19 Aug Business License – Key Compliance Procedures For Business License Management In Vietnam
Nowadays, applying for a business license has become more simple. Many investors and business owners seem to underestimate these basic procedures in business operation. In fact, there are many legal issues involved in granting a business license, which requires enterprises to spend more time to solve.
This article provides critical key notes to help businesses clarify what are the common types of business license, licensing procedures and common risks.
Common types of business license:
- Enterprise registration certificates.
- Certificate of investment registration.
- Branch, representative office, business location and warehouse registration certificates
- Operating license for specific areas.
Relevant records which should be properly managed and controlled:
- Personal profiles of investors and capital contributors; code of governance issued to shareholders
- Application for incorporation
- Post-licensed compliance records and procedures
- Records of revisions and updated changes
Common Risks for cases of misconduct regarding business license:
- Inappropriate business name: Failure to follow provisions of the laws; the name being too long, difficult to pronounce and misleading when translated into English or abbreviated; the name aimed to cover all planned business lines.
- Unrealistic charter capital: False declaration of high charter capital; declared charter capital being lower than such capital provided for the business scale; Failure to declare capital contributions in the form of assets used in operations.
- Unclear Articles of Incorporation with insufficient procedures: Failure to specify internal management rules; Failure to have members signed and stamped on each page; Failure to archive properly; Failure to make and maintain revisions upon
- Failure to set up projects or carry out procedures for tax incentives: failure to identify conditions for the grant of tax incentives; Failure to register for and optimize tax incentives; Failure to register tax incentives properly.
- Failure to apply appropriate business model: Business model not suitable for business scale and business plan; Failure to anticipate the risk of liability, executive management, especially in enterprises with two or more members; separation between ownership and operations.
- Inappropriate capital structure: Beside declaration and registration of capital in the form of cash, no declaration or registration of capital in the form of assets used in operations is made.
- Failure to collect and archive legal dossiers as prescribed: Failure to keep incorporation registration dossiers; Failure to keep post-licensed compliance records; Failure to keep other internal records, especially the code of internal governance issued to shareholders/owners.
- Failure to keep updated with current regulations: The new Law on Investment and Law on Enterprises of 2014 provide a number of new regulations, requiring enterprises, especially foreign direct investment (FDI) enterprises, to apply for amendment of their investment licenses and for new investment certificates following such new regulations on business registration, etc.
- Other compliance procedures:
– Failure to register business and tax information;
– Failure to display signboards at the licensed location;
– Failure to carry out procedures for printing and issuing invoices as prescribed;
– Failure to carry out procedures for announcement of capital contribution upon approval or changes;
– Failure to carry out procedures for transfer of ownership over assets contributed as capital;
– Failure to compile capital contribution dossiers;
– Failure to organize an archive system of enterprise information as prescribed;
– Failure to apply for permits on establishment of branches, offices or warehouses;
– Failure to register additional business lines;
– Failure to update upon changes related to licenses, such as changes in capital-contributing members, managerial titles, and other personal information;
– Failure to inform or carry out procedures for change of address upon moving to a new location;
– Failure to carry out procedures for tax declaration and payment upon transfer of capital;
– Failure to carry out legal procedures for notice of suspension;
– Failure to compile valid dissolution documents.business license
VIVA BCS’s business license services and how it serves:
- Direct consultation via phone, mobile phone, email on related issues.
- Providing package services customized to each client’s scope and requirements of services according to each job. The package services include full review of all compliance of granting business license and risk remediation dossiers, completion of documentation system, implementation to meet arising requirements, application of new regulations towards optimal benefits.
VIVA has been an in-depth consultant on business compliance procedures in Vietnam since 2006, based on our professional - integrated background in Business laws - Accounting and corporate finance - Tax management - Labor relation and payroll – Business administration procedures. VIVA offers exclusive services in an integrated tailor-made, consist of 5 specialized-expertise platforms and the inheritance experience up to hundreds of years for every job.
Our extensive expertise and management system that facilitates us to connect local resources and be ready to deliver exclusive solutions that exceed all standard limits and satisfy all expectations of our clients.
Last Updated on August 12, 2020