Question: Dear Lawyer, we are currently planning to establish a private enterprise and would like to learn more about the procedures involved. As we have not yet decided on the specific business line, we only need to refer to the most general regulations and procedures. We respectfully request your advice on the following: What conditions must be satisfied and what documents are required when carrying out the procedures for establishing a private enterprise? We look forward to receiving your support. Thank you very much!
Answer
1. What is a private enterprise?
According to Clause 1, Article 188 of the Law on Enterprises 2020: “A sole proprietorship is an enterprise owned by a single individual whose liability for its entire operation is equal to his/her total assets.”
2. Conditions for establishing a private enterprise
- The registered business lines are not banned;
- The enterprise’s name must comply with the provisions of law;
- The enterprise registration application is valid;
- The enterprise registration fees are fully paid in accordance with regulations of law on fees and charges;
Legal basis: Clause 1, Article 27 of the Law on Enterprises 2020..
Note:
- A sole proprietorship is an enterprise owned by a single individual whose liability for its entire operation is equal to his/her total assets.
- The owner of a sole proprietorship must not concurrently own a household business or hold the position of general partner of a partnership.
-The capital of a sole proprietorship shall be registered by its owner. The sole proprietorship’s owner shall register the accurate amounts of capital in VND, convertible currencies, gold and other assets, types and quantities of assets.
- A sole proprietorship must not issue any kind of securities.
- A sole proprietorship must not contribute capital upon establishment or purchase shares or stakes of partnerships, limited liability companies or joint stock companies.
Legal basis: Article 188 and Clause 1, Article 189 of the Law on Enterprises 2020.
3. Required documents:
- The enterprise registration application form;
- Copies of legal documents of the sole proprietorship’s owner.
- In case an individual is authorized to carry out the enterprise registration procedure, the enterprise registration dossier must include a power of attorney authorizing such individual to perform procedures related to enterprise registration. This power of attorney is not required to be notarized or certified..
Note: In case both the owner of the private enterprise and the authorized individual carrying out the enterprise registration procedure already have personal identification numbers, and the person carrying out the procedure requests to declare personal information in the enterprise registration dossier and agrees to share the personal information stored in the National Population Database with the Business Registration Authority and state management agencies in charge of enterprise registration for state management purposes in accordance with regulations, then the enterprise registration dossier is not required to include copies of the legal personal documents of the private enterprise owner and the authorized individual.
Legal basis: Article 19 of the Law on Enterprises 2020 and Clause 1, Article 24 of Decree 168/2025/ND-CP.
Consultation: corporate law services
