In the context of business operations, a “business location” refers to the physical site where an enterprise conducts its activities. Understanding its definition, key characteristics, and the necessary legal procedures for establishing and notifying business locations is crucial for entrepreneurs and organizations looking to comply with regulations and optimize their operations. This article explores these aspects in detail to guide businesses through the process of establishment business locations.
Definition
Pursuant to Clause 3, Article 44 of the 2020 Enterprise Law: “The business location of an enterprise is a place where the enterprise carries out specific business operations.”
Thus, business location can be understood as the place where businesses conduct specific business activities such as buying, selling, exchanging goods and services that generate revenue, helping businesses cut transportation costs and increase sales. brand coverage, while easily accessing new partners and especially promoting customer care activities.
Characteristics of business location
Based on the Enterprise Law 2020, business locations have the following characteristics:
- An enterprise may establish business locations at places other than the places where its head office or branches is/are located;
- Enterprises must carry out procedures to notify the establishment of a business location to the Business Registration Office where the business location is established;
- Business location is the place where the business activities of the enterprise take place. Business locations carry out business activities for specific industries and professions that the enterprise has registered.
- Business locations do not have their own tax codes, so tax accounting must be carried out depending on the company in the form of centralized tax declaration.
- Names of business locations must consist of the name of the enterprise accompanied by the words “Dia diem kinh doanh”. They shall be shown at the offices of the business locations.
- The business locations must not be the same as the head office of the enterprise.
Notification of establishment of business locations
Dossiers for notification of establishment of business locations
Dossiers for notification of establishment of business locations include:
- Notification of establishment of business locations:
- In case the business location is directly under the enterprise, the business location notice shall be signed by the legal representative of the enterprise.
- In case the business location is directly under a branch, the business location notice must be signed by the head of the branch.
- Business Registration Certificate.
Procedures for notification of establishment of business locations
Step 1: Send notice of establishment of business location
Within 10 days after deciding to establish a business location, the enterprise shall send a notice of establishment of a business location to the business registration division of the locality where the business location is based;
Step 2: Receive dossiers
Within 03 working days from the date of receiving :
+ If the dossiers are valid, the Business Registration Office updates information about the business location in the National Business Registration Database for the enterprise.
+ In case an enterprise needs it, the Business Registration Office will issue a Business Location Registration Certificate to the enterprise.
+ In case the dossier is not valid, the Business Registration Office will notify the enterprise in writing of the content that needs to be amended or supplemented.
Distinction between Head Office and Business Location
According to Article 42 of the 2020 Enterprise Law: “The enterprise’s headquarters shall be located within Vietnam’s territory, is the enterprise’s mailing address, has phone number, fax number and email address (if any).”
In contrast, as mentioned above, “The business location of an enterprise is a place where the enterprise carries out specific business operations.”
The key differences between the head office and business location can be clearly observed as follows:
First, the business location is dependent on the head office. The location of a business must be within the same province or city where the head office is located. Therefore, an enterprise is not allowed to establish a business location outside the administrative boundaries of the province or city where its head office is situated. Additionally, business locations do not have separate tax codes and must be accounted for under the company’s tax obligations.
Second, the business location is where actual business activities take place. While the head office may merely serve as the official registered address of the company or the place where customers contact the business, it may not necessarily involve active business operations. On the other hand, a business location is where the company’s commercial activities are actually conducted. In practice, some enterprises may register their head office at a certain address to fulfill legal requirements, while the real business activities occur elsewhere. This could be considered as registering a “virtual head office.”
Distinction between Branch and Business Location
According to Clause 1, Article 44 of the 2020 Enterprise Law: “A branch of an enterprise is its dependent unit which has some or all functions of the enterprise, including authorized representative. The business lines of a branch shall match those of the enterprise.“
In addition to the definition and characteristics of a business location outlined above, the following table distinguishes a branch from a business location:
| Criteria | Branch | Business Location |
| Function | Performs part or all functions of the enterprise, including acting as a representative under authorization. | Only for conducting specific business activities, no independent functions. |
| Business Scope | The branch’s business activities must align with the parent enterprise’s business sectors. | The business location does not need to align with the business scope of the enterprise; it is simply a place of operation. |
| Tax Identification Number | Has its own tax ID and must file taxes separately from the parent enterprise. | Does not have a separate tax ID and is included in the parent enterprise’s tax filings. |
| Legal Status | Considered a part of the enterprise and operates with some level of autonomy. | Not an independent entity; it is just a physical location for business activities. |
| Management and Operations | Managed by a branch manager and must follow enterprise policies. | Managed by the enterprise, but may not require separate management or staff. |
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