BUSINESS LICENSE IN HCM CITY, VIETNAM
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1- WHAT IS A BUSINESS LICENSE?
A business license is a legal document issued by a competent state agency to an individual or organization, allowing them to conduct business in a specific industry in accordance with the provisions of law. This license confirms that the enterprise has complied with the necessary legal conditions and is permitted to conduct business activities in accordance with regulations.
According to law of Vietnam:
“Business license” includes licenses, certificates of eligibility, certificates of professional liability insurance, confirmation documents, other forms of documents stipulating the conditions that individuals and organizations must meet to carry out business investment activities issued by state agencies or competent persons to such individuals and organizations in accordance with the provisions of law.
2- CHARACTERISTICS OF BUSINESS LICENSES IN VIETNAM
a) Legality
- A business license is a document issued by a competent state agency to an enterprise, confirming that the enterprise has met the conditions to do business in a specific industry or field.
- This is the legal basis for an enterprise to legally operate in a conditional industry. If there is no license, the business will be considered illegal in that field.
b) Only applicable to conditional industries
- Not all businesses need a business license. A business license only applies to conditional industries, that is, industries that require meeting certain standards regarding safety, health, environmental protection, or professional rules.
- Common industries that require a business license include healthcare, education, transportation, real estate, food, finance, and industries related to the environment.
c) Binding conditions
To be granted a business license, a business must meet specific conditions prescribed by law. These conditions may relate to:
- Capital: Some industries require businesses to have a minimum amount of capital.
- Personnel: Businesses may be required to have qualified personnel, with certificates or practice licenses.
- Facilities: Some industries require facilities and equipment that meet standards to ensure safety and quality.
- Professional and technical requirements: For industries that require high professional qualifications or special techniques.
d) Validity period
- Business licenses usually have a certain term (for example: 1 year, 3 years, or 5 years), and when they expire, businesses must apply for renewal to continue operating.
- During the validity period, if a business violates regulations related to the industry, the license may be revoked or suspended.
e) Inspection and supervision
- Because business licenses apply to conditional industries, these businesses often have to comply with inspection and supervision regulations from state agencies to ensure that the business maintains the initial conditions when the license was granted.
- This inspection can be periodic or ad hoc, and if violations are found, the business may be fined or have its license revoked.
g) Not freely transferable
A business license is usually only valid for the licensed business or individual and cannot be freely transferred to other parties, unless approved by a competent state agency.
h) Purpose of public protection and social interests
A business license is issued to ensure that businesses operating in sensitive industries that affect health, safety or public interests must comply with certain standards to protect consumers and society.
In summary:
A business license is a necessary document for conditional industries, helping businesses ensure legal operations, comply with legal regulations, and meet safety and quality standards. This is a way for state management agencies to control and protect the common interests of society, while helping businesses build reputation in their industry.
3- CONDITIONAL INVESTMENT AND BUSINESS INDUSTRIES IN VIETNAM
When investing and doing business in conditional investment and business industries in Vietnam, enterprises must have a Business License.
Conditional investment and business industries are industries and professions in which investment and business activities must meet necessary conditions for reasons of national defense, security, social order and safety, social ethics, and public health.
The list of conditional investment and business industries and professions is specified in Appendix IV of the Investment Law 2020.
Investment and business conditions for conditional investment and business industries and professions are specified in laws, resolutions of the National Assembly, ordinances, resolutions of the National Assembly Standing Committee, decrees of the Government and international treaties to which the Socialist Republic of Vietnam is a member. Ministries, ministerial-level agencies, People's Councils, People's Committees at all levels, other agencies, organizations and individuals are not allowed to issue regulations on business investment conditions.
Business investment conditions must be regulated in accordance with the reasons specified in Clause 1, Article 7 of the Investment Law 2020 and must ensure publicity, transparency, objectivity, and save time and compliance costs for investors.
Conditional business investment sectors and professions and business investment conditions for such sectors and professions must be posted on the National Business Registration Information Portal.
List of Conditional Business Lines Under Investment Law 2020 of Vietnam (Details)
4- DISTINGUISHING BUSINESS REGISTRATION CERTIFICATES AND BUSINESS LICENSES
Business registration certificates and business licenses are both important documents in the process of establishing and operating a business, but they have differences in purpose, content, and issuance procedures. Below are the basic differences between these two types of documents:
a) Business registration certificate
- Purpose: This is a document confirming the establishment of a business and is issued by a state management agency, usually the Department of Planning and Investment. The business registration certificate provides basic information about the business.
- Content: Includes information about the business name, business code (tax code), head office address, charter capital, business lines, and legal representative.
- Requirements: All businesses must have a business registration certificate before operating legally.
- Validity period: The business registration certificate is valid for the entire duration of the business's operation, until the business is dissolved or its license is revoked.
b) Business license
- Purpose: This is a license required for a business to legally operate in certain conditional business sectors (for example: transportation, healthcare, education, food, finance, etc.). The business license confirms that the business has met all legal conditions to operate in a specific field.
- Content: Includes the conditions and standards that a business must meet to operate in a conditional business sector. This may relate to requirements for capital, personnel, facilities, or other professional requirements.
- Requirements: Only businesses operating in specific or conditional business sectors need to apply for a business license.
- Validity period: Usually has a certain period (for example: 3 years, 5 years) and must be renewed when it expires. Some business licenses may be revoked if the business violates the prescribed conditions.
In summary:
- Business registration certificate: Is a necessary document for every business when it is established and contains basic information about the business. It is a mandatory requirement for the business to exist and operate legally.
- Business license: Is a document for conditional business lines, confirming that the business is qualified to operate in that field. Not all businesses need a business license.
Both types of documents play an important role in helping businesses operate legally and comply with legal regulations.
5- IS IT OK TO DO BUSINESS WITHOUT A BUSINESS LICENSE? HOW MUCH IS THE FINE?
A business license is only required for conditional investment and business lines. If an enterprise conducts business in an industry or trade that does not require conditions, it only needs a Business Registration Certificate to be allowed to conduct business.
Pursuant to Clause 1, Article 8 of the Enterprise Law 2020, the obligation of an enterprise is to meet all investment and business conditions when conducting business in a conditional investment and business line.
Thus, according to the provisions of Point a, Clause 2, Article 206 of the Enterprise Law 2020, when an enterprise conducts business in a conditional investment and business line but does not meet the business conditions prescribed by law, the Business Registration Authority or competent state agency shall request the enterprise to temporarily suspend, cease operations, or terminate business.
Thus, when doing business in a conditional investment and business sector without a certificate of eligibility to do business, the Business Registration Authority or a competent state agency will request the enterprise to temporarily suspend, cease operations, or terminate business. If the enterprise continues to do business, it will be subject to an administrative penalty with a fine of VND 50,000,000 to VND 100,000,000. (Based on Point b, Clause 4, Article 46, Decree 122/2021/ND-CP).
6- PROCEDURES FOR APPLYING FOR A BUSINESS LICENSE FOR A CONDITIONAL BUSINESS LINE IN VIETNAM
a) Prepare documents
Depending on the conditional business line, the documents may vary, but usually include the following documents:
- Application for a business license: Signed and sealed by the business or legal representative.
- Business registration certificate: Copy of the business registration certificate.
- Documents proving eligibility: This is the most important part of the application, including documents proving that the business meets all the conditions required by law. Depending on the business line, these conditions may be:
+ Legal capital: Proving that the business has the minimum capital as prescribed.
+ Practice certificate: For professions requiring high expertise, a practice certificate of the representative or person in charge of the profession is required.
+ Facilities: Documents proving that the business has a location and facilities that meet the standards (such as food safety and hygiene licenses, fire prevention and fighting licenses, etc.).
+ Labor contracts or practice certificates of employees: Specific professions require employees to have appropriate practice certificates.
b) Submitting documents
After completion, the documents must be submitted to the competent state agency that issues licenses for that profession.
The agencies that usually receive the documents are the Department of Planning and Investment, the Ministry of Industry and Trade, the Ministry of Health, or relevant departments and branches depending on each specific profession.
c) Appraisal and inspection of documents
- After receiving the documents, the competent agency will review and inspect the documents and conditions that the business has prepared.
- In some cases, the licensing authority may request the enterprise to supplement, clarify or complete missing documents.
- The competent authority may conduct a direct inspection at the enterprise's premises to verify the conditions (such as checking facilities, personnel, etc.).
d) Receive results
- If the application meets the requirements and the enterprise meets all the conditions, the licensing authority will proceed to issue a business license to the enterprise.
- If the application is not qualified or does not meet the requirements, the competent authority will refuse to grant the license and notify the enterprise of the reasons for correction.
e) Licensing time
- The application processing time may last from 15-30 working days or longer depending on the industry and licensing authority.
- In some complicated cases, this time may be longer if the enterprise has to supplement documents or take corrective measures.
g) Post-licensing inspection and supervision
- After granting a business license, the state agency may conduct periodic or surprise inspections of the enterprise to ensure that the conditions are maintained during operation.
- If the enterprise is found to violate the committed conditions or not comply with legal regulations, the license may be suspended or revoked.
Some notes
- Enterprises need to regularly update the latest regulations on business conditions to ensure compliance with the requirements.
- Some industries require the license to be renewed after a certain period of time, so enterprises need to pay attention to the time to submit the renewal application on time.
In summary
The procedure for applying for a business license for a conditional industry is a process that requires careful preparation and compliance with legal procedures. Preparing complete documents and meeting the conditions is an important factor for enterprises to be able to operate legally in a conditional industry.
7- BUSINESS LICENSE APPLICATION SERVICE IN HCM CITY, VIETNAM OF THUY NGOC LAW FIRM
When performing the business license application service, Thuy Ngoc Law Firm will perform the following tasks:
- Consulting customers to prepare necessary documents and information
- Drafting documents
- Submitting documents to competent authorities
- Receiving business licenses from competent authorities
- Handing over business licenses to customers.
8- WHY DO YOU CHOOSE BUSINESS LICENSE APPLICATION SERVICE IN HCM CITY, VIETNAM OF THUY NGOC LAW FIRM?
a) Experience and high expertise
Thuy Ngoc Law Firm has a team of experienced experts, with in-depth knowledge of legal procedures and regulations related to applying for business licenses.
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b) Save time and effort
Using the business license application service at Thuy Ngoc Law Firm helps customers not have to learn and handle complicated procedures themselves, saving time and effort to focus on their main business activities.
c) Dedicated consulting
The company provides thoughtful consulting services, answering all questions related to the license application process, helping customers clearly understand the conditions and benefits.
d) Minimize legal risks
With the company's support, the documents will be prepared properly and completely, helping to minimize the risk of the application being rejected or legal problems arising later.
e) Reasonable cost
Thuy Ngoc Law Firm's services have reasonable fees, helping businesses save costs while still ensuring efficiency.
g) Long-term monitoring and support
The company not only supports during the licensing process but also monitors and supports after obtaining the license, ensuring that the business complies with regulations and can operate stably.
9- BUSINESS LICENSE SERVICE FEE IN HCM CITY, VIETNAM OF THUY NGOC LAW FIRM
The business license service fee depends on the specific industry and business field.
Please contact Thuy Ngoc Law Firm for a quote.
For further information about business license application service in HCM City, Vietnam
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