Foreign-invested enterprise (FI) means an enterprise whose “members or shareholders are foreign investors”. Business license fee (BLF is not explicitly defined by law but can be understood as “an amount of money that shall be paid by organizations or individuals”. when conducting production or business activities in Vietnam. This fee is paid annualy. The BLF applies to all enterprises, regardless of whether they are domestic or foreign-invested enterprises.
I. Regulation on the rate of BLF collection:
For enterprises, the fee rate is classified based on their form of operation and registered capital, specifically
- (i) Organizations with charter capital or investment capital exceeding VND 10 billion must pay a BLF of VND 3,000,000 per year;
- (ii) Organizations with charter capital or investment capital of VND 10 billion or less must pay a BLF of VND 2,000,000 per year.
Legal basis: Article 4.1 Decree No. 139/2016/ND-CP
Authorities determine the BLF rate based on the charter capital or investment capital stated in the relevant registration certificates. If enterprises change their capital, the rate is based on the previous year’s capital.
If the BLF payer’s charter or investment capital is in a foreign currency, they must convert it into VND using the buying exchange rate of the bank or credit institution where they hold an account at the time of payment to the state budget.
Legal basis: According to Article 2 Circular No. 302/2016/TT-BTC
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II. FDI enterprises do not have to pay business license fees
2.1. Enterprises established with new tax codes and enterprise codes are exempt from paying BLF.
For newly established enterprises not eligible for BLF exemption, the following provisions apply:
- (i) If the enterprise obtains its tax registration, tax code, and enterprise identification number within the first six months of the year, it shall pay the full annual BLF.
- (ii) If the enterprise obtains its tax registration, tax code, and enterprise identification number within the last six months of the year, it shall pay 50% of the annual BLF
Legal basis: Article 4.3 Circular No. 302/2016/TT-BTC
2.2. Enterprises are not required to pay the BLF during periods of temporary suspension of production or business operations
To qualify for BLF exemption during this period, the BLF payer must submit a written notification to the directly managing authority concerning the temporary suspension of production or business activities.
- (i) The written notification of temporary suspension is submitted to the tax authority before the prescribed BLF payment deadline (January 30 annually), and
- (ii) The BLF for the year of intended suspension has not yet been paid. If the above conditions are not satisfied, the enterprise must pay the BLF for the entire year, and any previously paid amounts shall not be refunded or reduced according to the months of suspension.
Legal Basis: Article 1.2.c Decree No. 139/2016/ND-CP
III. Declaration and payment of BLF:
– If an enterprise commences production, business activities, or is newly established, it must submit the BLF declaration and pay the fee before January 31 each year.
– If there are dependent units (branches, representative offices, or business locations) conducting business within the same provincial jurisdiction, the enterprise must submit the BLF declaration for these dependent units to the tax authority directly managing the fee payer.
– If dependent units operate in a different provincial jurisdiction from where the enterprise’s head office is located, these units must independently submit their BLF declarations to the tax authority directly managing the respective dependent units.
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