When starting a business or small-scale trading in a residential area, many individuals wonder whether it is mandatory to register as a household business to open a small-scale retail outlet. This question has now been clarified by law through Decree 168/2025/ND-CP, helping people and households to be more proactive in choosing a suitable and compliant business form.
General principles for business registration
According to Vietnamese law, all profit-making activities must be managed by the State through business registration, most commonly through enterprises or household businesses. However, to support small-scale livelihood activities, the law allows for certain cases to be exempt from registration obligations. Whether or not registration is required depends on the characteristics of the activity, revenue scale, and actual business sector.
Groups of entities exempt from registering as household businesses according to Decree 168/2025/ND-CP
Based on Clause 3, Article 82 of Decree 168/2025/ND-CP, the law identifies two main groups of subjects that are not required to register as household businesses, specifically as follows:
Production activities in the fields of agriculture, forestry, fisheries, and salt production.
Households directly involved in agricultural production, forestry, aquaculture, or salt production are exempt from business registration. These are traditional production activities closely linked to land and water resources and play an essential role in rural economic development.
Mobile businesses and low-income services
This group includes small-scale commercial activities that are unstable in location or generate only low income. The low income threshold is not applied uniformly nationwide but is specifically defined for each locality by the People's Committee at the provincial level.
Some typical activities in this group include:
- Street vendors selling snacks, food, and drinks in small quantities.
- Trading in bulk: buying goods in batches to resell.
- Mobile businesses using pushcarts, motorbikes, or other forms of continuous movement.
- Seasonal business, not a regular occurrence.
Low-income services include shoe shining, lottery ticket selling, locksmithing, car repair, car washing, hairdressing, painting, photography, etc.
Distinguishing between fixed-location stores and small-scale retail businesses.
To avoid confusion between registering a store and other forms of petty trading, the concepts in Decree 39/2007/ND-CP are still used as a reference, in which:
- Street vending: buying and selling goods at a mobile location, without a fixed place.
- Petty trading: trading in small quantities of goods, on a very limited scale.
- Selling snacks: selling food and drinks for dine-in or takeaway.
If you have a fixed business location, display a sign, and your revenue exceeds the low income threshold set by the local authorities, then registering as a sole proprietorship is mandatory to ensure compliance with tax obligations and legal rights.
Businesses operating in regulated sectors still need to register.
One point to note is that, regardless of whether it's a mobile business or a low-income service, if the business falls under the category of conditional business activities, individuals must still register their business and obtain all relevant licenses and certificates. Examples include food businesses requiring special preservation or services related to security and public order.
Benefits of voluntary registration
According to Clause 4, Article 82 of Decree 168/2025/ND-CP, the law allows individuals and households, even those exempted from the regulations, to proactively register their business if they so desire. Registration facilitates transactions with partners, access to loans, invoice issuance, and long-term brand building.
Understanding and correctly applying the regulations in Decree 168/2025/ND-CP will help small business owners minimize legal risks and choose the right direction for their future business development.
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Content production by: Mr. Le Hoang Tuyen – Founder & CEO MAN – Master Accountant Network, Vietnamese CPA Auditor with over 30 years of experience in Accounting, Auditing and Financial Consulting.
Source: Vietnamese Law
