1. What is a business household?

According to the laws of our country, business households are the contents specified in legal documents and sub-law documents. Business households are specified in Clause 1, Article 79 of Decree No. 01/2021/ND-CP with specific contents as follows:

“A business household is established by an individual or household members and is responsible with all their assets for their business activities. In case household members register business households, one member shall be authorized to act as a representative of the business household. Individuals registering business households, persons authorized by household members to act as representatives of business households are business household owners.”

Thus, a business household is an organization owned by an individual or a group of people consisting of individuals who are Vietnamese citizens who have reached the prescribed age and are fully capable of taking responsibility for their own acts or a household, may only register their business under the size of 10 employees, At the same time, they are responsible with their own property.

When a business household employs 10 or more employees, it must register to establish an enterprise according to the latest regulations of the state.

2. Who can set up an offshore business?

According to the law on the registration of the establishment of a company or enterprise, there are 3 groups of subjects to be registered for business households. These 3 groups include:

• The individual is a citizen who is full 18 years old, has awareness of human resources acts and must be a Vietnamese citizen.
• The group of individuals satisfies the above conditions.

Note:

Individuals, members of households or members of a group of management organizations may only register one business household nationwide and have the right to contribute share capital. However, individuals in the name of business households will not be allowed to simultaneously own a private enterprise and a partnership unless they receive the consent of the members of the partnership.

3. Legal basis for procedures for establishment of business households

• Decree 01/2021/ND-CP on business registration
• Enterprise Law 2020
• Decree 47/2021/ND-CP guiding the Enterprise Law
• Decree 122/2021/ND-CP on sanctioning administrative violations in the field of planning and investment

4. KALF’s offshore household registration service

The offshore business household registration service at law firms in Vietnam is the support of clients, usually businesses and individuals, in establishing and managing offshore business households (offshore companies). This service includes procedures related to the registration and maintenance of a business household in a foreign country, usually in large financial jurisdictions or countries with tax advantages.

Specifically, offshore household registration services may include

• Advice on choosing a business registration location:Law firms provide information and advice on suitable countries or regions for your business household based on specific business objectives and requirements.
• Establishment of business households: Register and establish business households according to regulations of the respective country or region. This may include the preparation of custom documents, termination, and filing with the authorities.

• Tax and financial support: Provides information on tax policy and financial management to your business, helping you comply with tax regulations and optimize profits.
• Business household management and maintenance services: Includes services related to the management and maintenance of business households, including financial reporting, records management, and making necessary changes.
• Legal advice and contractual agreements: Provide legal advice, contract advice, and assist in formulating agreements with partners and clients.
• Financial and banking services: Assist with opening bank accounts, processing financial transactions, and managing financial assets of business households.

5. Procedures and dossiers for registration of establishment of offshore business households

Individuals or members of business households shall register at the district-level business registration agency. Upon receipt of the dossier, the local agency shall issue a receipt and issue a Certificate of business household registration within 03 days from the date of receipt of a valid dossier.

Individuals go to the Business Registry and submit directly. The time limit for processing applications is within 03 working days from the date of receipt of complete and valid documents. The business registration fee shall be decided by the People’s Council of the province (based on the provisions of Circular 85/2019/TT-BTC).

Dossiers to be submitted when registering business households

• Application for registration in the form in Appendix III;
• Legal papers of the head of the business household and members in case the member registers;
• A copy of the minutes of the meeting of members of individual business households on the establishment;
• Copies of members’ power of attorney to let an individual head a business household.

Business households will be granted certificates when

• Registered industries and trades are not prohibited from doing business or investment in accordance with the provisions of law;
• The name of the business household is properly named according to regulations;
• Valid application documents;
• The application fee has been paid in full.

Business households are an increasingly popular form of business in all business fields. Understanding the regulations on business household registration will help individuals quickly complete the procedures in the most accurate way.

6. Rights and obligations of business household owners

Rights of owners of offshore business households

• Freedom to do business: Owners of offshore business households have the freedom to do business and manage their business activities to the extent stipulated by the license.
• Ownership of interests and profits:Owners of offshore businesses are allowed to own benefits and profits from their business activities in Vietnam.
• Right to legal protection:Owners of offshore businesses have the right to request legal protection and protection from the Vietnamese authorities in the conduct of their business activities.

Obligations of owners of offshore business households

• Compliance with Vietnamese laws:Owners of offshore businesses must comply with all legal regulations related to their business activities in Vietnam.
• Fulfillment of tax obligations:Owners of offshore business households must comply with tax obligations and other tax contributions in accordance with the provisions of Vietnamese law.
• Reporting and provision of information:Owners of offshore businesses must regularly report on their business activities and provide information to competent government agencies.
• Cooperate with government agencies:Offshore business owners need to cooperate with government agencies and provide necessary information when requested.
• Comply with regulations related to foreign investment:Owners of offshore business households need to comply with regulations on foreign investment that Vietnam can apply.

Note that the specific rights and obligations of offshore business owners may vary depending on their specific type of business and sector. The proper exercise of these rights and obligations is important to maintain legitimate business activities in Vietnam.

7. Conditions for establishing an offshore company

Conditions for establishing an offshore company on documents

• The passport of the owner who wants to establish the company must have a legal expiry date.
• One of the following invoices and documents must contain the name, as well as the address of the person wishing to establish the company, written on the invoice and must be within the last 3 months: landline phone bill, mobile phone bill, electricity bills, water, as well as bank account statements and must bear the bank’s stamp. If the invoice is not in English, the owner must conduct translation and notarization.

Conditions for establishing an offshore company for company name

• You need to provide us with 03 names for the offshore company you intend to establish, then KALF sends our company experts to check whether it has the same name or has been registered by other corporate companies or not and we will prioritize selection in order of priority from top to bottom according to the list. If all 03 names have been registered by the previous enterprise, customers must proceed to provide us with 03 other names and if in case they do not know how to book, we will guide and advise customers then the process repeats as above.
  

  

Conditions for establishing an offshore company on the business plan

In which, the business plan should provide business conduct contents for the company planning to establish, including: what kind of goods to trade, where to buy goods from, where to sell those goods.

Conditions for establishing an offshore company in terms of shareholder structure

Customers need to provide detailed information about each shareholder participating in the founding of the company to KALF: Name, address, number of shares held by each shareholder (%). KALF will conduct search instructions for customers to see if the above information is valid or not.

Note: Documents required for the company may vary depending on the country’s citizenship.

8. Frequently Asked Questions

Application fee?

• The specific fee shall be decided by the provincial People’s Council (based on the provisions of Circular No. 85/2019/TT-BTC).
• The applicant for business household registration shall pay the business household registration fee at the time of submitting the business household registration dossier. The business household registration fee can be paid directly at the department receiving business household registration dossiers at the district level or transferred to the account of the district-level business registration agency or using the online payment service on the National Public Service Portal. Business household registration fees shall not be refunded to business households in case business households are not granted business household registration.

Business households shall be granted a Certificate of Business Household Registration when they fully meet any conditions

• Lines and lines of business registration are not prohibited from business investment;

According to Article 88 of Decree No. 01/2021/ND-CP stipulating the naming of business households as follows:

“1. Business households have their own names. The name of a business household consists of two elements in the following order:

• The phrase “Business household”;
• Proper names of business households.
• Proper names are written with letters of the Vietnamese alphabet, letters F, J, Z, W, may be accompanied by numbers, symbols.

2. Not to use words and symbols that violate the historical, cultural, moral traditions and fine customs of the nation to name business households.
3. Business households may not use the terms “company” and “enterprise” to name business households.
4. The proper name of a business household must not coincide with the proper name of a business household registered within the district.”

• The name of the business household is named in accordance with the provisions of Article 88 of Decree No. 01/2021/ND-CP;
• Having a valid business household registration dossier;
• Pay all business household registration fees as prescribed.

What to avoid during the registration procedure?

• Only 2 subjects are registered for business households: Individuals and household members (groups of individuals are not registered);
• The name of the business household must not coincide with the name of another business household within the district;
• A location can only register 1 single business household nationwide;
• Business household owners are responsible for all their assets, so when registering, it is necessary to pay attention to charter capital;
• Only a maximum of 9 workers can be employed;
• For conditional trades, it is necessary to contact the business registration officer to advise carefully on the necessary conditions and documents before registration to avoid being returned;
• Not all provinces apply directly, it is necessary to ask the business registration officer before doing so.

Why should you set up an offshore business household

• Opportunities to access international markets;
• Simple and fast company establishment procedures;
• Low cost of establishing and maintaining a company;
• The foundation of tax-free countries is privacy and security.

Where to apply for a license to establish an offshore business household

• Provincial-level People’s Committees or centrally-run cities:In most cases, the registration of offshore business households in Vietnam will have to be done through the People’s Committee of the province or centrally-run city, depending on the location that you choose for your business household.
• Law firm or legal services:KALF can help you with the offshore business registration process. Provide advice and support to carry out legal procedures related to the establishment and registration of offshore business households.

Time for processing offshore business household registration dossiers

The processing time for offshore business household registration in Vietnam may vary depending on the type of business activity, competent government agencies, and specific processes. However, usually this process goes like this:

• Submission of registration dossiers:Foreign business household owners need to submit registration dossiers to competent agencies as prescribed.
• Record check:A government agency will conduct a record check to ensure completeness and validity.
• Review and resolution:After examining the application, the government agency will conduct a review and resolve the application. The review period may be lengthy depending on the complexity of the application and the business sector.
• Issuance of licenses:When the application is approved, the owner of the offshore business will be granted a license to operate in Vietnam.

Specific resolution times can vary and often depend on many factors. For the exact resolution time, you should contact the competent government agency or the support of KALF with experience in this field.

During the research process, if you have any questions, please contact us through the following information:

K & ASSOCIATES LAW FIRM

Address : 4th Floor, No. 05 Nguyen Thi Nhung, Van Phuc Urban Area, Thu Duc City, HCMC.

Email : info@k-associates.vn

Phone : (+84) 338747705 (Zalo, facebook, viber, Instagram)

Hotline : (+84) 937298177