet the following conditions:

• Have been a permanent resident in Vietnam for 5 years or more up to the time of applying for citizenship and have been granted a permanent residence card by a competent authority;
• Have full civil act capacity according to the provisions of Vietnamese law;
• Comply with the laws and Constitution of Vietnam;
• Respect the traditions, customs and practices of the Vietnamese people;
• Know enough Vietnamese to integrate and adapt to the living and working environment in Vietnam;
• Foreigners have assets and income to ensure their living in Vietnam or are sponsored by organizations or individuals in Vietnam;
• Naturalization does not affect or harm the national interests of Vietnam.

2. Application for Vietnamese nationality

Note:

• The criminal record must be issued no more than 90 days before the date of application for naturalization;
• Documents proving Vietnamese proficiency can be: copies of doctoral degrees, master’s degrees, bachelor’s degrees, university degrees, college degrees, intermediate degrees, high school or junior high school diplomas of Vietnam; copies of Vietnamese language certificates according to the Vietnamese language proficiency framework for foreigners issued by Vietnamese educational institutions;
• In case a foreigner applying for Vietnamese nationality does not have documents proving Vietnamese language proficiency, the Department of Justice shall coordinate with the Department of Education and Training to organize a test and interview on the foreigner’s Vietnamese communication ability (including 3 skills: listening, speaking, reading, writing);
• Documents proving the living conditions of foreigners in Vietnam include: documents proving assets, salary, income; guarantee documents from organizations and individuals in Vietnam; confirmation from the People’s Committee of the commune where the foreigner applies for citizenship on the work status, income, and place of residence;
• In case a foreigner has a minor child applying for Vietnamese nationality, he/she must provide a copy of the child’s birth certificate or other documents proving the father-child or mother-child relationship;
• In case a foreigner is exempted from certain conditions for acquiring Vietnamese nationality, he/she must provide documents and papers proving the exemption conditions;
• Papers and documents in the application for Vietnamese nationality, if issued by a competent authority of a foreign country, must be translated into Vietnamese and consularly legalized (except in cases exempted from consular legalization).

3. Steps to apply for Vietnamese citizenship

➨ Step 1: Prepare documents

Foreigners applying for Vietnamese citizenship prepare 3 sets of documents including papers as fdiinvietnam.com instructed above.

➨ Step 2: Submit application

Foreigners submit their application directly to the Department of Justice of the province/city where they reside.

➨ Step 3: Receive documents and return results

• After receiving the application, if the application is found to be complete and valid, the Department of Justice will issue a receipt of the application to the foreigner and schedule a time to return the results (procedure processing time is about 115 days);
• In case the application is incomplete or invalid, the Department of Justice shall immediately notify the foreigner applying for Vietnamese nationality to supplement, adjust the application and resubmit it.

Foreigners authorize Vietnamese to register a business household in their name

In case a foreigner has a close friend or relative who is Vietnamese, the foreigner can authorize them to establish a sole proprietorship, while the foreigner remains the manager, operator and enjoys profits from the sole proprietorship.

The authorization document or authorization contract will be signed by the foreigner and the Vietnamese person, who will be responsible for themselves according to the provisions of the 2015 Civil Code. In which, the foreigner is Party A – the authorizing party, the Vietnamese person is Party B – the authorized party.

Vietnamese people authorized to register a sole proprietorship must meet the following conditions:

• 18 years of age or older, have full civil capacity and are not subject to business prohibitions or restrictions;
• Have ID card/passport;
• Not currently the owner of another individual business or the owner of a consulting business or a general partner of a general partnership.

Instructions on documents and procedures for registering a sole proprietorship

As fdiinvietnam.com shared above, after foreigners are naturalized, they can do the procedures to establish a business household themselves as in normal cases.

Below is the set of documents for establishing a business household for foreigners who have naturalized in Vietnam and Vietnamese people authorized to register individual households for foreigners.

How to apply: 

• Submit directly to the People’s Committee of the district/county where the business household is registered;
• Submit online on the public service page of the Department of Planning and Investment of the province/city.

Agency receiving and processing documents: 

• The Finance – Planning Department or the District Business Registration Office is responsible for receiving and processing business registration applications within 3 working days;
• If the application is valid, the Finance – Planning Department or the District Business Registration Office will issue a business license;
• In case the dossier is invalid, the Finance – Planning Department or the District Business Registration Office will issue a notice requesting amendments, supplements to the dossier and resubmission within the prescribed time limit.

Time to process application and issue business registration certificate is 3 working days.

>> See details: Procedures for registering a sole proprietorship and 7 things to know.

Above are the shares of fdiinvietnam.com about whether foreigners can establish individual business households in Vietnam or not? If you need more information or are interested in the service of establishing a business household, you can contact fdiinvietnam.com at 0978 578 866 (North),  033 9962 333 (Central)  or  033 9962 333 (South) for advice and use of the service.

Call us at  0978 578 866 (North)  –  033 9962 333 (Central)  –  033 9962 333 (South)  for support.