Benefits of converting from a household business to an enterprise

1. Exemption or reduction of any taxes, fees, and charges:

🔰 Exemption of business registration fee and first-time business information provision fee;

🔰 Exemption of appraisal, fees, and charges for the first-time business license for conditional business lines;

🔰 Exemption of license fees for a period of 03 years from the date of being granted the first business registration certificate.

🔰  Exemption and reduction of land use fees for a period of time in accordance with the law on land.

2. Having legal status:

✔ According to the provisions of Clause 3, Article 2 of Circular 39/2016/TT-NHNN, borrowers at banks are legal entities and individuals. Meanwhile, business households do not have legal status, so this is a limitation for business households when they want to borrow capital from banks to serve production and business activities.

✔ Meanwhile, businesses (except private enterprises) have legal status and have the right to make loan transactions at banks.

3. Hiring many employees:

⏩ Decree 78/2015/ND-CP stipulates that business households employing ten or more employees must register for business establishment according to regulations. This means that the law only accepts business households with 9 employees or less. Therefore, if you want to hire more workers to expand your business, household businesses will be an offense

⏩ With the business model, the current law does not limit the number of employees in the enterprise.

4. Advantages of scaling:

▪️ Enterprises are not limited in size, capital, and business location.

▪️ The production and business are methodical and orderly. There is a specific organizational structure and activities.

5. Issuing VAT Invoices to customers and paying CIT according to profits

✅  Enterprises are allowed to issue VAT invoices to customers for VAT deduction.

✅  Enterprise pays CIT on profits after deducting expenses.

6. To open many branches and representative offices; When the business loses, the provisions of the Bankruptcy Law apply…

Especially when business households transform into enterprises, they also enjoy a lot of support policies from the State:

➥ Exemption of charge for first-time business registration, free of charge for publishing contents of first-time business registration;

➥ Exemption of license fees for a period of 03 years from the date of the first issuance of the Business Registration Certificate;

➥ Exemption of appraisal and fee for a first-time business license for conditional business lines;

➥ Small and medium-sized enterprises converted from household businesses to continue conducting production and business activities in conditional business lines without changing their size, it is necessary to submit an application to the competent state management agency for the re-issuance of the license.    

➥ Get free advice, guidance, and support in drafting business establishment documents;

➥ To receive free advice and guidance on tax administrative procedures and accounting regimes within 3 years from the date of the first issuance of the Business Registration Certificate;

➥ Exemption and reduction of corporate income tax for a definite period in accordance with the law on corporate income tax;

➥ Exemption and reduction of land use fees for a period of time in accordance with the law on land.

Conditions for support:

➥ Before establishing an enterprise, the business household must have registered and operated in accordance with the law.

➥ The business household has had production and business activities continuously for at least 01 years up to the date of the first issuance of the Business Registration Certificate.

Profile to get support:

⚜️  A copy of the business registration certificate of the household business;

⚜️  Copy of Tax Code Registration Certificate;

⚜️  Copy of license fee payment voucher, taxes and state budget payment (if any), tax declaration within 01 years before conversion.

⇒ If you have any questions, please register here for TASCO's earliest advice or contact the hotline: 0975480868 (Zalo)

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