What conditions must a pawnshop service business meet?

Article overview

The pawnshop service business opens up attractive investment opportunities in the financial industry. Enterprises participating in this field need to master legal regulations to operate effectively and safely. In this article, Long Phan will analyze in detail the requirements, registration process and obligations of pawnshop businesses, helping you build a solid foundation for your business in this potential field.

Things to note when doing pawnshop service business
Things to note when doing pawnshop service business

Responsibilities of pawnshop service establishments

Pawnshop service establishments must comply with the responsibilities prescribed in Article 29 of Decree 96/2016/ND-CP. In addition to the general responsibilities specified in Article 25 of this Decree, pawnshop businesses must also perform the following specific tasks:

  • Check the identification documents of the person bringing the property to pledge, including: Identity card or Citizen identification card or Passport or other personal document with a photo issued by a state management agency, still valid value of use, and at the same time photocopying is kept at the business establishment.
  • Prepare a property mortgage contract according to the provisions of law.
  • For mortgaged assets that are required by law to have a certificate of ownership, they can only be mortgaged when those assets have full ownership papers and the business establishment must retain the originals of all types of mortgaged assets. That paper during the mortgage period.
  • For mortgaged assets owned by a third person, there must be a valid written authorization from the owner.
  • Do not accept mortgages of assets of unknown origin or assets acquired due to illegal acts.
  • The interest rate for lending money when mortgaging property does not exceed the interest rate prescribed by the Civil Code.
  • Arrange a warehouse to preserve the pledged assets and ensure the safety of the assets of the person who pledges the assets.

Requirements that must be met when providing pawnshop services

According to Article 9 of Decree 96/2016/ND-CP (amended and supplemented by Decree 56/2023/ND-CP), pawnshop service establishments must meet general and specific conditions. as follows:

Conditions of security and order

First, General Conditions:

1. Enterprises must be registered, licensed or established by Vietnamese law.

2. Persons responsible for security and order of business establishments do not fall into the following cases:

For Vietnamese people:

  • Being criminally prosecuted.
  • Having a criminal record for crimes of infringing upon national security or other crimes due to intentional errors and being sentenced to more than 3 years in prison or not having their criminal record erased.
  • Being temporarily suspended from serving a prison sentence; are serving a non-custodial reform sentence; are under house arrest, banned from residence, banned from holding positions, and banned from doing business in investment and business lines subject to security and order conditions according to the Court’s decision.
  • Being subjected to educational measures in communes, wards, and towns; there is a decision to apply administrative measures while waiting for the implementation of the decision; are addicted to drugs; being temporarily suspended or temporarily suspended from complying with the decision to be sent to a compulsory education facility or sent to a compulsory drug treatment facility.

For Vietnamese residing abroad holding foreign passports and foreigners, a residence permit has not yet been granted by a competent Vietnamese agency.

3. In addition, businesses must also meet the conditions for fire prevention and fighting safety according to the provisions of the law on fire prevention and fighting.

Second, Special conditions:

During the 05 years immediately preceding the time of business registration, the person responsible for security and order of the pawn shop service establishment has not been sanctioned by the authorities for any of the following administrative violations: Behavior Resisting people on duty, disturbing public order, intentionally causing injury, lending at high interest rates, gambling, organizing gambling or gambling, theft of property, fraudulent appropriation of property, illegally occupying property.

Responsibilities when providing pawnshop service business
Responsibilities when providing pawnshop service business

Conditions for business registration

Business establishments must be registered, licensed or established in accordance with Vietnamese law, specifically the Law on Enterprise 2020 and its guiding documents. Pawnshop service business entities can do business in the form of enterprises or business households.

Conditions for fire prevention and fighting

Depending on the size of the pawn shop’s workplace, it must meet certain different fire safety and firefighting conditions. This condition is specifically stipulated in Article 5 of Decree 136/2020/ND-CP and Circular 149/2020/TT-BCA issued by the Ministry of Public Security on December 31, 2020.

Procedure for applying for a certificate of satisfaction of security and order conditions

Registration documents

According to Article 19 of Decree 96/2016/ND-CP, the application file for a new pawnshop service business license includes:

  1. Document requesting the issuance of Certificate of eligibility for security and order of the enterprise (Form No. 03 Appendix attached to Decree 56/2023/ND-CP).
  2. Valid copy of one of the following documents: Business registration certificate; Business registration certificate; Investment registration certificate; Operation registration certificate of branches and units under the enterprise; Business household registration certificate.
  3. Authorization document for the person to submit the application and receive results if not the legal representative.
  4. Warehouse rental contract (if the enterprise or business household does not have a warehouse to store raw materials or products).
  5. Documents of the person responsible for security and order of the enterprise or business household:

For Vietnamese people in the country:

  • Background statement (Form No. 02 in the Appendix issued with Decree 56/2023/ND-CP).
  • Criminal record cards (except for those on the payroll of the armed forces).

For Vietnamese residing abroad holding foreign passports and foreigners:

  • Personnel declaration (Form No. 02b in the Appendix issued with Decree 96/2016/ND-CP).
  • A valid copy of Passport, Permanent Residence Card or Temporary Residence Card or Visa with valid stay in Vietnam.

Note: If a business establishment has many legal representatives, the CV, Criminal Record or Personnel Declaration in the file applies to the person named in the Certificate of Eligibility. about security and order.

Implementation procedures

The process of applying for a license to operate pawnshop services is detailed in Article 23 of Decree 96/2016/ND-CP (amended and supplemented by Decree 56/2023/ND-CP):

Step 1: Submit application

Enterprises and business households submit 01 set of documents to the Police Department for administrative management of social order of the Police of provinces and centrally run cities. How to apply:

  • Submit directly
  • Submit via public postal service
  • Submit via the National Public Service Portal or the Public Service Portal of the Ministry of Public Security (except for documents and papers that are not allowed to be posted via the network according to the provisions of law).

Step 2: Review and issue Certificate

  • After receiving all valid documents, the Police agency has 5 working days to review and issue a Certificate of satisfaction of security and order conditions. In case the Certificate is not issued, the Police agency must respond in writing to the enterprise or business household and clearly state the reason within 04 working days from the date of receipt of the application.
Documents and steps to apply for a Pawnshop Service Business License
Documents and steps to apply for a Pawnshop Service Business License

Consulting services on professional pawnshop service business according to the latest regulations 2024

The Vietnamese pawn market is growing rapidly, requiring businesses to master the law and apply effective business strategies. Long Phan, with a team of experienced experts, provides comprehensive consulting solutions to help customers overcome challenges and take advantage of opportunities in this field.

Consulting and support services at Long Phan include:

  • Consulting on conditions, guidance on documents and procedures for establishing a pawnshop service business.
  • Consulting on conditions, documents and procedures for applying for fire prevention and fighting licenses.
  • Consulting on conditions; Instructions on procedures and documents to apply for a certificate of satisfaction of security and order conditions.
  • Support in building business processes to help optimize pawnshop operations, ensuring efficiency and legal compliance.
  • Consulting and support for issues arising during and after registering a pawnshop service business

The Vietnamese pawn market is entering a period of strong development, creating many attractive business opportunities. To grasp trends and ensure legal compliance, businesses need a reliable consulting partner. Let Long Phan accompany you in your pawnshop service business journey. With our professional support, you will build a solid foundation, comply with the law and make the most of the market potential. Contact Long Phan immediately via hotline 0906735386 to receive detailed advice and start your successful journey in the pawnshop industry.