Sub-licenses are a common term in business, but not everyone fully understands their legal nature and the list of industries that require this type of license. This article will provide a comprehensive overview of sub-licenses, application procedures, and important considerations for businesses to operate legally.
Understanding sub-licenses in business operations correctly.
In formal legal terminology, there is no document that directly defines the term "sub-license." It is essentially a common term used by the business community and lawyers to refer to certificates, confirmations, or approvals issued by competent state authorities to businesses that meet specific business conditions.
The essence of a sub-license is the concretization of business conditions. While the business registration certificate is the legal basis for a business to be established and enter the market, a sub-license is a mandatory condition for a business to operate in sectors that directly impact health, security, or social order.
The biggest difference between these two types of licenses lies in the timing and purpose of issuance. A business license is issued by the Department of Planning and Investment to certify legal entity status, while sub-licenses are issued by specialized ministries and agencies after assessing the actual conditions regarding facilities, personnel, or registered capital. This system exists to help the State control risks and ensure service quality in sensitive industries.
Legal basis governing sub-licenses
To fully understand the regulations regarding business conditions, enterprises need to refer to the current legal framework. Strict adherence to the law not only ensures stable business operations but also helps avoid unnecessary legal risks. Key legal documents include:
- Investment Law 2020 and Appendix IV on the List of Conditional Business Sectors.
- The 2020 Enterprise Law and its implementing decrees on enterprise registration.
- Specialized decrees provide detailed guidance on business conditions for each specific sector.
- Circulars issued by the relevant ministries regulate technical standards and licensing procedures.
The core principle is that business conditions must be stipulated in laws, decrees, or international treaties to which Vietnam is a signatory. Ministries, ministerial-level agencies, and local governments are not allowed to arbitrarily issue new regulations on business conditions in the form of official letters or administrative decisions to avoid creating barriers for businesses.
Distinguishing between business conditions and sub-licenses
A common mistake is assuming that all business conditions must be documented with a paper certificate called a license. In reality, the law stipulates different forms of business conditions:
- A business license is the most common form, requiring businesses to submit an application and obtain official authorization from the competent authority before commencing operations.
- A certificate of eligibility is a document confirming that a business has met safety, hygiene, or technical standards.
- Personnel or capital requirements may necessitate a business having professional certifications or a deposit of capital, but a separate license for that particular business activity may not be required.
- Conditions under the commitment form require businesses to independently improve the standards and notify the regulatory authority, without necessarily waiting for prior approval.
Classification of sub-licenses according to areas of state management
Depending on their field of activity, businesses will need to interact with different regulatory bodies. For a better understanding of specific cases, please refer to the details below. sub-licenses. Below is a classification of the most common types of sub-licenses currently in use:
Education and Training Group
The education sector is always subject to strict regulations regarding curriculum and personnel competence. Common types of licenses include:
- The requirements for establishing a foreign language and computer training center include requirements for available space and the professional qualifications of the teachers.
- License to operate a life skills education facility and extracurricular educational activities.
- Regulations governing the business of study abroad consulting services specify the minimum deposit amount and the foreign language proficiency of consulting staff.
Health and Food Group
This is a sector that directly impacts human health, so the evaluation process is usually very rigorous:
- Certificate of food safety compliance for restaurants and food processing and packaging facilities.
- A license is required to register food products, cosmetics, and dietary supplements before they can be released onto the market.
- Operating licenses for private clinics and pharmacies include requirements for minimum area and professional certifications for those responsible for professional matters.
Transportation and Logistics Group
To ensure traffic safety and transparency in transportation operations, businesses need to take note of the following:
- A business license for transportation by motor vehicle for units transporting passengers or goods.
- Truck and contract vehicle badges must be affixed to the vehicles in accordance with regulations of the Ministry of Transport.
- Conditions for conducting multimodal transport business for enterprises operating international logistics services.
Security and Order Protection Team
Occupations that are sensitive in terms of social order will be directly managed by the Ministry of Public Security.
- Certificate of eligibility regarding security and order for accommodation establishments, pawn shops, and security services.
- Security guard certificates are issued to employees by the competent police authority after they complete their training.
- Regulations concerning the business of assistive devices and priority signaling equipment.
Finance and Professional Services Group
High academic standards and financial transparency are characteristic of this group:
- License for securities trading and investment fund management.
- Professional accounting and auditing certifications for individuals and organizations providing professional services.
- A business license for tax agency services allows the agency to represent taxpayers in carrying out administrative procedures.
Legal risks arising from misunderstanding sub-licenses.
Many business owners mistakenly believe that simply having a business registration certificate is enough to start operating. This is a mistake that can lead to unfortunate legal consequences.
- Conducting business before obtaining a formal license may be considered illegal business activity, leading to suspension of operations.
- Confusion between business conditions and registration procedures slows down the actual project implementation.
- Continuing business operations after a sub-license has expired without timely renewal will result in penalties according to specialized regulations.
Failure to comply with regulations regarding sub-licenses may result in penalties such as fines, temporary suspension of operations, or being forced to cease business in that sector.
List of conditional business sectors according to the Investment Law
According to the latest update from the national business registration portal, the system of business conditions has been streamlined. Below is a summary table of some typical industry groups:
| Industry Group | Typical License Type/Condition | Licensing authority |
|---|---|---|
| Alcohol and tobacco production | Production, wholesale, and retail licenses | Ministry of Industry and Trade/Department of Industry and Trade |
| Travel business | Domestic/International Travel Business License | Tourism Department/Tourism Office |
| Karaoke and nightclub businesses | Eligible business license | Department of Culture and Sports |
| Pawnshop services | Certificate of security and order | District/County Police Department |
Note: The table above only lists some of the most common business sectors for reference. The complete list currently includes over 200 business sectors, detailed in Appendix IV of the 2020 Investment Law and its amendments.
Businesses can look up the official list themselves through the National Business Registration Portal. An important point to remember is that not all conditional business sectors require written licenses; some only require meeting financial or personnel requirements and fulfilling commitments in accordance with regulations.
Typical process for obtaining sub-licenses for businesses.
To optimize time and costs, businesses should follow a standardized process that includes the following steps:
- Step 1: Identify the industry code and compare it specifically with the corresponding list of business conditions.
- Step 2: Prepare the legal documents in accordance with specialized regulations, including the application form, business plan, and company profile.
- Step 3: Submit your application online through the National Public Service Portal or submit it directly to the relevant specialized agency.
- Step 4: On-site assessment and review of documents by the competent authorities.
- Step 5: Receive the result, which is the sub-license or official approval document.
- Step 6: Disclose information and maintain the conditions throughout the actual operation.
Current situation and changes in the management of sub-licenses
Recently, the government has been accelerating administrative reforms to create the most favorable business environment for the business community:
- Promote the reduction and simplification of business conditions by abolishing procedures that are no longer relevant to current practices.
- A radical shift from pre-auditing to post-auditing means creating conditions for businesses to operate based on commitments and strengthening post-audits.
- Eliminate the distorted forms of sub-licenses by standardizing operational guidance documents.
- Strengthen penalties for fraudulent business practices or those that fail to meet safety and environmental hygiene standards.
Strengthening post-market surveillance helps businesses enter the market more quickly, but it also demands greater self-discipline and compliance with the law from regulators.
Services for obtaining sub-licenses and things to consider when choosing one.
For areas with complex procedures, businesses often seek professional consulting firms to ensure accuracy and timeliness.
- The benefits of consulting services include saving businesses time and manpower, and minimizing the risk of application rejection.
- Verify the credibility of the consulting firm through its professional operating license and feedback from businesses that have used its services.
- The coordination process needs to ensure transparency regarding fees, processing times, and the responsibilities of each party during implementation.
- Absolutely do not use licensing services that do not follow proper procedures or show signs of forged documents, as the legal consequences for businesses are extremely serious.
Frequently Asked Questions about Sub-licenses
Below are answers to the most common questions businesses have when researching business conditions:
Will a business registration be revoked if it lacks the necessary sub-licenses?
Can sub-licenses be transferred or leased?
How can I quickly check if my business requires any sub-licenses?
What are the official costs and typical consulting service fees?
Conclude
Mastering regulations regarding sub-licenses not only helps businesses avoid legal risks but also serves as a passport to establishing credibility in the market. In the digital economy era of 2026, transparency and legal compliance are key factors for sustainable business development. Businesses need to proactively update themselves on changes in legal documents to ensure smooth business operations and achieve greater success.
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Content production is overseen by: Mr. Le Hoang Tuyen – Founder & CEO of MAN – Master Accountant Network, CPA Vietnam with over 30 years of experience in accounting, auditing, and financial consulting.
