Sole Proprietorship Registration Dossier & Key Considerations

The sole proprietorship registration dossier plays a pivotal role in establishing a small-scale business entity in Vietnam. Preparing a complete and accurate dossier according to legal regulations helps individuals avoid unnecessary legal risks and saves time when dealing with business registration authorities. This article will provide a detailed analysis of the required dossier and crucial points to note during the sole proprietorship registration process in Vietnam.

What does the application package for establishing a sole proprietorship (individual business household) entail?

According to Clause 1, Article 82 of Decree 01/2021/NĐ-CP, the founder of the sole proprietorship or the representative of the household needs to prepare one complete set of sole proprietorship registration dossier, including:

1. Application Form for Sole Proprietorship Registration: As per the template in Appendix III-1 issued with Circular No. 01/2021/TT-BKHĐT.
2. Personal Legal Documents (certified copy): For the individual business owner and any household members registering the business. Acceptable documents include a valid Citizen Identity Card (CCCD), Identity Card (CMND), Passport, or other lawful personal identification.
3. Copy of Meeting Minutes of Household Members: Required if multiple household members are co-registering the business. These minutes must clearly state the members’ agreement to establish the sole proprietorship and designate the representative owner.
4. Copy of Letter of Authorization from Household Members: Necessary if household members authorize one member to act as the head of the business. This authorization letter must be signed by all contributing members.
5. If authorizing another person to handle the registration procedure: The dossier must include a letter of authorization and the authorized person’s personal legal documents.

All documents within the dossier must be accurate, truthful, and legally compliant with current regulations.

Latest Procedure for Registering a Sole Proprietorship in Vietnam

The procedure for registering a sole proprietorship in Vietnam is specifically regulated, offering two submission methods: in-person or online. The registration process follows the steps outlined in Article 87 of Decree 01/2021/NĐ-CP to ensure efficient and timely processing within legal deadlines.

1. Step 1: Submit a sole proprietorship dossier and Receive Receipt

• The business founder submits one set of documents to the District-level Business Registration Office (currently the District/Town Finance and Planning Office) where the business will be headquartered.
• Upon receiving the dossier, the District-level Business Registration Office issues a receipt to the applicant.

2. Step 2: Business Registration Office Reviews Dossier and Requests Amendments (if any)

• Within 03 working days from receiving the dossier, the District-level Business Registration Office must notify the applicant or founder in writing. The notification will state the reasons and any required amendments or additions to the dossier.
• The business registration information system will transmit registration details to the Tax Registration Application System for automatic verification of information suitability.
• If the information is suitable, the Tax Registration Application System will automatically generate a business household tax code and assign the managing tax authority.

3. Step 3: Issuance of the Certificate of Sole Proprietorship Registration

• The District-level Business Registration Office issues the Certificate of Sole Proprietorship Registration and a notification of the directly managing tax authority to the founder within 03 working days of receiving a valid dossier.
• If, after 03 working days from submitting the registration dossier, the applicant has not received the Certificate or a notification for amendments, they have the right to file a complaint or denunciation according to the law on complaints and denunciations.

Note for online submission: Applicants access the website https://hokinhdoanh.dkkd.gov.vn/, log in, declare information, upload electronic documents, and use a digital signature for authentication. The Certificate of Sole Proprietorship Registration can be mailed or collected directly from the Business Registration Office, depending on the applicant’s choice.

Key Considerations When Registering a Sole Proprietorship in Vietnam

When establishing a sole proprietorship, besides the registration dossier and procedure, individuals should note the following issues to ensure smooth setup and operation:

• How to correctly fill out the registration application form.
• Conditions for the business owner and household members.
• Permitted business lines for the sole proprietorship.
• Tax obligations of the sole proprietorship.
• Other matters such as the business name, use of invoices, etc.

How to Fill the Application Form for Sole Proprietorship Registration

The Application Form for Sole Proprietorship Registration (Appendix III-1, Circular No. 01/2021/TT-BKHĐT) must be filled out completely and accurately. Key points include:

• Business Name: Must comply with Article 88 of Decree 01/2021/NĐ-CP, including “Hộ kinh doanh” (Sole Proprietorship/Business Household) and its unique name.
• Business Address: Clearly state the house number, street/hamlet/village, ward/commune/town, district/town, and province/city.
• Business Lines: Specify according to the fourth-level codes in Vietnam’s Standard Industrial Classification system.
• Business Capital: State clearly in numbers and words.
• Signature of the Business Owner: Must be signed directly; authorization for signing is not permitted.

Conditions for the Sole Proprietorship Owner and Members

According to Articles 80 and 81 of Decree 01/2021/NĐ-CP, important conditions for the business owner and members include:

• Establishment Conditions:
  • Individuals or household members must be Vietnamese citizens with full civil act capacity.
  • Not fall under prohibited categories: minors, individuals with limited/lost civil act capacity, those under criminal prosecution, serving prison sentences, banned from practicing specific professions, or other cases stipulated by relevant laws.
• Registration Limits:
  • Each individual/household member can only register one sole proprietorship nationwide and has the right to contribute capital, buy shares, or purchase capital contributions in enterprises as an individual.
  • Individuals or household members registering a sole proprietorship cannot simultaneously be the owner of a private enterprise or a general partner (unless agreed upon by other general partners).
• Responsibilities of the Business Owner:
  • Fulfill tax and other financial obligations of the business.
  • Represent the business in civil matters, as a plaintiff, defendant, or related party before arbitration or courts, and exercise other rights and obligations per law.
  • Can hire managers for business operations but remains responsible for debts and property obligations.
• Joint Responsibilities:
  • The owner and participating household members are jointly responsible for business activities.
  • Liable for debts and property obligations arising from business operations.

Note:

• A sole proprietorship can only register one business location, which can be the permanent residence, temporary residence, or regular place of business.
• Sole proprietorships can employ fewer than 10 laborers. If employing 10 or more, they must register to convert into an enterprise.

These regulations aim to ensure transparency and accountability in the business activities of sole proprietorships, clearly defining the scope of rights and obligations for both the owner and participating members.

Business Lines for Sole Proprietorships in Vietnam

The choice of business lines must comply with current legal regulations, with several points to note:

• Registered business lines must not be on the list of prohibited investment sectors.
• For conditional business lines, the sole proprietorship can only operate after meeting all conditions stipulated by specialized laws and must maintain these conditions throughout its operation.
• If the business registration office receives notice from a competent authority that the sole proprietorship does not meet business conditions, it will issue a notice requesting the temporary suspension of that business line.
• Itinerant traders or mobile businesses are allowed to operate outside their registered location but must notify the tax and market management authorities where their headquarters are registered and where activities are conducted.
• Business locations cannot be established in collective housing areas or apartment buildings, as these are designated for residential purposes only, not business functions, according to the Law on Housing.

Tax Obligations for Sole Proprietorships in Vietnam

The tax obligations for a sole proprietorship are determined based on annual revenue and are classified into two main groups:

1. Case 1: Sole Proprietorships with Annual Revenue Under VND 100 Million

In this case, the business enjoys the following benefits:

• Exemption from Value Added Tax (VAT).
• Exemption from Personal Income Tax (PIT).
• No need to declare license fees; the tax authority will self-determine revenue as the basis for calculating the license fee.

2. Case 2: Sole Proprietorships with Annual Revenue Over VND 100 Million

In this case, the business must fulfill the following tax obligations:

• License Fee: Paid according to the rates specified in Clause 2, Article 4 of Decree 139/2016/NĐ-CP and Point c, Clause 1, Article 1 of Decree 22/2020/NĐ-CP:

  • Revenue over VND 500 million/year: VND 1,000,000/year
  • Revenue from over VND 300 million to VND 500 million/year: VND 500,000/year
  • Revenue from over VND 100 million to VND 300 million/year: VND 300,000/year

• VAT and PIT: Calculated using the formulas:

  • VAT payable = Revenue subject to VAT × VAT rate
  • PIT payable = Revenue subject to PIT × PIT rate

Other Important Issues to Consider

In addition to the above, individuals should also pay attention to:

• Business Name: Article 88 of Decree 01/2021/NĐ-CP stipulates that the unique name of a sole proprietorship must not be identical to that of another registered sole proprietorship within the same district. The name must be written in Vietnamese alphabet characters, letters F, J, Z, W, and may include numbers and symbols. The terms “công ty” (company) or “doanh nghiệp” (enterprise) are not allowed in the name.
• Legal Liability: The sole proprietor is liable with all their personal assets for the business operations. The sole proprietorship self-declares its dossier and is legally responsible for the legality, truthfulness, and accuracy of the declared information.
• Use of Invoices: Sole proprietorships needing invoices are not permitted to self-print them but must register to purchase invoices from the managing tax authority as per Article 11, Circular No. 39/2014/TT-BTC. (Note: Invoice regulations have been updated significantly by Decree 123/2020/NĐ-CP and Circular 78/2021/TT-BTC regarding e-invoices. The text refers to an older circular for this specific point, but the general principle of obtaining invoices from tax authorities or using authorized e-invoices applies).
• Time for Determining Presumptive Tax Revenue: The period for determining revenue is from November 20th to December 15th of the year preceding the tax year. For newly established sole proprietorships or those changing scale or business lines, the revenue determination period is within 10 days from the start of business or the change.
• License Fee Exemptions: Sole proprietorships established after February 25, 2020, are exempt from the license fee in their first year. Those with annual revenue under VND 100 million, non-regular businesses without a fixed location, and businesses involved in salt production, aquaculture, and fishing are also exempt from the license fee.

Sole proprietorships are fully responsible for the truthfulness of the declared content with management agencies to avoid unnecessary penalties.

Frequently Asked Questions (FAQ) about Sole Proprietorship Registration Dossier

For convenience, we have compiled some frequently asked questions about the sole proprietorship registration dossier and procedures.

Can a sole proprietorship operate online?

Yes, sole proprietorships are allowed to conduct online business. However, they must still register a fixed business location as their main office and comply with e-commerce regulations under Decree 52/2013/NĐ-CP and Decree 85/2021/NĐ-CP. Online sole proprietorships must fully declare and pay taxes as required.

How long does it take to register a sole proprietorship?

According to Article 87 of Decree 01/2021/NĐ-CP, the processing time for a sole proprietorship registration dossier is 03 working days from the date of receiving a complete and valid dossier. This timeline applies to both in-person and online submission methods.

Is it mandatory for sole proprietorships to use e-invoices?

According to Clause 1, Article 11 of Decree 123/2020/NĐ-CP (as amended by Decree 70/2025/NĐ-CP), only sole proprietorships engaged in direct sales of goods or services to consumers (including: shopping centers; supermarkets; retail (excluding automobiles, motorcycles, and other motor vehicles); food and beverage services; restaurants; hotels; passenger transport services, direct support services for road transport, arts, entertainment, amusement, film screening, other personal services as per the Vietnam Standard Industrial Classification) are eligible to register for e-invoices if they meet one of the following three criteria:

• Sole proprietorships paying presumptive tax with annual revenue exceeding VND 01 billion;
• Sole proprietorships using cash registers (Point-of-Sale systems);
• Sole proprietorships whose revenue and labor scale meet the highest criteria for micro-enterprises under the law on supporting small and medium-sized enterprises, and who must implement an accounting regime and declare taxes using the declaration method.

Comprehensive Sole Proprietorship Registration Services at Long Phan Consulting Company

Long Phan Consulting Company offers comprehensive sole proprietorship registration services with outstanding advantages. Our services include:

• Consultation on choosing the appropriate business type;
• Advice on naming the sole proprietorship;
• Guidance on selecting business lines;
• Drafting dossier for sole proprietorship registration, submitting applications, and receiving results.

Long Phan Consulting Company is committed to assisting clients in completing the sole proprietorship registration procedure quickly, legally, and cost-effectively. We accompany our clients from the beginning of the registration process until they receive the Certificate of Sole Proprietorship Registration and related dossier.

Besides sole proprietorship registration, we also provide many other services such as consulting on tax declaration issues, registration of changes to sole proprietorship information, dissolution of sole proprietorships, and conversion from sole proprietorships to enterprises. Please contact us for a free consultation and a service quote tailored to your specific needs.

Conclusion

When establishing a sole proprietorship, individuals must meet and comply with regulations regarding the necessary registration dossier and procedures. Understanding these regulations helps clients minimize time and costs. If you have any further questions or require services for registering a sole proprietorship/enterprise, please contact us via hotline 1900.63.63.89 for timely support.