Legal regulations for establishing a private enterprise in Vietnam

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Legal regulations for establishing a private enterprise in Vietnam

A private enterprise is an enterprise owned by an individual who is solely responsible for all his or her assets for all activities of the business. Regulations on establishing a private enterprise in Vietnam are determined based on two main factors: the right and the conditions for establishing a private enterprise. This regulation is applicable to the establishment of all private enterprises in Vietnam.

Current Vietnamese law sets out the principle that each individual has the right to establish a private enterprise. However, not every individual has the right to establish a private business.

The establishment of a private enterprise must satisfy the following regulations and conditions:

  • Right to establish a business: According to the right to establish a business as stipulated in Article 33 of the 2013 Constitution, all Vietnamese citizens have the right to freely establish a business in industries not prohibited by law, including the freedom to choose and establish the type of business that individuals desire. Foreign individuals and legal entities are also free to establish private enterprises within the framework permitted by law.
  • The name of the enterprise: According to Article 37 of the Enterprise Law 2020, the name of a private enterprise must be written in Vietnamese and consist of two elements in the following order: Type of business and proper name of the business.
  • Business line: Business lines are legal according to the provisions of Vietnamese law.
  • Enterprise headquarters: The address of the headquarter of the enterprise must be specified. In addition, the individual who wants to establish a private enterprise needs to provide more phone numbers, fax numbers, and email addresses (if any).
  • Authorized capital: To contribute authorized capital according to the provisions of law for each business line.
  • Number of employees: The number of employees of a private enterprise is limited to a maximum of 10 employees.
Legal regulations for establishing a private enterprise in Vietnam

Specific conditions for establishing a private enterprise

  • Each private enterprise has only one individual owner.
  • Conditions for private enterprise owners: Each individual is only entitled to establish a private enterprise; The owner of a private enterprise cannot concurrently be the owner of a business household or a member of a partnership; Individuals wishing to establish a private enterprise must have full legal capacity for civil acts; Individuals within the scope of persons specified in Clause 2, Article 18 of the Enterprise Law 2014 are not entitled to establish private enterprises; Individuals who are serving a prison sentence, or are banned from operating or doing business under effective court decisions or judgments.
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