Household Business: A Simple Startup Option for Vietnamese People

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

However, many people still don't fully understand how household businesses operate, how to register them, and what their obligations are to the state. 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, operated by one person or members of the same household. The person whose name is registered is fully responsible for all business activities with their personal assets.

Unlike a company, a household business does not have independent legal status. This means you cannot establish branches or representative offices like a company. If multiple family members are involved, one person must be designated as the official representative, and this person will be recognized as the household head.

According to the provisions of Decree 168/2025/ND-CP, each person is only allowed to establish one single household business nationwide. Nevertheless, you can still conduct business at multiple locations, provided you register one place as the main office and notify the tax authority about the remaining locations.

The household business identification number is also your tax code, automatically issued when the registration procedures are completed through the commune-level system.

Is an Individual Business Different from a Household Business?

Many people wonder about the difference between an individual business and a household business. In essence, an individual business is usually understood as a person operating independently, not involving the household. Meanwhile, a household business can include multiple members participating and sharing responsibility.

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

Tax Code for Household Businesses

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

From July 1, 2025, there is an important change according to Circular 86/2024/TT-BTC and Decree 168/2025/ND-CP. The tax code of a household business will be replaced by an individual identification number. This is a step towards standardizing data and simplifying administrative procedures within the entire state management system.

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

In case of incorrect information, you need to contact the Tax Department directly for timely adjustments. If you were previously issued more than one tax code, you need to provide identification information to consolidate all into a single code.

Who is Eligible 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 civil hành vi năng lực (capacity for civil acts) as per the Civil Code. This means you must be 18 years old, have full cognitive ability, and control your actions.

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

There are some cases where registration of a household business is not mandatory. Specifically, these are households engaged in agricultural, forestry, fishery, and salt production, or small-scale activities such as street vending or itinerant trading with low income. However, if operating in conditional business investment sectors as regulated by provincial People's Committees, 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 household business. This model is suitable for those who want to start small and have flexibility in management.

Detailed Household Business Registration Process

From July 1, 2025, the household business registration procedure will be carried out at the Commune-level People's Committee where the business headquarters is located, instead of the district level as before. This helps shorten the distance and increase processing speed.

Prepare Documents

You need to prepare a Household Business Registration Application Form according to the prescribed form, and a copy of the ID card of the individual or household members. If the household appoints a representative, a notarized or certified power of attorney is required.

Submit Documents

You have two options to submit your application. The first method is to submit it directly at the one-stop shop of the Commune-level People's Committee where the business headquarters is located. The second method is to submit it online through dichvucong.gov.vn using a digital signature, which saves travel time.

Receive Results

Within three working days, if the application is valid, the Commune-level People's Committee will issue the Household Business Registration Certificate and send the information to the tax system to issue the household business tax code. In case the application is incomplete or has errors, you will receive specific notification for amendments and additions.

Submitting 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 must fulfill their tax obligations depending on their scale, industry, and revenue. Commonly encountered taxes include value-added tax, personal income tax, and some special taxes such as excise tax or environmental protection tax, depending on the goods and services being traded.

According to the amended Personal Income Tax Law passed on December 10, 2025, from January 1, 2026, household businesses with revenue from VND 500 million or more in a calendar year will have to pay VAT and PIT.

You can declare and pay taxes through various channels. The administrative procedure resolution information system, the eTax Mobile application on your phone, or by accessing thuedientu.gdt.gov.vn can all be used.

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

Regulations on Compulsory Social Insurance

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

The compulsory social insurance contribution rate is calculated as 25% of the salary used as the basis. Of this, 22% goes to the retirement and survivorship fund, and 3% goes to the sickness and maternity fund. You have the right to choose the salary level as the basis for contribution, but it must not be lower than the reference level and not exceed twenty times the reference level.

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

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

Things to Note When Operating

Understanding household businesses and their accompanying legal obligations is essential before you decide to start a business. Although this model is simple, it still requires seriousness in complying with regulations on registration, taxes, and social insurance.

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

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 operate everything more smoothly and professionally.

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