Selecting a location for business registration is one of the first yet most crucial steps for any investor. This location not only serves as the hub for daily business operations but also plays a vital role in shaping the company’s image and brand in the eyes of customers, partners, and stakeholders. A strategically chosen and well-prepared location provides a strong foundation, attracts better talent, and enhances long-term growth potential.
In this article, LawPlus highlights some critical considerations when selecting a business registration location. This guide aims to help clients choose a suitable location for business registration.
Table of Contents/Mục lục
1. Notes on Prohibited and Special Business Registration Locations
Under Article 40 of the Law on Enterprises 2020, the registered head office of an enterprise must be located within the territory of Vietnam and serve as the official address of the business. It must comply with administrative boundaries and be equipped with a phone number, fax, and email (if available).
According to Clause 11, Article 6 of the Law on Housing 2014, it is prohibited to use apartments for purposes other than residential use. Additionally, areas within apartment buildings designated for business activities must not be used for trading flammable materials, engaging in environmentally polluting or noisy services, or other activities that may negatively affect other residents as per government regulations. Thus, businesses are prohibited from registering at locations such as apartments, collective housing units, or buildings not designated for office use.
Moreover, when selecting a registration address, individuals and organizations should familiarize themselves with local regulations, such as restrictions on business activities in certain areas, rules on signage, operating hours, and noise levels. For locations in border communes, wards, islands, or other areas affecting national defense and security, it is advisable to consult local authorities and review specific regulations, especially for foreign investors.
>>> Read more at PROCEDURE FOR ESTABLISHING A BUSINESS IN VIETNAM
2. Proof of Legal Ownership/Usage of the Business Registration Location
To register a business and operate it after obtaining a Business Registration Certificate, individuals and organizations must prove legal ownership or usage rights over the location.
- For foreign investors: They are required to provide documentation, such as a lease agreement (along with legal papers of the leased property), showing the project’s location. The lease agreement must specify that the investor is the tenant and is authorized to use the premises for investment activities.
- For Vietnamese individuals or organizations: While they are not strictly required to provide such documentation during company establishment, they must be prepared to meet any requirements that may arise from business registration authorities.
Using virtual office addresses for business registration has become increasingly common. While Vietnamese law does not define “virtual office” nor explicitly ban its use for registration, it is worth noting that such arrangements may face challenges, such as random inspections by registration and tax authorities, as the business is subject to oversight by various regulatory bodies.
3. Compatibility with Proposed Business Activities
The chosen location must meet specific operational and legal conditions associated with the planned business activities, especially for conditional business lines. For example:
- Hospitality businesses must select a spacious location suitable for setup and decoration while meeting environmental and fire safety standards.
- Manufacturing businesses with foreign investment may need to operate in designated industrial zones, technology parks, or export-processing zones that align with their industries.
>>> More information at REGULATIONS ON INVESTMENT CAPITAL FOR FOREIGN COMPANIES ESTABLISHING BUSINESSES IN VIETNAM
4. Additional Considerations for Choosing a Business Registration Location
Beyond the above factors, individuals and organizations should consider the following when selecting a business registration location:
- Geographical location: The location should meet business needs, attract potential customers, and support planned activities.
- Competitiveness: Assess the competition in the surrounding area, particularly from businesses in the same industry, to ensure growth opportunities.
- Rental costs and related expenses: Ensure that the rent fits the budget and aligns with expected revenue. Also, account for costs related to repairs, decoration, equipment installation, and infrastructure maintenance to avoid unexpected expenses.
- Security and amenities: Opt for a location with good security, a clean environment, and adequate infrastructure to support business operations.
These factors will help ensure the chosen location contributes to the success and sustainable development of the enterprise.
Choosing a business registration location is a strategic decision that directly impacts operational efficiency, brand reputation, and growth potential. Investors should dedicate time to thoroughly research legal requirements, regulations, and procedures to ensure compliance and alignment with their business goals.
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