Distinguishing between a business license and business registration

When launching a business, the Business License is always a top concern. However, a misunderstanding of this concept can lead not only to errors during administrative procedures but also exposes the enterprise to future legal risks—specifically regarding the confusion between the right to conduct business and trademark ownership rights.

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The following article, compiled by experts at Tran & Tran Intellectual Property Company Limited, provides an accurate legal perspective to help businesses clearly distinguish between types of licenses and correctly understand the scope of intellectual property protection from the very first day of establishment.

Conditions for Legal Business Start-up

In the legal context of 2025, which includes many changes—notably the introduction of Decree 168/2025/ND-CP (effective from July 1, 2025), replacing old regulations on enterprise registration—compliance with business registration regulations is a mandatory foundation for sustainable operation. Operating without completing the necessary legal procedures can lead to serious administrative sanctions, suspension of operations, or avoidable legal disputes.

What is a Business License? Distinguishing Between Enterprise Registration and Business Licenses

In practice, the term “Business License” is often used to refer generally to legal documents required when opening a company. However, the Law on Enterprises 2020 and the Law on Investment 2020 clearly distinguish between two types of documents with completely different legal natures:

1. Enterprise Registration Certificate (ERC)

Nature: The Enterprise Registration Certificate (ERC) is a document recording enterprise registration information issued by the Business Registration Office. This is the legal basis recording the birth of a legal entity.
Subject: Every economic organization must undergo this procedure at the Department of Planning and Investment upon establishment.
Significance: The State recognizes the legal entity status of the enterprise. However, this certificate does not mean the enterprise has the right to conduct business in all sectors, especially conditional business lines.

2. Business License (Sub-license/Operating License)

Nature: A Business License (often called a Sub-license) is a document permitting an enterprise to operate in conditional business investment sectors as prescribed by the Law on Investment.
Issuance Time: Granted after the enterprise has obtained the ERC and met all conditions regarding facilities, personnel, security, and order, etc.
Examples:
- License for Foreign Language Center Operation (Issued by the Department of Education & Training).
- Transport Business License (Issued by the Department of Transport).
- Certificate of Food Safety Eligibility (for restaurants, food production facilities).

Quick Comparison Table:

Criteria	Enterprise Registration Certificate (ERC)	Business License (Sub-license)
Nature	The “Birth Certificate” of the enterprise	The “Passport” to operate in conditional sectors
Condition	Valid administrative dossier	Actual conditions met (facilities, personnel…)
Issuing Authority	Department of Planning & Investment (Business Registration Office)	Specialized Department (Health, Industry & Trade, Education…)
Validity	Usually indefinite	Definite term (3 – 5 – 10 years depending on type)

Cases Requiring a Business License

Not everyone opening a company needs a “Sub-license.” Depending on the industry code you register, the law divides businesses into two groups:

Group 1: Only Enterprise Registration Certificate Required

For ordinary business lines (trade, consulting, non-conditional services…), you only need to complete the company incorporation step to issue invoices and operate immediately.

Examples: Online clothing sales, Website design companies, Marketing consulting services…

Group 2: Business License (Sub-license) Mandatorily Required

According to the Law on Investment, there are currently over 200 conditional business investment lines. Below are common groups that Tran & Tran’s clients often encounter:

F&B Group (Restaurants, Eateries, Food Production): Must have a Certificate of Food Safety Eligibility.
Education & Training Group: Foreign language centers, IT centers, life skills, study abroad consulting. Requires a License for Educational Operation.
Health & Beauty Group: Clinics, Pharmacies (GPP), Spas (invasive/massage), Beauty Clinics. Requires an Operating License for medical examination/treatment or a Certificate of Security and Order (for massage).
Transport & Tourism Group: Auto transport business (Transport License), Domestic/International Travel Business (Travel License).
Retail for FDI Enterprises: Foreign-invested companies wishing to retail goods in Vietnam must apply for a Trading License and a License to Set Up a Retail Establishment under Decree 09/2018/ND-CP (and proposed amendments/replacements).

Conditions for Granting a Business License

Unlike company incorporation (which only requires paper declarations), applying for a sub-license requires the enterprise to meet actual conditions. Tran & Tran has summarized 4 core groups of conditions you need to prepare:

Facilities Conditions:State agencies will conduct an on-site inspection.
- Example: Restaurants must have a one-way kitchen rule; Foreign language centers must ensure classroom size, lighting, and teaching equipment; Spas must ensure sanitary conditions and separate spaces.
Personnel Conditions:The head of the entity or employees must have appropriate practice certificates.
- Example: The Director of a foreign language center must have a university degree in foreign languages (or equivalent) and management experience; Teachers must have appropriate pedagogical degrees. Doctors named for a clinic/Spa must have a practice certificate and 36-54 months of practical experience.
Capital Conditions (Legal Capital):Some industries require the enterprise to make a deposit or prove capital.
- Example: International travel business (bank deposit), Security service business (legal capital of 2 billion VND), Multi-level marketing…
Security, Order & Fire Prevention Conditions:Especially important for industries like Karaoke, Hotels, Spas, Pawnshops. You must have minutes of Fire Prevention inspection and a Certificate of Security and Order (ANTT) before operating.

Process and Procedures for Applying for a Business License

The process below is updated according to the latest Decree 168/2025/ND-CP, applicable from July 1, 2025.

Step 1: Establishment of Enterprise/Business Household

Dossier: Application for enterprise registration, Company Charter, List of members/shareholders, Copies of legal documents (ID Card/Passport).
New in 2025: Enhanced electronic authentication and data interconnection. Enterprises can simultaneously perform procedures to change and update registration content.
Submission: Business Registration Office – Department of Planning and Investment (or online via the National Information Portal).

Step 2: Preparing the Dossier for Sub-license (Industry-dependent)

This is the most complex step; each industry has its own set of documents.

Example (Food Safety for Restaurants): Application form, Explanation of facilities, Certificate of food safety knowledge of the owner and employees, Health check cards.

Step 3: Submission and On-site Appraisal (The Decisive Step)

The enterprise submits the dossier to the specialized agency (e.g., Foreign language centers submit to the Department of Education & Training; Pharmacies submit to the Department of Health).
Appraisal: An inspection team will visit the facility to verify if the reality matches the dossier description. This is where many businesses fail due to setup not meeting standards.
Tran & Tran’s Role: We do not just draft documents; we dispatch specialists to consult on the facility setup before the inspection team arrives, ensuring a license approval rate of up to 99%.

Step 4: Receiving the License and Commencing Operation

After the appraisal meets requirements, the state agency will issue the License (usually within 15-30 working days depending on the type).

Cost and Time for Business Licensing

Regarding Time

Company Incorporation: Very fast, only 3-5 working days by law.
Sub-license Application: Lasts from 15 days to 02 months (or longer if the dossier is flawed or facilities are substandard).
- Food Safety License: ~20-30 days.
- Foreign Language Center License: ~30-45 days.
- FDI Retail License: Can take 2-4 months due to consultation with multiple ministries (for specific cases).

Regarding Costs

Includes:

State fees (with receipts).
Dossier preparation, printing, and travel fees.
Facility appraisal fees (if any).
All-inclusive Legal Service Fee: This is a smart investment to save time and avoid the risk of penalties.

Penalties for Violations

Operating without a license (or operating in a conditional industry without a sub-license) is a serious violation of the law.

According to Decree 122/2021/ND-CP (and amending documents being considered for issuance in 2025 to align with the new Law on Handling of Administrative Violations), penalties are severe:

Fine of 10,000,000 VND to 20,000,000 VND for failure to register changes to the Enterprise Registration Certificate content.
Fine of 50,000,000 VND to 100,000,000 VND (or higher depending on the industry) for conducting business in the form of an enterprise without registration.
Suspension of operation: The facility is forced to close until the license is supplemented.
Confiscation of profits: Forced return of illegal profits gained from the violation.

Particularly, from July 1, 2025, with Decree 117/2025/ND-CP, tax authorities will tighten tax management for business activities on digital platforms and e-commerce. Failure to register a business is synonymous with tax evasion, leading to the risk of criminal prosecution.

The Link Between Business Licenses and Intellectual Property

This is a critical issue that many businesses often overlook. There is a common misconception: “I have a Business License, and the company name has been granted by the Department of Planning and Investment, which means I own this brand exclusively.”

This is legally incorrect.

Business Name (on the License) and Trademark (Brand) are two different subjects.

Business Name: Protected under the Law on Enterprises, with a scope only preventing duplicate names within the same province/city or on the national business registration system. The primary purpose is administrative management.
Trademark (Brand): Protected under the Law on Intellectual Property. This is a sign used to distinguish goods and services of different organizations and individuals. Trademark ownership is only established when a Protection Title is granted by the Intellectual Property Office of Vietnam (IP Vietnam).

Risks of focusing only on the Business License while ignoring Trademark Registration:

Many businesses, after stable operation and possessing a full Business License, receive a trademark infringement warning letter from a third party. The reason is that the company name or logo on the signage inadvertently duplicates or is confusingly similar to a previously protected trademark.

In this case, the enterprise is forced to:

Change the brand name, remove signage (costly and damaging to reputation).
Face administrative penalties for intellectual property infringement.
Compensate the trademark owner for damages.

Procedure for an Enterprise to Commence Operation

To ensure legal operation and asset protection, enterprises need to take the following steps:

Register for Enterprise Establishment: Performed at the Business Registration Office – Department of Planning and Investment. The result is the Enterprise Registration Certificate.
Apply for Sub-licenses (If operating in conditional sectors): Enterprises self-review their industry codes. If they fall into the list of conditional business lines (such as Health, Education, Transport…), they must submit an application to the corresponding specialized departments.
Register for Intellectual Property Protection (Trademark, Logo, Invention): This is a step Tran & Tran recommends performing in parallel with Step 1. Filing a trademark application early helps the enterprise establish a priority date, preventing infringement and brand theft from the start.

Tran & Tran’s Role in Protecting Enterprises

Tran & Tran Intellectual Property Company Limited is a specialized unit in the field of Intellectual Property. Our mission is to accompany established and aspiring enterprises to protect their most valuable intangible assets: Brands and Innovation.

After you complete the Business License procedure, Tran & Tran will assist you in resolving the following in-depth legal issues:

Search and Assess Trademark eligibility: Before printing packaging or signage, we help businesses check if the intended name/logo infringes on anyone’s IP rights, saving risk costs.
Registration to establish IP rights:
- Trademark Registration (Logo, Brand Name).
- Industrial Design Registration (Packaging, product shape).
- Copyright Registration (Software, applied art works).
- Patent/Utility Solution Registration.
Consulting and Handling Infringements: Representing enterprises in handling counterfeit goods, knock-offs, and brand violations in the market.
IP Asset Management Consulting: Supporting enterprises in building regulations for management, commercial exploitation, and valuation of intellectual property assets.

Frequently Asked Questions (FAQ)

1. Is business registration required for online business in 2026?

YES. According to new regulations in Decree 117/2025/ND-CP and the Law on Tax Administration, individuals/households doing business on digital platforms (Shopee, TikTok Shop, Facebook…) must register for tax. E-commerce platforms will be responsible for declaring and paying tax on behalf of sellers or providing information to tax authorities. You should register as a Business Household or Company to operate professionally and deduct expenses.

2. Does opening a small coffee shop at home require a license?

If the business activity is small-scale with low income as prescribed by the Provincial People’s Committee, registration may not be required. However, if you open a shop with a fixed location and hire employees, you MUST register as a Business Household and obtain a Certificate of Food Safety to avoid fines.

3. How long is the Business License valid?

Enterprise Registration Certificate: Usually indefinite (unless dissolved or revoked).
Sub-license: Has a specific term. Example: Food Safety License (3 years), Travel License (5 or 10 years depending on type), FDI Retail License (usually 5 years or according to project duration).

4. Where do I re-apply for a lost Business License?

You submit a re-issuance application to the agency that issued that license (Department of Planning and Investment or specialized Departments).

Conclusion

Having a Business License is a necessary condition for a business to be born, but Intellectual Property Protection is the sufficient condition for a brand to survive and develop sustainably. Do not let the effort of building your business be compromised by legal risks regarding branding.

Focus on your core business activities and let Tran & Tran help you build a legal barrier to protect your intellectual assets.

Tran & Tran Contact Information

Hotline for Consultation: 024 3732 7466
Email: ip@trantran.vn
Address: Room 802, Talico Building, No. 22 Ho Giam Street, Quoc Tu Giam, Dong Da, Hanoi

This article is for legal information reference only. For in-depth advice on Intellectual Property, please contact us directly.