Enterprises in Vietnam are free to do business in sectors not prohibited by law, but must carry out necessary procedures to limit risks.

Legal grounds:

• Enterprise Law 2020;
• Decree No. 122/2021/ND-CP;
• Circular 78/2014/TT-BTC dated 22/06/2015;
• Dispatch No. 1387/TCT-KK dated April 14, 2015 of the General Department of Taxation.

We get the following questions:

My company has just signed a contract for the rental of a conference venue. But the company does not have a business registration in the real estate line or event organization. I want to ask if I have signed the contract so I still want to do it? Is the invoice company fined?

1. Obligation to notify business lines

The Enterprise Law 2020 stipulates the obligations of enterprises when there is a change in business lines as follows:

Article 31. Notice of change of enterprise registration contents

1. An enterprise must notify the business registration agency when it changes one of the following contents:
   1. Line of business;
   2. Founding shareholders and shareholders being foreign investors, for joint-stock companies, except for listed companies;
   3. Other contents in the enterprise registration dossier.
2. Enterprises are responsible for notifying changes to business registration contents within 10 days from the date of change.

According to the above regulations, if an enterprise has a new line of business, it must carry out the procedures for notifying the change of business registration information within 10 days from the date of change.

In case of violation, they will be forced to make a notification and be administratively sanctioned according to the provisions of Article 49 of Decree No. 122/2021/ND-CP with the following levels:

1. A warning for violations of the time limit for notification of changes in business registration information is from 1 day to 10 days.
2. A fine ranging from VND 3,000,000 to VND 5,000,000 shall be imposed for violating the time limit for notification of changes in business registration information from 11 days to 30 days.
3. A fine ranging from VND 5,000,000 to VND 10,000,000 shall be imposed for violating the time limit for notification of changes in business registration information from 31 days to 90 days.
4. A fine ranging from VND 10,000,000 to VND 20,000,000 shall be imposed for violations of the time limit for notification of changes in business registration information from 91 days or more.
5. A fine ranging from VND 20,000,000 to VND 30,000,000 shall be imposed for failing to notify changes in business registration information as prescribed.

2. Issue invoices of unannounced business lines

In principle, enterprises that sell goods and provide services must issue invoices according to regulations.

Pursuant to Article 7 of Decree No. 78/2014/TT-BTC, income from activities other than the business lines stated in the enterprise’s business registration is considered other income.

In addition, Dispatch No. 1387/TCT-KK dated April 14, 2015 of the General Department of Taxation has the following guidance:

In case Vinkems Co., Ltd. conducts business in a business line that is not in the line of business specified in the business registration certificate, it is recommended to the Tax Department of Tay Ninh province to check and determine if the business line of the Company is not must be a conditional business line or a business that is prohibited from doing business, agree with the proposal in Official Dispatch No. 297/CT-TTr dated January 26, 2015 of the Tax Department of Tay Ninh Province, specifically: accept the declaration of input VAT for business activities that are not in the lines and trades stated in the business registration certificate of Vinkems Co., Ltd. The Tax Department of Tay Ninh province guides the Company to supplement industries and trades according to regulations.

Thus, it can be understood that invoices for business activities that have not been registered for business are still accepted if these invoices fully meet the conditions of tax law.