Starting a business doesn't have to be complicated with company registration procedures or large capital. Many people begin by selling online, opening a coffee shop, or a small grocery store as a sole proprietorship. This is a flexible business model, suitable for those who want to experiment with business ideas or create an additional source of income.

However, many people still don't fully understand how household businesses operate, how to register, and what obligations they have to the government. This article will help you understand each aspect in the simplest and most practical way.

What exactly is a household business?

A household business is a small-scale business run by one person or members of the same household. The person registered as the owner is fully liable for all business activities with their personal assets.

Unlike businesses, household businesses do not have independent legal personality. This means you cannot establish branches or representative offices like a company. If multiple family members participate, one person must be appointed as the official representative, and this person will be registered as the head of the household.

According to Decree 168/2025/ND-CP, each person is only allowed to establish one sole proprietorship nationwide. However, you can still conduct business in multiple locations, as long as you register one as your main office and notify the tax authorities of the other locations.

Your business registration number is also your tax identification number, which is automatically issued upon completion of the registration process through the commune-level system.

Is it different for an individual business to be a household business?

Many people wonder about the difference between an individual business and a household business. Essentially, an individual business is generally understood to be an independent entity, separate from a household. Meanwhile, a household business can include multiple members who participate and share responsibility.

However, according to current regulations, both are generally referred to as household businesses and are subject to the same management regulations and tax obligations. This distinction is primarily conceptual rather than legal.

Issues Regarding Tax Identification Numbers for Household Businesses

When registering a business, you will automatically be assigned a tax identification number. This is a unique identification number generated by the tax registration application system and directly recorded on the Business Registration Certificate.

From July 1st, 2025, a significant change will occur according to Circular 86/2024/TT-BTC and Decree 168/2025/ND-CP. The tax identification number of household businesses will be replaced by a personal identification number. This is a step aimed at standardizing data and simplifying administrative procedures throughout the entire state management system.

If you do not yet have a personal tax identification number, you need to register for tax for the first time at the Tax Office in your place of residence or through the National Public Service Portal. For those who already have a personal tax identification number and their information matches the National Population Database, the system will automatically update without any further procedures.

If there is any discrepancy in the information, you need to contact the Tax Department directly for timely correction. If you were previously issued more than one tax identification number, you need to provide identifying information to consolidate them all into a single number.

Who Has the Right to Establish a Household Business?

Not everyone can register a household business. According to Decree 168/2025/ND-CP, you must be a Vietnamese citizen and have full legal capacity as defined by the Civil Code. This means you must be at least 18 years old and have the full capacity to understand and control your own actions.

Households can also register, but the members must be Vietnamese citizens and appoint one person as the official representative to manage the business operations.

There are some cases where business registration is not mandatory. Specifically, this includes households engaged in agriculture, forestry, fisheries, salt production, or small-scale activities such as street vending and itinerant trading with low income. However, if operating in a business sector subject to conditions as stipulated by the provincial People's Committee, registration is still required.

You need to carefully consider your personal resources such as capital, skills, time, and risk tolerance before deciding to register a sole proprietorship. This form of business is suitable for those who want to start small and have flexibility in management.

Detailed Business Registration Procedure

From July 1, 2025, business registration procedures will be carried out at the People's Committee of the commune where the business is located, instead of the district level as before. This helps shorten the distance and speed up the processing.

Prepare the documents

You need to prepare the Business Registration Application Form as prescribed, and a copy of the Citizen Identification Card (CCCD) of the individual or household members. If the household appoints a representative, a notarized or certified power of attorney is required.

Submit Application

You have two options for submitting your application. The first is to submit it directly at the one-stop service department of the People's Committee of the commune where your business is located. The second is to submit it online via dichvucong.gov.vn using a digital signature, saving you travel time.

Get Results

Within three working days, if the application is valid, the People's Committee of the commune will issue a Business Registration Certificate and send the information to the tax system to assign a business registration number. If the application is incomplete or contains errors, you will receive a specific notification to amend and supplement it.

Applying online through the National Public Service Portal allows you to track the processing progress and receive results quickly without having to visit in person multiple times.

Tax Obligations of Household Businesses

Household businesses are required to fulfill tax obligations depending on their size, industry, and revenue. Common taxes include value-added tax, personal income tax, and some specific taxes such as excise tax or environmental protection tax, depending on the goods and services traded.

According to the amended Personal Income Tax Law passed on December 10, 2025, from January 1, 2026, business households with revenue of VND 500 million or more in a calendar year will have to pay VAT and personal income tax.

You can file and pay taxes through various channels. The administrative procedure information system, the eTax Mobile application on your phone, or accessing the website thuedientu.gdt.gov.vn are all options.

Depending on revenue and industry, household businesses can pay taxes using either the lump-sum method or the declaration method. The lump-sum method is usually applied to households with stable revenue and small scale, while the declaration method requires more detailed recording of revenue and expenses.

Regulations on Compulsory Social Insurance

From July 1, 2025, according to the 2024 Social Insurance Law, officially registered business owners must participate in mandatory social insurance. This is an important change aimed at expanding social security for self-employed workers.

The mandatory social insurance contribution rate is calculated at 25% of the base salary. Of this, 22% goes to the retirement and death benefit fund, and 3% goes to the sickness and maternity fund. You have the right to choose your base salary for contributions, but it cannot be lower than the reference level and cannot exceed twenty times the reference level.

Currently, the applicable reference rate is VND 2,340,000 per month according to Decree 73/2024/ND-CP. Therefore, the minimum monthly payment is VND 585,000. You can flexibly choose to pay monthly, quarterly, or every six months depending on your financial situation.

Participating in mandatory social insurance offers many long-term benefits. You will receive a pension in old age, death benefits for your relatives, maternity benefits, and sickness benefits. This is an investment in the future and provides peace of mind for yourself and your family.

Things to Note When Operating

Understanding the sole proprietorship model and its associated legal obligations is essential before you decide to start one. While this model is relatively simple, it still requires serious adherence to regulations regarding registration, taxes, and social insurance.

You need to regularly monitor changes in policies and regulations to ensure your business operations are always legal. Fulfilling all obligations not only helps avoid legal risks but also creates a solid foundation for long-term growth.

If you need support with cash flow management, tax payments, or other financial solutions during your business operations, choosing a reputable banking partner will help you run everything more smoothly and professionally.

Note: The information in this article is for reference only and may change over time. You should refer to current legal documents or contact the relevant authorities for the most accurate information.