Being permitted to invest in a new business line is only half the journey. The other half — often the more arduous one — is satisfying the business conditions needed to actually operate: sub-licences, certificates of eligibility, statutory capital, and standards on facilities and personnel. Many foreign investors, after passing the market access gate and holding the IRC in hand, are surprised to find their company still cannot open for business because a whole set of sectoral licences is missing.
The key distinction: market access conditions answer the question “may a foreign investor enter this sector”, while business conditions answer the question “what must be satisfied to do business in this sector”. These two layers of conditions are governed by two different systems of legal instruments, administered by two different groups of authorities, and must be handled in parallel rather than in sequence — because obtaining sub-licences can take many months, enough to derail any launch plan.
This article maps the most common groups of business conditions foreign investors typically encounter — from sub-licences and statutory capital to personnel requirements — together with a way to plan the licensing process so you are never “stuck” between the IRC date and the operating date. The content is for general reference; each business line requires checking the current sector-specific instruments.
Quick Summary
| Topic | Business conditions (sub-licences, statutory capital, sector-specific requirements) for foreign investors after market access is granted |
|---|---|
| Who it suits | Foreign investors who have been or are about to be granted an IRC; project implementation teams; in-house counsel of FDI companies preparing for operation |
| What to check | The list of sub-licences by business line; conditions on capital, personnel and facilities; the procedure and timing for each licence; the licensing authorities |
| Desired outcome | A complete licensing roadmap, with no missing “gate” between the IRC date and the date of lawful operation |
Build the licensing matrix: the first thing to do
The first issue is to get the licence list right. Each conditional business line is tied to one or more sub-licences: international travel business needs a licence for travel services business; employment services need an employment services operating licence; multimodal transport needs a multimodal transport business licence; real estate business needs to meet capital and project conditions… This list is not contained in a single instrument but scattered across sectoral laws and guiding decrees — missing one licence means the company operates “without a licence” in that segment, with the full range of sanction risks.
A project’s licensing matrix should have columns for: the licence/condition name; the issuing authority; the required dossier; the preconditions (whether IRC/ERC is needed first); the estimated processing time; and the status. It is the single control sheet the leadership uses to track progress week by week — and compiling it fully requires research across the sectoral legal system, which is a lawyer’s job, not the business team’s.
The most common groups of business conditions
- Sectoral business licences: international travel, employment services, multimodal transport, prize-winning electronic games, security services… — each with its own decree and its own issuing authority.
- Capital conditions: minimum statutory capital for certain sectors (real estate business, financial services, insurance…). Note that statutory capital is different from charter capital — statutory capital must be maintained throughout the business operation, not merely “present at the licensing moment”.
- Personnel conditions: the head or a proportion of staff must hold practising certificates, professional qualifications or experience (healthcare, education, audit, law…). Practising certificates are issued by professional bodies — this dependency chain must be factored into the timeline.
- Facility conditions: standards on area, equipment, fire prevention, food hygiene and safety, environmental protection — usually subject to physical inspection and acceptance.
- Ongoing maintenance and reporting duties: periodic reports to the sectoral regulator, maintaining the conditions throughout operation, renewing time-limited licences.
“Static” vs “dynamic” conditions: ongoing obligations
Some conditions only need to be satisfied once at licensing (statutory capital, facilities, the head’s qualifications), but many must be maintained continuously throughout the business operation: personnel conditions (the proportion of staff holding practising certificates), facility conditions (fire safety, food hygiene and safety standards), and periodic reporting duties to the sectoral regulator. A company that “met the conditions at licensing but lost them in operation” will still be sanctioned and may have its licence revoked.
Typical signs of “lost conditions”: hiring a certificate holder to “front” the licence application and dismissing them right after; facilities that passed acceptance but then deteriorated; statutory capital that was in place at inspection and then withdrawn; the departure of the professional responsible person without a qualified replacement in time. All are violations, and sectoral regulators have the right to conduct surprise inspections.
Licensing sequence: what comes first, what runs in parallel
As a rule, the company must have the IRC (recording the project and its business lines) and the ERC (legal-entity status) before applying for most sub-licences — because the application dossier always requires these two certificates. But that does not mean you must wait for the IRC before starting preparation. The optimal sequence:
- Prepare the technical dossier early — as soon as the licensing matrix is complete: facility drawings, personnel files (degrees, practising certificates, criminal records), the business plan, operating procedures. This is the most time-consuming stage.
- Recruit qualified personnel in parallel: do not wait for the IRC to hire certificate holders — late recruitment costs many more months.
- File in waves: file wave 1 as soon as the IRC/ERC is in hand; follow up, explain, supplement; undergo physical facility acceptance where inspection is required; update the matrix after each licence is granted.
The biggest risk at this stage is planning the launch without factoring in sub-licence timing: leasing premises, hiring staff and importing equipment, only to then discover the licences — then finding out another 3–6 months of sectoral procedures are needed while rent keeps flowing every month. Sub-licences must be on the project’s critical path from the very first day of planning.
The extra layer of conditions for foreign investors
In some business lines, on top of the general business conditions, foreign investors must meet additional specific conditions: for example on the investor’s international experience, on the ownership ratio in certain types of services, or on the scope of operation (serving only certain customer groups). This is the layer most easily missed, because it sits not in the usual “business conditions” instruments but in the sector’s rules on foreign investment — which is precisely why the research must be done by someone who understands both legal systems.
Five risks that leave a company “licensed but as if not”
- Operating beyond the licence scope: sub-licences usually state a clear scope — the type of service, the geographic area, the customer group. Expanding into an unlicensed segment without applying for an addition means operating without a licence for the excess part.
- Forgetting reporting and renewal duties: many sub-licences are time-limited; forgetting to renew means operating during a period when the licence has expired.
- Key personnel changes not updated: for sectors where conditions attach to an individual (the professional responsible person), their departure without a timely replacement leaves the company “not meeting the conditions” immediately.
- Expanding business lines without reassessment: each expansion needs three checks — whether the IRC must be amended, which additional sub-licences are required under sectoral law, and supplementary business-line registration with the business registration authority.
- Being inspected and having a record drawn up: in that case, assess the record’s correctness, prepare explanations, remedy consequences — and redesign internal compliance procedures so the violation does not recur. Put all of these duties into the company’s periodic compliance checklist.
When to engage a lawyer
A lawyer should be involved as soon as the licensing matrix is built — i.e. right after the planned business lines are finalised. A lawyer is essential where the sector has complex technical conditions (healthcare, education, environment, fire prevention): the licensing dossier includes drawings, technical plans and operating procedures — someone is needed to “translate” legal requirements into specific technical requirements for the implementation team, avoiding the situation where facilities are built only to be found non-compliant.
FLAT LAW FIRM builds a licensing matrix for each FDI project: from the list of business lines, we list all sub-licences, capital – personnel – facility conditions, issuing authorities, dossiers and timelines. At the implementation stage, we prepare and file licensing dossiers, work with line ministries and local authorities, and accompany physical inspections and acceptance — with a Vietnamese–English–Chinese bilingual team. At the operating stage, our retainer package includes licence validity tracking, renewal deadline reminders, and updates on newly issued business conditions.
If you need a complete licensing matrix for your project — or are stuck at any sectoral licensing step — FLAT LAW FIRM can review, prepare dossiers and represent you before the competent authorities. Please contact us for advice.
FAQ
How do market access conditions differ from business conditions?
Market access conditions answer “may a foreign investor enter this sector” (governed by investment law and international commitments). Business conditions answer “what must be satisfied to do business in this sector” — sub-licences, statutory capital, personnel, facilities (governed by sectoral law). Both layers must be satisfied for lawful operation.
Does holding an IRC mean the business conditions are satisfied?
No. The IRC only records the investment project and its business lines; sub-licences under sectoral law must still be applied for separately. The investment registration authority does not issue sub-licences — a common misconception that leaves many projects stuck between the IRC date and the launch date.
When should sub-licence preparation start?
As soon as the business lines are finalised — in parallel with the IRC application. The technical dossier, recruiting qualified personnel and completing facilities are the most time-consuming stages and do not need to wait for the IRC. Only the formal filing step requires the IRC/ERC first.
How do statutory capital and charter capital differ?
Charter capital is the capital the owners commit to contribute when establishing the company. Statutory capital is the minimum capital level required by law for certain conditional business lines — and it must be maintained throughout the business operation, not merely “present at licensing”.
What is needed to add a new business line?
Three checks: (1) whether the new line requires amending the IRC; (2) which additional sub-licences are needed under sectoral law; (3) supplementary business-line registration with the business registration authority. A wrong sequence or a missed step creates an unlicensed business segment.
What happens if a sub-licence expires without renewal?
The company will operate during a period when the licence has expired — i.e. operating without a licence in that segment, with the full range of sanction risks. Tracking validity and renewing before expiry is therefore one of the most important tasks of compliance management.
What does a licensing matrix contain?
For each licence/condition: the licence name, the issuing authority, the required dossier, the preconditions (whether the IRC/ERC is needed first), the estimated processing time and the implementation status. It is the single control sheet for the leadership to track licensing progress week by week.
