Starting a business is a very complex process. Therefore, many start-up entrepreneurs are facing many difficulties in important issues that need to be answered when setting up a business. The following article will give the top questions about business establishment that businesses are interested in.
According to the provisions of the Business Law 2020, subjects with the right to establish a business are organizations and individuals that are recognized by law for the right to establish a business. Individuals who have the right to establish businesses must have full civil act capacity to take responsibility for the businesses they establish or contribute capital to establish.
Accordingly, as long as an individual is 18 years old and is not forbidden to set up a business, he or she can register to establish a business in Vietnam.
However, prospective business owners should note that the right to establish a business of certain individuals with full civil capacity and of some organizations with legal status will be eliminated for various reasons according to the provisions of Vietnamese law.
Having a beautiful, attractive business name in this day and age is not easy because after the start-up movement a few decades ago, beautiful, attractive and powerful names in Vietnam for businesses have been almost ‘sold out’.
Accordingly, in order to have a good name, businesses should consider consulting with a reputable law firm so that together they can create a prestigious brand name that will last over time.
Regarding regulations, as long as the business does not have the same name as the existing business names on the market or the trademarks that have been registered exclusively in Vietnam and internationally, there will be basically no restrictions.
Businesses should only pay attention to preparing all necessary elements such as trademark registration, and domain names with the same brand name before officially starting a business.
According to Business Law 2020, the declaration of capital completely depends on the goals of the business.
Accordingly, the minimum capital is non-existent. Businesses can even declare a minimum capital of 1 million dongs.
However, businesses need to be aware of some business lines that require fixed legal capital. Accordingly, for those business lines, the business must register the capital level in accordance with the law, but also does not need to prove the capital source, only ensure to be responsible for the declared capital source.
For many startups, renting a large office is quite difficult. That is why usually they will think about renting an apartment or even using the apartment or house they are living in to register as a business headquarters.
However, according to the current law, apartments and group houses are not allowed to be registered as the head office of the business, nor the address of the branch, representative office, or business location of the business.
Accordingly, startups that use apartment buildings as working locations are often non-formal and employees need to pay careful attention to working in such places.
Businesses are required to hang signs at their headquarters with the following contents:
• Name of the governing body (the agency issuing the Business Registration Certificate, i.e. the Department of Planning and Investment);
• Company’s name
• Office address
• Phone number or email (if any).
If there is no revenue, do the expenses have to be declared and tax be paid?
The fact that many large businesses in Vietnam and internationally use financial tricks to report losses after a year of business is often to avoid having to pay a huge tax.
However, for newly established businesses, the lack of revenue, expenses, and ‘losses’ are not too surprising. According to the provisions of the law, if after the establishment of a business, the business reports a loss and is properly verified, they will not have to pay tax.
However, even though they do not have to pay tax, every quarter, businesses still have to declare taxes such as value-added tax, and report on the use of invoices and year-end financial statements.
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