In practice, particularly in small-scale procurement and service contracts, the question of whether a household business is eligible to participate in bidding frequently arises. Proper determination of the legal status of household businesses is essential for bid preparation and assessment of bidder eligibility.
The Law on Bidding 2023 provides clearer guidance on eligible bidders, expressly allowing household businesses to participate in bidding, subject to statutory conditions.
1. HOUSEHOLD BUSINESSES UNDER VIETNAMESE LAW
Vietnamese law does not provide a standalone definition of a household business. However, Article 79.1 of Decree No. 01/2021/ND-CP stipulates that a household business is established by an individual or household members and bears unlimited liability for its business activities.
Accordingly, a household business does not have legal person status, and its owner bears unlimited liability.
2. DEFINITION OF BIDDER UNDER THE LAW ON BIDDING 2023
Article 4.26 of the Law on Bidding 2023 defines a bidder as an organization, individual, or consortium participating in bidding, submitting bids, and directly entering into and performing contracts if selected.
This definition confirms that bidders are not limited to legal entities. Accordingly, lawfully operating individuals, including household business owners, may participate in bidding subject to statutory requirements.
3. CONDITIONS FOR HOUSEHOLD BUSINESSES TO BE ELIGIBLE BIDDERS
Pursuant to Article 5.2 of the Law on Bidding 2023, a household business is deemed an eligible bidder if it satisfies all of the following conditions:
3.1. Registration and Legal Status
- Holding a valid household business registration certificate;
- Not undergoing dissolution or having its registration revoked;
- The household business owner is not subject to criminal prosecution.
3.2. Bidding Eligibility Requirements
- Being registered on the National E-Procurement System prior to bid award approval;
- Ensuring compliance with competition requirements under Article 6 of the Law on Bidding 2023;
- Not being subject to bidding prohibition under Article 87.3 of the Law on Bidding 2023;
- Being shortlisted where a shortlist procedure is applied.
Based on the foregoing analysis, it can be concluded that household businesses are permitted to participate in bidding under the Law on Bidding 2023, provided that all statutory eligibility requirements and bidding document conditions are fully satisfied.
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