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The National Assembly The Socialist Republic of Vietnam
Independence-freedom-Happiness.
December 12th, 1990.
Amended on June 22nd, 1994.
Pursuant to article 83 of the constitution of the Socialist Republic of Vietnam;
This law makes provisions on private enterprise.
CHAPTER I GENERAL PROVISIONS
Article 1:
All Vietnamese citizens who are eighteen (18) years of age or older are entitled to establish private enterprises in accordance with the provisions of this Law.
Article 2:
In this Law private enterprise means a business unit which has a level of capital no less than that of its legal capital, which is owned by an individual who shall, to the extent of his total assets, be responsible for its business activities. bu siness means the carrying on. for the purpose of generating profits, of one or more stages of the investment process, from production to sale of products or provision of services.
Article 3:
The State recognizes the long - term existence and development of a private enterprise, the equality before the law of a private enterprise and other enterprises, and the lawful generation of profit by its business. Within the framework of the law, the owner of a private enterprise is free to carry out his business and make independent decisions in relation to its business activities.
Article 4:
The right to own means of production, to inherit capital and all assets, and other legal rights and interests of the owner of the enterprise shall be protected by the State.
Article 5:
Individuals may not carry on businesses which are prohibited by law. The approval of the prime Minister of Government is required for the establishment of private enterprises which propose to conduct business in the following areas and occ upations:
1. Manufacturing and distribution of explosives, poison, and toxic chemicals.
2. Mining of certain precious minerals.
3. Production and supply of electricity and water on a large scale.
4. Manufacture of information transmitting facilities, postal and telecommunication services, broadcasting, television, and publication.
5. Ocean shipping and air transportation.
6. Specialist export and import business.
7. International tourism.
Article 6:
Persons who are certified insane, under criminal prosecution or who have been convicted and whose sentence has not been erased from the record are prohibited from establishing or managing their own private enterprises.
Article 7:
Public servants currently employed in State Operations and officers on active service in the people's armed forces are prohibited form establishing or managing private enterprises.
CHAPTER II THE ESTABLISHMENT, BUSINESS REGISTRATION, DISSOLUTION AND BANKRUPTCY Of A PRIVATE ENTERPRISE
Article 8:
Any individual who wishes to establish a private enterprise shall submit an application to the people's committee which is authorized by the Government to grant a licence. The following information must be clearly stated in the application:
1. Name, age, and permanent addresses of the owners of the enterprises.
2. The proposed head office of the enterprise.
3. Objectives, specific branches, and areas of business of the enterprise.
4. Initial invested capital. State clearly the proportions constituted by Vietnamese currency, foreign currency, gold, and assets in kind.
5. Environmental protection measures to be taken. The application must be attached to the initial business plan.
Article 9:
Any individual who is entitled to establish a private enterprise shall satisfy the following requirements before a licence is granted:
1. Objectives, branches, and areas of business must be well defined, details of the business office and its specific business plan must be provided.
2. Initial capital must be sufficient for the scale, branches and areas of the business. The initial capital shall be no less than the legal capital stipulated by the Government.
3. The owner of the enterprise on the manager whom he has employed for the purposes of management of the business operation shall have the qualifications required by law for their relevant branch and areas of business.
Article 10:
Within thirty (30) days from the date on which it receives the application, the people's committee shall grant or refuse to grant a licence to establish a private enterprise. In the event that the application is refused the reason for this dec ision must be explicitly stated. Where the applicant for the establishment of a private enterprise is dissatisfied with the refusal to grant a licence he may appeal directly to the state body at a higher level of people's committee which has po wer to grant the licence.
Article 11:
Within sixty (60) days from the date on which the establishment of the enterprise is granted, its owner shall register his or her business with the planning committee at their equivalent level with and the people's committee which has granted the licence. The application file for registration shall include: the licence to establish the enterprise, a bank certificate of the amount deposited in Vietnamese or foreign currency, and in gold in the bank account of the owner of the enterprise; a cer tificate of the notary public office confirming the value of assets held which belong to the owner of the enterprise and which correspond to the initial invested capital recorded in the licence, and the certificate acknowledging the busine ss office of the enterprise. In the event that registration does not occur within the sixty (60) days stipulated in paragraph 1 of this Article and the owner of the private enterprise wishes to continue with the establishment of the private enter prise, he must reapply for the establishment of an enterprise again. In the event that the reason for delay is legitimate, the people's committee which originally granted the licence may extend the time limit for registration for a per iod no greater than thirty (30) days.
Article 12:
During the process of registration the name of the private enterprise shall be recorded in the business registration book and a certificate of business registration shall be issued. from that point of time, the private enterprise is aut horized to proceed with its business operations. The planning committee shall, within seven days from the date on which the certificate of business registration is issued, send a copy of it attached to the file of the enterprise to the taxation offi ce and, financial, statistical and management bodies of economic and technical branches at their equivalent level/
Article 13:
Within thirty (30) days from the date on which the business licence is granted, the owner of the private enterprise who has received the licence from the people's committee of the province or city under central authority or equivalent adm inistrative unit shall cause to be published in the local or central newspapers the following principal items:
1. full name of the owner of the enterprise and the name of the enterprise.
2. The address of the head office of the enterprise.
3. The objectives, branches, and areas of business of the enterprise.
4. Initial invested capital.
5. The date of granting of the licence, the date of issue of the certificate of business registration and its number.
6. The date of commencement of the operations of the enterprise.
Article 14:
In the event that the owner of the private enterprise finds it is necessary to establish a branch or representative office outside the province or the city under central authority or an equivalent administrative unit where its head o ffice is located, he shall:
1. Request a permit from the people's committee of the province or city under central authority where its branch or representative office is based , and register its business operations at the planning committee of the same level, as pro vided in article 9 and article 11 of this Law.
2. Notify in writing, within fifteen (15) days from the date on which the branch or representative office registered for business operation, the people's committee which granted the licence, of the opening of its Branch or representative office.
Article 15:
In the event that the owner of the enterprise wishes to change its objectives, branches, areas of business, initial invested capital or other items contained in its business registration file, he shall notify the planning committee loc ated where the business has been registered. Where the private enterprise concerned has been granted its licence by the people's committee of the province or city under central authority its owner shall also cause all changes to be publi shed in the newspapers.
Article 16:
A private enterprise may be dissolved only if its owner guarantees full payment of all debts and complete settlement of all contracts which it has signed. In order to dissolve the enterprise, its owner shall submit his or her application to the people's committee which has granted the licence, and cause to be published information regarding the dissolution in a local or central newspaper. The application and information must explain clearly the sequence and procedures for li quidation of the assets, the time limit for payment of debts and the settlement of all contracts.
The people's committee may approve the application for dissolution only where no claim has been made after fifteen (15) days from the expiry of the time limit for the payment of debts and the settlement of all contracts as stated in the app lication and information regarding the dissolution. The dissolution of the enterprise may only commence upon the grant of approval of the application for dissolution.
Article 17:
An private enterprise being in bankruptcy shall be an enterprise which suffers from difficulties or loses in doing its business, after exhausting all necessary financial measures but still not be able to pay debts when they due. The pr ocedures for, and sequence of, bankruptcy shall accord with the provisions of the law on bankruptcy.
CHAPTER III ORGANIZATION Of THE OPERATIONS Of A PRIVATE ENTERPRISE
Article 18:
A private enterprise may be named after a given branch, area of occupation or personal name. On its signboard, vouchers, advertisements, reports, documents and other transaction papers the name of the enterprise must be stated together wi th the words private enterprise and the amount of initial invested capital.
Article 19:
The owner of the private enterprise may, himself, manage or employ another person to manage the business operations of the enterprise but shall , in any event, remain personally responsible for all of its activities. The owner of the private enterprise may appear before the economic arbitration body or a law court as either the plaintiff or the defendant in disputes and law suits relating to his business.
Article 20:
The initial invested capital of the enterprise shall be declared by its owner. The capital in Vietnamese or foreign currency or in gold deposited at the bank where the owner of the enterprise has opened an account shall be certified by the bank. Where the capital is comprised of assets in kind, it must be certified by a notary public office. The initial invested capital of the enterprise and the other assets used by its owner in its business operations must be recorder in its books of accounts.
Article 21:
During the process of this operations, the owner of a private enterprise may increase or reduce his original invested capital, provided that the capital remaining is not less than its legal capital. Any increase or reduction in capital must b e recorded in full in the books of account.
Article 22:
The owner of a private enterprise shall, subject to the provisions of the law, have the right to:
1. Select the branch, areas of activities, and scale of his business.
2. Select the form and method of raising funds.
3. Select customers and enter into direct transactions and sign contracts with them.
4. Recruit and hire labour as required by his business.
5. Use his earned foreign currencies.
6. Make decisions regarding the use of remaining revenue.
7. Take initiatives in all of his registered business activities.
Article 23:
The owner of the private enterprise shall have the right to lease his enterprise. Before leasing out, he shall report in writing to the planning committee which issued the business licence. During the term of the lease, the owner of the pri vate enterprise shall remain legally responsible for it in a capacity as its owner.
Article 24:
The owner of the enterprise may sell or merge it with another enterprise. Before the sale or merger occurs however, the owner of the enterprise shall submit an application to the people's committee which granted the licence, stating the reason for the sale or merger and attaching the following:
1. A confirmation from the creditors of the enterprise stating the owner's satisfaction of all debts, a guarantee of the other enterprise or of a bank responsible for the debts of the enterprise.
2. A confirmation of the customers of the enterprise that the enterprise has settled in full all of its contracts or the guarantee of other enterprises in the country that those contracts will be implemented.
The people's committee shall approve the sale or merger of the enterprise only after the owner of the enterprise has caused its application to be published in three consecutive editions of a newspaper every five days without receiving any clai ms within the fifteen (15) days which follow thereafter. The sale or merger of the business shall take effect only after the approval of application has been granted. After completing all procedures concerning the sale or merger with another enterp rise, the owner of the enterprise shall submit a declaration to the planning committee which issued the licence for business registration in order that its name may be deleted from the registration book and this shall have to be done publicly.
Article 25:
The owner of the private enterprise shall the following obligations:
1. To make a correct declaration of his invested capital for business .
2. To carry on its activities in accordance with the branch and areas stated in the licence.
3. To give priority to the use of local labour, ensure the rights and interests of its employees in accordance with the provisions of the laws on labour and respect the rights of the trade union organizations under the law on Trade Unions.
4. Guarantee the quality of goods in accordance with the standards stated in the registration.
5. To observe all regulations of the State in relation to environmental protection, the protection of historical and cultural relics, natural landscapes, law and order and social security.
6. To keep books of account and cost accounting in accordance with the law on accountancy and statistics and be subject to the examination of the financial authorities.
7. To pay taxes and fulfill other obligations stipulated by the Law.
CHAPTER IV DEALING WITH BREACHES
Article 26:
Any person who establishes a private enterprise without a licence or who carries on business without registration, or where he does have registration, carries on a business which does not conform with the branch or area registered in the lic ence, or who breaches other provisions of this Law, shall depending on the seriousness of the breach, be liable to administrative penalty or subject to criminal prosecution in accordance with the provisions of the law.
Article 27:
Any person who takes advantage of his position and authority to grant licenses for the establishment of private enterprises to persons who are prohibited from owning them, or to persons who are not permitted to establish them, or, alte rnatively, who fails to grant licenses for the establishment of private enterprises or certificates for business registration to those who are fully qualified for them, or who, for the benefit of the owner of the enterprise, wrongl y certifies the bank deposited capital or value of the assets in kind, or who breaches other stipulations of this Law, shall, depending on the seriousness of the breach, be subject to administrative penalties or to criminal prosecution as provided by law.
CHAPTER V fiNAL PROVISION
Article 28: This Law shall be of full force and effect as of 15 April, 1991. All previous provisions which are inconsistent with this Law are hereby repealed. Within one hundred and eighty (180) days from 15 April 1991, the owners of private enterprises who, prior to that date, were granted licenses by authorized bodies for the establishment of enterprises shall complete the procedures for establishment again and reapply for business licenses in accordance with the provisions of this Law.
for The National Assembly
of the Socialist Republic of Vietnam
The Chairman
NONG DUC MANH
(Signed)