“After completing the procedures for establishing the enterprise and investment project, the company is recognized as an independent business entity and 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 sub-license means and when it is needed.”
Currently, Vietnamese law does not exclusively define “sub-license”. However, in ordinary business and investment activities, sub-license is understood as a general documents such as certificate, business licenses, etc., to record that the enterprise has met the specific conditions and is eligible to conduct business in that sector.
Sub-licenses are expressed in various terminologies, including but not limited to license, certificate, written confirmation, approval, decision, etc.
Example:
According to the law on investment, for conditional business lines, investors must satisfy the conditions laid down by law. 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 sub-license. 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 sub-license. Special laws require companies operating in those fields to carry out licensing procedures with written forms for obtaining documents mentioned in 1.2 0f this article.
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 one, or several different competent state agencies. Therefore, monitoring compliance with business conditions, examination of applications and approval for each type of sub-license will be done by difference agencies. Hence each sub-license is issued by a different authority depending upon its field of management.
Example:
As mentioned above, each business line comes under the management of different agency. Similarly, the conditions to be met for each business line are different. Therefore, the applications for different sub-licenses are also different.
However, an application for sub-license in Vietnam usually includes the following basic documents:
The timeline to get a sub-license depends on many factors. It could take a few days or up to several months, and 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 sub-license. 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 the provisions of law.
Here are some examples of the expected time for actual sublicensing:
When all conditions for operation in the conditional business lines are met, the company is granted a sub-license 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 sub-license or for the time specified in the sub-license. 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.
Hence, clients and companies operating in conditional business fields may refer to the above regulations and procedures related to sub-licensing.
The article is based on the current law at the time of recording as above and may no longer be relevant at the time readers access this article due to changes in applicable law and specific cases that the reader wants to apply. Therefore, the article is for reference only.
We would be delighted to schedule a meeting to provide you with an effective solution.