After completing procedures for establishing the enterprise and investment project, a company is recognized as an independent business entity that possesses the rights and obligations prescribed by Law and is allowed to operate in the registered fields. However, although the company has the right to do business in the fields that are not prohibited by Law, some industries require specific conditions prescribed by Law to apply for licenses and certifications related to their conditional business lines. In this article, we shall explain what a sublicense means and when it is needed.
1. What does a sublicense mean?
1.1 Definition
Currently, Vietnamese law does not exclusively define “sublicense”. However, in ordinary business and investment activities, a sublicense is understood as a general document such as a certificate, business license, etc., to record that the enterprise has met the specific conditions and is eligible to conduct business in that sector.
1.2 Types of sublicense
Sublicenses are expressed in various terminologies, including but not limited to license, certificate, written confirmation, approval, decision, etc.
Example:
- Security Services business – Certificate of satisfaction of security and order conditions
- International travel service business – International travel business license
- Restaurant business – Minutes of fire prevention inspection
- Manufacture of cosmetics – Announcement of product registration circulation
- Kindergarten – Decision to allow the establishment of a school.
2. When is a sublicense needed?
For conditional business lines, investors must satisfy the conditions laid down by Law on Investment. As mentioned in section 1.1, conditional investment and business lines are industries and trading sectors the investment in which must satisfy necessary conditions for reasons of national defense, national security, social order and safety, social ethics, and community health. Investors are entitled to conduct business in the conditional investment and business lines specified in Appendix IV of the law on investment once they fully meet the conditions and ensure compliance with the same during their operation in business.
However, please note that not all conditional business lines are required to have a sublicense. The Law on Investment stipulates that investors who meet the conditions for business investment are granted documents through the forms mentioned in Section 1.2, or are entitled to conduct business activities when they meet such requirements for doing business without having to be certified in writing by a competent authority. Thus, those operating in conditional business lines need to apply for a sublicense. Special laws require companies operating in those fields to carry out licensing procedures with written forms for obtaining documents (mentioned in 1.2 of this article).
3. Competence, application, processing time and results of the application
3.1 Competence
According to Clause 8, Article 7 of Decree 01/2021, the state manages foreign investment in conditional business lines, and inspects the compliance of enterprises with business conditions under the competence of specialized agencies in accordance with special laws.
Accordingly, each business line will be under the management of at least one state agency. Therefore, monitoring compliance with business conditions, examination of applications and approval for each type of sublicense will be done by different agencies. Hence, each sublicense is issued by a different authority depending upon its field of management.
Example:
- International travel business license – issued by the ‘Department of Culture, Sports and Tourism’;
- License to manufacture veterinary drugs – issued by the ‘Department of Animal Health, Ministry of Health’;
- Wholesale and retail alcohol license – issued by the ‘Department of Industry and Trade’;
- Vocational training license – issued by the ‘Department of Labor, War, Invalids and Social Affairs’
3.2 Application
As mentioned above, each business line comes under the management of a different agency. Similarly, the conditions to be met for each business line are different. Therefore, the applications for different sublicenses are also different.
However, an application for sublicense in Vietnam usually includes the following basic documents:
- Enterprise registration certificate and Investment registration certificate (if any).
- A written request for a sublicense. This document usually follows the form specified in Decrees, Circulars, and guidelines issued for such conditional business field.
- A written explanation on the satisfaction of business conditions in such conditional business lines. This document should be in the form of an explanatory statement or a project.
- Personal papers of managers and participants in conditional business activities, such as criminal records, degrees, health certificates, etc.
- Documents proving that the entity is meeting the conditions, such as: Certificate of capital contribution, confirmation of deposit, minutes of acceptance, etc.
- Other documents as prescribed by relevant laws.
3.3 Timeline
The timeline to get a sublicense depends on many factors. It could take from a few days up even a year.
In addition to factors directly related to the process like appraisal of documents and state agencies’ procedures, other factors could also affect the application for a sublicense. These factors include validity and completeness of the documents provided; whether fulfillment of conditions for the occupation applying for a license is guaranteed or not, labor related documents and fulfillment of other conditions in accordance with legal provisions.
Here are some examples of the expected time for actual sublicensing:
- Enterprise registration certificate and Investment registration certificate (if any).
- A written request for a sublicense. This document usually follows the form specified in Decrees, Circulars, and guidelines issued for such conditional business field.
- A written explanation on the satisfaction of business conditions in such conditional business lines. This document should be in the form of an explanatory statement or a project.
- Personal papers of managers and participants in conditional business activities, such as criminal records, degrees, health certificates, etc.
- Documents proving that the entity is meeting the conditions, such as: Certificate of capital contribution, confirmation of deposit, minutes of acceptance, etc.
- Other documents as prescribed by relevant laws.
3.4 Result
When all conditions for operation in the conditional business lines are met, the company is granted a sublicense in the forms mentioned in Section 1.2 of this article. The company will have the right to operate in such conditional business lines from the date of issuance of the sublicense or for the time specified in the sublicense. During operation, the company must pay attention to the additional regulations specified in Section 4 of this article and ensure that the conditions are met throughout the operation.
4. Additional regulations on sublicenses and operation in conditional business lines
- Enterprise registration certificate and Investment registration certificate (if any).
- A written request for a sublicense. This document usually follows the form specified in Decrees, Circulars, and guidelines issued for such conditional business field.
- A written explanation on the satisfaction of business conditions in such conditional business lines. This document should be in the form of an explanatory statement or a project.
- Personal papers of managers and participants in conditional business activities, such as criminal records, degrees, health certificates, etc.
- Documents proving that the entity is meeting the conditions, such as: Certificate of capital contribution, confirmation of deposit, minutes of acceptance, etc.
- Other documents as prescribed by relevant laws.
Hence, clients and companies operating in conditional business fields should refer to the above regulations and procedures related to sublicensing.
