A business household is registered and established by an individual or members of a household who are simultaneously responsible for all of their assets. However, not everyone can establish a business household, but must meet the legal requirements. Does the law allow foreigners to establish business households in Vietnam? NPLaw will answer your questions about foreigners establishing business households in Vietnam through the following article.
For small-scale businesses that are easy to manage, the business household model is indeed the top priority. With a scale of less than 10 employees and business lines mainly utilizing natural resources such as agriculture, forestry, aquaculture, mining, etc., this model attracts many foreigners who want to establish business households in Vietnam. However, foreigners need to be aware of the legal barriers when establishing business households in Vietnam.
According to legal regulations, individuals and household members who are Vietnamese citizens with full civil capacity as prescribed by the Civil Code have the right to establish business households, except in some cases prescribed by law. Thus, to be able to establish business households, individuals or household members must be Vietnamese citizens.
According to Clause 1, Article 5 of the Nationality Law 2008, a person with Vietnamese nationality is a Vietnamese citizen. Therefore, foreigners without Vietnamese nationality are not allowed to establish business households.
This authorization will be made through an authorization contract according to the provisions of the Civil Code 2015. Specifically, the authorizing party is the foreigner who wants to establish a business household, and the authorized party is a Vietnamese citizen who fully meets the conditions to establish a business household.
On the business household registration certificates, the business household owners are the authorized persons. Foreigners can completely be the managers and operators of the business households and enjoy the profits from the business activities of those business households. These contents will be specified in the authorization contracts.
Thus, foreigners cannot establish business households in Vietnam, but they can authorize Vietnamese citizens to have the right to manage and operate and enjoy all benefits as the owners of business households.
The conditions to establish business households are that individuals or household members must be Vietnamese citizens. Thus, foreigners can naturalize in Vietnam to be able to establish business households in Vietnam. However, foreigners need to meet the conditions for naturalization in Vietnam according to Article 19 of the Law on Nationality 2018, specifically:
The specific legal characteristics of business households include the following main characteristics:
According to current Vietnamese law, the legal regulations do not allow foreigners to establish business households in Vietnam.
The number of documents needed to establish a business household for an individual is 01 set.
According to Clause 1, Article 17 of the Law on Enterprise 2020, all organizations and individuals have the right to establish and manage enterprises in Vietnam, except for cases where they are not allowed to establish enterprises as specified in Clause 2, Article 17 of the Law on Enterprise 2020. At the same time, individuals with foreign nationality who invest in business activities in Vietnam are considered foreign investors according to Clause 19, Article 3 of the Law on Investment 2020. The Law on Enterprise 2020 does not have regulations limiting the type of enterprise for foreign investors. Therefore, investors can choose:
In Clause 1, Article 7 of the Law on Enterprise 2020, enterprises are free to operate in any industry or field that is not prohibited by law. Thus, foreigners are allowed to establish enterprises in Vietnam as foreign investors when doing business in industries and fields that are not prohibited by Law.
The above information is provided by NPLAW to answer questions about foreigners establishing business households in Vietnam. If you have any further questions, please contact NPLAW at the following contact information:
CÔNG TY LUẬT TNHH NGỌC PHÚ
Customer service: 19009343
Hotline: 0913 41 99 96
Email: legal@nplaw.vn
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