Changing your business sector is a big decision, and it’s important to understand the procedures and costs involved. This guide will take you through the process of shifting your enterprise to a new and more challenging field.
1 What is a Business Sector Change?
According to the 2014 Enterprise Law, a business sector change is an administrative procedure that enterprises undertake when they want to add or remove business lines from their initial business registration. This confirmation of business sector changes is handled by the Department of Planning and Investment.
Changing business sectors involves adding or removing previously registered business lines.
Once the changes are made, the enterprise is only authorized to operate in the sectors confirmed by the Department of Planning and Investment.
For further reference:
2 Adding a Business Sector
Adding a business sector involves procedures that an enterprise must follow when it wants to expand its business operations by including one or more new business lines that were not registered before.
Adding a new business sector involves expanding the scope of operations.
The procedures are carried out at the Department of Planning and Investment, and after completion, the department will issue a certificate of business sector registration to the enterprise.
3 Procedures for Changing Business Sectors
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A common dossier for changing business sectors for joint-stock companies, multi-member limited liability companies, two-member limited liability companies, and partnership companies, etc.
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1 Notification of Enterprise Registration Content Change according to the prescribed form.
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1 Decision and a copy of the minutes of the meeting of the Council of Members clearly stating the content of the change in the Company Charter.
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1 Copy of documents: Investment Registration Certificate, Tax Registration Certificate, Supplementary Update Information of Enterprise Registration (if the enterprise has been granted these papers or equivalent documents)
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1 Power of Attorney (if an individual or organization authorizes another organization to act on its behalf)
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A certified copy of one of the personal identification papers of the authorized representative (if any)
Prepare the dossier and submit it to the National Business Registration Portal.
Once the dossier is complete, the enterprise will scan and submit it to the National Business Registration Portal.
Within 3 days of receiving the hard copy of the dossier, the Business Registration Office is responsible for evaluating the dossier’s content according to legal regulations.
If the dossier is valid, the hard copy must be submitted to the Business Registration Office of the Department of Planning and Investment where the company was established.
If the dossier is valid, the hard copy must be submitted to the Business Registration Office of the Department of Planning and Investment where the company was established.
4 Penalties for Failing to Notify Business Sector Changes
According to Article 32, Chapter II of the Enterprise Law, individuals or organizations that change their business sectors must notify the Business Registration Office of the Department of Planning and Investment where the company’s head office is located within 10 days (from the date of the change). Failure to do so within this period will result in administrative sanctions under Decree 50/2016/ND-CP.
Business sector changes must be reported to the Business Registration Office of the Department of Planning and Investment.
Specifically, the enterprise will be subject to the following penalties:
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If the deadline is missed by 01 – 30 days, the enterprise will receive a warning or be fined from VND 500,000 to VND 1,000,000
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If the deadline is missed by 31 – 90 days, the enterprise will be fined from VND 1,000,000 to VND 2,000,000
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If the deadline is missed by more than 91 days, the enterprise will be fined from VND 2,000,000 to VND 5,000,000
According to the above regulations, the Business Registration Office of the Department of Planning and Investment has 3 working days from the date of receiving the dossier to review and evaluate its validity.
If the dossier is invalid, the Business Registration Office will notify the enterprise of the necessary corrections or additions, and the enterprise must complete and resubmit the dossier within 3 working days.
5 Costs of Changing Business Sectors
The total cost of changing business sectors is VND 300,000.
Based on Article 33 of the Enterprise Law and Article 55 of Decree No. 78/2015/ND-CP, the cases in which enterprises must pay the fee for publishing the enterprise registration content include:
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Registering the establishment of an enterprise
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Registering changes to the Enterprise Registration Certificate
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Notifying changes to the enterprise registration content related to business lines, founding shareholders, and foreign shareholders
The total fee that enterprises must pay when announcing changes in business sectors on the National Portal – Department of Planning and Investment is VND 300,000.
6 Notes on Changing Business Sectors
To ensure a smoother process when changing business sectors, enterprises should pay attention to the following issues:
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Be clear about whether the changed or added business sector belongs to the list of conditional business sectors and understand the business conditions.
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Enterprises must encode the desired business sector change to the level 4 business sector according to the Vietnamese economic sector system.
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For sectors that require statutory capital, when changing or adding business sectors, enterprises need to adjust their capital to meet the conditions.
Notes on changing business sectors.
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For business sectors that require a practice certificate: Enterprises must ensure that they have the necessary practice certificates during their operation (if not a member company, submit an employment contract and a decision on the appointment of the corresponding position)
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For changes or additions to conditional business sectors that require a license to meet business conditions, enterprises must obtain the license before doing business.
For further reference:
The above are the procedures for changing business sectors that enterprises need to be aware of. Hopefully, this information will help enterprises that intend to change their business sectors to do so quickly and smoothly.
