Corporate Law · 25.09.2024

How to Register a Sole Proprietorship in Vietnam

A sole proprietorship in Vietnam takes three working days to register. Living with one takes rather longer, and two decided cases show why. What a sole proprietorship in Vietnam really is Article 188(1) of the Enterprise Law defines it in a single line. One individual owns it, an…

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By Lawyer Le Phuong Thanh – UniLaw LLC

A sole proprietorship in Vietnam takes three working days to register. Living with one takes rather longer, and two decided cases show why.

What a sole proprietorship in Vietnam really is

Article 188(1) of the Enterprise Law defines it in a single line. One individual owns it, and that individual answers for every activity of the business with all of their own assets.

Notice what is missing. There is no legal personality, no separate pot of company assets, and no ceiling on liability. The business and the person are the same thing in law.

Three further limits catch people out. Article 188(2) bars the enterprise from issuing securities of any kind. Article 188(3) allows each individual only one, and bars the owner from also being a household business owner or a general partner in a partnership. Furthermore, Article 188(4) stops the enterprise contributing capital to, or buying into, a partnership, a limited liability company or a joint stock company.

So this form suits a one-person trade that will stay one-person. It does not suit a founder who expects partners, investors or a group structure later.

A decided case on selling a sole proprietorship in Vietnam

Judgment No. 37/2023/KDTM-PT of 2 August 2023 — Superior People’s Court in Hanoi, dispute over the sale of a private enterprise.

A clean-water plant in Hai Duong had been registered in 2009, during the owner’s marriage. The couple divorced in June 2021 without dividing their common property. Then the husband alone signed a principle contract, three appendices and a sale contract transferring the whole business.

The Court of Appeal declared every one of those documents void. Three reasons stand out.

The business was matrimonial property

Articles 29 and 35 of the Law on Marriage and Family require the written agreement of both spouses to dispose of common property that includes real estate, registrable assets or the family’s main source of income. Article 213 of the Civil Code says the same. The wife never signed.

There was no company to sell

The court put it plainly. A private enterprise has no legal personality, so its assets are the owner’s personal assets. Selling “the business” is therefore a transfer of assets attached to a person, not a transfer of a company.

The leased land was not clear

The site sat on 4,712 m² leased from the State at annual rent. Under Article 175(1)(c) and Article 189(1)(b) of the Land Law, that transfer needed the competent authority to confirm that construction matched the approved detailed plan and investment project. Nobody had obtained it.

Read the first-instance reasoning as well. That court had relied on Articles 190 and 192 of the Enterprise Law, which do let the owner sell. The appeal court held that reasoning insufficient, because other branches of law still apply.

A second case: the debt follows the person

Judgment No. 21/2021/KDTM-PT of 24 March 2021 — Superior People’s Court in Ho Chi Minh City, credit contract dispute.

A bank sued the owner of a private enterprise in Vinh Long over loans dating back to 2004. The first-instance court ordered the man himself to pay principal of VND 11,181,730,391, and the Court of Appeal upheld that judgment in full.

The security fared worse than the debt. A mortgage over land had never been notarised or registered, so it had no effect against a later good-faith purchaser. Consequently the bank kept a personal judgment and lost the asset behind it.

That is the shape of the risk. Liability attaches to the individual, while the collateral can disappear through a defect in someone else’s paperwork.

How to register a sole proprietorship in Vietnam

Article 19 keeps the file remarkably short: an application for enterprise registration, plus a copy of the owner’s legal papers. Nothing else.

One simplification shortens it further. Where the owner declares a personal identification number under Article 11 of Decree 168/2025/ND-CP, the file no longer needs copies of identity documents at all.

Where the file goes

The authority changed in 2025, and older guides are wrong on this point. Under Article 20 of Decree 168/2025/ND-CP, provincial business registration now sits with the registration body inside the Department of Finance. A hi-tech park management board registers businesses located inside its park.

Article 26(1) of the Enterprise Law allows three routes: in person, by post, or online through the National Business Registration Portal.

The three-day clock

Article 26(5) then gives the registry three working days to register the enterprise or to say in writing what needs fixing. A refusal must also be in writing, with reasons.

Article 27(1) lists what is checked, and the list is short. The sector must not be prohibited, the name must comply with Articles 37 to 39 and 41, the file must be valid, and the fee must be paid.

Article 34 of the decree adds a warning. The fee falls due on filing, and the State does not refund it where registration is refused. So each attempt costs money, and the cheapest file is the one that is right first time.

Capital, management and the first duties

Article 189(1) leaves the investment capital to the owner. However, the declaration must be accurate: the total, split between Vietnamese dong, freely convertible currency, gold and other assets, with the type, quantity and remaining value of each other asset.

Article 189(2) then requires every asset used in the business, including borrowed money and leased equipment, to appear in the accounting books and financial statements. Article 189(3) allows increases freely, while a reduction below the registered figure must be registered first.

Management is simple. Article 190(1) gives the owner every decision, including what happens to profit after tax. Under Article 190(2) the owner may hire a Director or General Director, yet remains liable for everything the business does.

Article 190(3) makes the owner the legal representative before arbitration and the courts. Meanwhile Article 33 of Decree 168/2025 sets when trading may begin: from the date of the certificate, unless the sector is conditional, in which case the sector licence comes first.

Leasing, selling and passing on a sole proprietorship in Vietnam

Article 191 allows the owner to lease out the whole enterprise. Written notice, with a notarised copy of the lease, must reach the business registration authority and the tax authority within three working days of the lease taking effect. Throughout the term the owner still answers to the law as owner.

Article 192 governs a sale. Crucially, paragraph 2 keeps the seller liable for debts and other property obligations that arose before the handover date, unless seller, buyer and creditors agree otherwise. The buyer then registers the change of owner under paragraph 4.

Article 193 handles the awkward events. If the owner is detained or serving a sentence, someone else must be authorised. On death, the heirs agree who takes over; failing agreement, they convert the business into a company or dissolve it. And where a court bans the owner from a trade, the business stops that line or moves to someone else.

Converting into a company later

Article 205 offers the exit, and the conditions are worth reading before you start rather than after.

The owner must commit in writing to personal liability with all their assets for unpaid debts, agree in writing with the counterparties to unliquidated contracts, and commit in writing on taking over the existing staff. The registry then has three working days to issue the certificate.

One point survives the conversion. Under Article 205(3) the new company inherits the rights and obligations, but the former owner stays personally liable for every debt arising before the company’s certificate was issued. Conversion changes the future, not the past.

Changing, pausing or closing a sole proprietorship in Vietnam

Every change to the registered details has its own filing, and the deadlines are short. Our step-by-step notes cover each one.

Registering a change: capital, business lines, head office address, name, legal representative and contact details.
Notifying a change: capital, business lines, head office address, name, legal representative and contact details.
Pausing or ending: temporary suspension, dissolution, and other changes.

Legal basis

Enterprise Law, Law No. 59/2020/QH14, as amended by Law No. 76/2025/QH15 of 17 June 2025 — Article 19 on the registration file, Article 26 on filing routes and the three-working-day rule, Article 27 on the conditions, Articles 188 to 193 on the private enterprise, and Article 205 on conversion into a company.
Decree No. 168/2025/ND-CP of 30 June 2025 on enterprise registration — Article 11 on the personal identification number, Article 20 on the registration authority, Article 33 on when trading may begin, and Article 34 on the non-refundable fee.
Civil Code, Law No. 91/2015/QH13, Article 213, and the Law on Marriage and Family, Law No. 52/2014/QH13, Articles 29 and 35 — consent where the business is matrimonial property.
Land Law, Law No. 31/2024/QH15 — conditions for transferring assets attached to leased land.

Decided cases are published on case.unilaw.vn. Choosing between this form and a company is work for our Vietnam corporate lawyers. See also our notes on the limited liability company in Vietnam, on starting a business in Vietnam, and on the cost of setting up a company in Vietnam.