According to Resolution No. 58/NQ-CP dated April 21st, 2023, on some key solutions to and policies on support of enterprises in flexible adaptation, rapid recovery and sustainable development towards 2025, one of the key objectives set by the Government is to convert from 8,000 to 10,000 household businesses into enterprises, under a policy of encouragement rather than compulsion.
In light of this policy, many household businesses – at present and potentially in the future – are experiencing the need to convert their operational model into enterprises. However, one of the biggest obstacles in this process lies in the complexity of administrative procedures, especially in the context of a streamlined state administrative apparatus, the transition of local governments to a two-tier model, and changes in administrative boundaries.
In addition, the milestone date of July 1st, 2025 – when various new legislative documents take effect – creates pressure for simultaneous changes, requiring household businesses to promptly adapt if they wish to convert successfully. One such legislative document is Decree No. 168/2025/ND-CP on enterprise registration, which was promulgated on June 30th, 2025, and comes into force on July 1st, 2025 (hereinafter referred to as “Decree 168/2025/ND-CP”), replacing Decree No. 01/2021/ND-CP and Decree No. 122/2020/ND-CP.
Within the scope of this article, the author will focus on analyzing and comparing a notable new provision regarding the registration of conversion from household business into enterprise as prescribed in Article 27 of Decree 168/2025/ND-CP, with the corresponding provision in Article 27 of Decree 01/2021/ND-CP (now expired).
1. Provisions on the composition of the application dossier for the registration of conversion from household business into enterprise:
According to Clause 2, Article 27 of Decree No. 168/2025/ND-CP, a household business applying for enterprise registration must submit the following documents:
– The copy certificate of household business registration; and
– The documents specified in Articles 24 of Decree No. 168/2025/ND-CP corresponding to each enterprise type but excludes the investment registration certificate;
– The written approval given by the investment registration authority for capital contribution or purchase of shares/stakes by such foreign investors/foreign-invested business entities. (If applicable)7
It can be observed that Decree No. 168/2025/ND-CP does not require household businesses to submit the original Certificate of Household Business Registration, as previously prescribed. More notably, household businesses are also no longer required to submit a copy of the Tax Registration Certificate when carrying out this procedure, in contrast to the corresponding provision under Article 27 of Decree No. 01/2021/ND-CP.
This change can be attributed to the implementation of the “interlinked single-window system” for household businesses under Law on Tax administration 2019 and Circular No. 86/2024/TT-BTC. Accordingly, the business code of a household business is now automatically generated by the National Enterprise Registration System, and also serves as its tax code. In practice, household businesses are issued only the Certificate of Household Business Registration and are not required to directly register with the tax authority or obtain a separate Tax Registration Certificate (in cases where direct registration with the tax authority is not required under Circular No. 86/2024/TT-BTC). Decree No. 168/2025/ND-CP also expressly recognizes the uniformity of the two codes and this principle is reflected in the legal provisions relating to household businesses and household business registration. For this reason, the submission of a copy of the Tax Registration Certificate is no longer necessary.
2. Regulations on the process of shutdown of household business operations when registering the conversion into an enterprise:
According to Clause 3 Article 27 of Decree No. 168/2025/ND-CP, when a household business submits an application for registration of conversion into an enterprise, the competent authorities will carry out the legal shutdown of such household business according to the following process:
Phase 1. Issuance of the Enterprise Registration Certificate to the household business
Upon registration of conversion from household business into enterprise as prescribed in Article 27 of Decree No. 168/2025/ND-CP, the provincial-level business registration authorities where the enterprise intends to locate its head office (hereinafter referred to as the “Provincial-level Business Registration Authority”) shall receive, process and settle the application in accordance with such Decree.
If the application is valid and meets the licensing conditions, the Provincial-level Business Registration Authority shall issue the Enterprise Registration Certificate to the household business and concurrently notify relevant competent authorities to initiate the process of shutdown of the household business.
Phase 2. Notification to the commune-level business registration authority where the household business is located (hereinafter referred to as the “Commune-level Business Registration Authority”)
Within 02 working days from the date of issuance of the Enterprise Registration Certificate, the Provincial-level Business Registration Authority shall send information about the establishment of the converted enterprise to the Commune-level Business Registration Authority where the household business is located.
Phase 3. Notification to the tax authority managing the household business
The Commune-level Business Registration Authority shall notify the tax authority of the household business and publish an announcement on the National Business Registration Portal regarding the household business being in the process of shutdown, and update its legal status as “undergoing shutdown procedure.”.
Phase 4. Notification back to the Commune-level Business Registration Authority and formal termination of the household business
The tax authority shall notify the Commune-level Business Registration Authority once the household business has fulfilled its tax obligations. Within 03 working days from the date of receipt of such information, the Commune-level Business Registration Authority shall update the legal status of the household business to “shutdown” in the household business registration database.
It can be observed that Clause 3, Article 27 of Decree No. 01/2021/ND-CP previously only stipulated a simplified mechanism for processing household business termination, as follows: “Within 02 working days from the date of issue of the enterprise registration certificate, the Business Registration Office shall send the copy of the enterprise registration certificate and original certificate of household business registration to the business registration authority of district where the household business is located for completing procedures for shutdown of the household business.” Compared to the previous regulation, the new Decree sets out a detailed and specific process for the shutdown of household business operations to be carried out by the competent authorities, relieving household businesses from having to perform these steps themselves, except for the obligation to fulfill their tax liabilities with the tax authority.
Once the household business registration database records that the household business has been shutdown, the household business shall no longer be allowed to operate from the date on which the converted enterprise is issued the Enterprise Registration Certificate.8
3. Notable points when registering the conversion of a household business into an enterprise
3.1. Is the household business required to amend its business registration due to administrative boundary changes or the entry into force of Decree No. 168/2025/ND-CP before proceeding with the enterprise registration?
Regarding the update of administrative boundaries: In case the change of administrative boundaries leads to a change in the address of the household business’s head office, the household business may continue its operation under the granted Household Business Registration Certificate without being required to carry out procedures for change of address.9
Regarding changes due to the entry into force of Decree No. 168/2025/ND-CP: Household businesses that were granted a Business Registration Certificate or Household Business Registration Certificate before the effective date of Decree No. 168/2025/ND-CP may continue their operations under the contents of those certificates.10 Household Business Registration Certificates that use information from the national ID card or citizen ID card of the household business owner or household members shall remain valid. 11 Accordingly, the law still recognizes the legal validity of the Household Business Registration Certificate, and certain contents that do not affect its legal validity will continue to remain effective and be subject to transitional provisions under Decree No. 168/2025/ND-CP without requiring new issuance or amendments.
Therefore, amendments shall only be made upon the household business’s own request or when it voluntarily applies for changes to its registration. However, except for cases where substantial changes necessitate the amendment of household business registration before applying for enterprise registration, the household business may update or change its information at the time of enterprise registration. This approach would help save time and costs and facilitate a quicker transition from household business to enterprise.
3.2. What key information should a household business pay attention to when filling in forms under the new legal framework during enterprise registration?
As mentioned in Section 3.1, when completing the registration forms, household businesses should ensure that the declared information complies with the new legal regulations, especially in relation to: the administrative boundaries for the enterprise’s head office address, contact address of the legal representative, and owner who is an individual (if applicable), etc.
Declaration of the identification number of individuals listed in the enterprise registration dossier is required. In the absence of such an identification number, the application must be accompanied by copies of corresponding legal documents for each individual.12
Declaration of the beneficial owner(s) must also be made in accordance with Article 17 and 18 of Decree No. 168/2025/ND-CP.
The above analysis is based on the legal provisions in force at the time of writing. As legal regulations may change in the future, you are advised to recheck the latest laws and regulations accordingly.
(7) Clause 2, Article 27, Decree No. 168/2025/ND-CP, in case an enterprise converted from a household business involves foreign investors or foreign-invested business entities contributing capital or purchasing shares/stakes and such activities are subject to capital contribution or purchase of share/stake registration procedures under the Law on Investment.
(8) Clause 4, Article 27, Decree No. 168/2025/ND-CP
(9) Clause 3, Article 101, Decree No. 168/2025/ND-CP
(10) Clause 1, Article 123, Decree No. 168/2025/ND-CP
(11) Clause 6, Article 123, Decree No. 168/2025/ND-CP
(12) Article 11, Decree No. 168/2025/ND-CP
Date written: 20/07/2025
Disclaimers:
This article is for general information purposes only and is not intended to provide any legal advice for any particular case. The legal provisions referenced in the content are in effect at the time of publication but may have expired at the time you read the content. We therefore advise that you always consult a professional consultant before applying any content.
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