After Incorporation in China: What Sub-Licenses Remain? Comp

Having the incorporation licence (business licence/ERC) is only the “birth certificate” — real business needs a “forest” of sub-licences: fire protection, environment, food safety, healthcare, education… China and Vietnam both run sub-licence systems — but with different structures: China splits “pre-approval” (licence before registration) and “post-approval” (register first, licence after); Vietnam leans more on post-inspection. This article lists the sub-licences still needed after formation — in both countries.

China: “pre-approval” vs “post-approval”

Pre-approval (tiền kiểm): some sectors need the sectoral licence before business registration (e.g. finance, education, healthcare, telecom) — without it, SAMR refuses registration. Post-approval (hậu kiểm): register first, then obtain sectoral licences after (e.g. restaurants — register, then get the food-safety licence; hotels — fire and security clearances). Reform: China has moved many sectors from “pre” to “post” (to shorten formation) — but the “pre” list stays long for sensitive sectors. Meaning: before registering in China, check whether your sector is “pre” or “post” — getting it wrong wastes round trips.

Vietnam: sectoral sub-licences

Mechanism: Investment Law 143/2025 lists 198 conditional business sectors — firms register the ERC first (a few need prior approval), then meet conditions/obtain licences before trading. Common sub-licences: (1) Fire protection: fire acceptance (factories, hotels, malls); (2) Environment: environmental impact assessments / protection plans; (3) Food safety: food-safety eligibility certificates (food, restaurants); (4) Healthcare: medical-practice and pharma-trading licences; (5) Education: school-establishment licences (see article FDI-LC-0781); (6) Construction: building permits, capacity certificates. Timing: each licence 1–3 months — run in parallel and the total is 2–4 months; run sequentially and it’s 6–12 months.

Comparison: five differences

(1) Structure: China has an explicit pre/post split; Vietnam is mainly post-inspection (register first, comply after). (2) Count: China has more (a dense system, central/local layers); Vietnam has fewer (198 conditional sectors, shrinking). (3) Timing: China takes a bit longer (more windows); Vietnam is faster if parallelised. (4) Language: China in Chinese; Vietnam in Vietnamese/English. (5) Enforcement: both suffer “licences breeding licences” (officials demanding extra off-book steps) — local counsel needed as a buffer.

The priciest sub-licences: fire and environment

Fire protection: not just a “licence” — it’s construction. Factories/hotels need compliant detection, suppression and evacuation systems before acceptance. Costs: fire systems for a 5,000m² factory run VND 2–5 billion (addressable alarms, sprinklers, pumps, water tanks) — excluding rework if acceptance fails (redoing one item can cost hundreds of millions). Trap: many developers build fire systems “for show” to pass acceptance — when a real fire hits, the system doesn’t work (and insurers deny claims). Environment: environmental impact assessments for large projects cost VND 200–500 million (consulting + monitoring) and 3–6 months — plus wastewater/emission treatment systems (billions to tens of billions depending on sector). Principle: fire and environment are the two “don’t-play-around” licences — do them properly from day one (passing acceptance and genuinely safe).

Outsource vs DIY: who handles sub-licences?

DIY: the firm prepares, files and tracks dossiers itself — saving service fees, learning the process (useful next time). Downsides: time-consuming (staff must learn), error-prone (unwritten rules unknown), slower (no relationships). Hiring services (lawyers/consultants): faster (they do it daily), fewer errors (they know actual requirements), saving staff time. Downsides: fees (VND 10–50 million per licence depending on type), and dependence (not learning means hiring again next time). Rule: simple, one-off licences (tax registration, publication) → DIY; complex, recurring ones (fire, environment, food safety) → hire the first time (learn alongside), DIY from renewal. Warning: never hire licence “brokers” (no legal standing, promising “guaranteed pass”) — money lost, and a fake licence means extra crimes.

The renewal trap — licences expire quietly

The sneakiest sub-licence risk isn’t obtaining them — it’s forgetting to renew. How it happens: a food-safety certificate valid for 3 years, a fire-acceptance tied to a 5-year cycle, an environmental permit with annual reporting — each with different expiry dates, managed by different people, in different drawers. One day an inspector arrives, asks for the certificate, and it’s been expired for 8 months — the business has been operating “underground” without knowing it. Penalties apply exactly as if you’d never had the licence. The fix is boring and effective: a single spreadsheet (or compliance software) listing every licence, its expiry date, the renewal lead time (start 3–6 months early — renewals can be as slow as first applications), and a named owner. Review it monthly in the management meeting — 5 minutes that prevents the most embarrassing compliance failure there is. Bonus: the same register tracks changing requirements — renewal is often when authorities add new conditions; expecting them beats discovering them. And when you expand (new products, new premises), check whether existing licences cover the expansion — most don’t automatically; operating expanded lines on old licences is the same violation as having none at all. When in doubt, ask the licensing body before expanding — not after. A five-minute question now beats a five-month suspension later.

Sub-licence strategy: five principles

(1) List first: before forming, list every sub-licence your sector needs (ask counsel; don’t guess). (2) Parallelise: independent licences go simultaneously (fire + environment + food safety can parallelise). (3) Ready the premises first: many licences need physical inspection (fire inspects the building, food safety inspects the kitchen) — finish the premises before inviting inspection (failing means waiting for the next round). (4) Build relationships: with the sectoral licensing bodies — not “greasing”, but clarifying requirements before filing, avoiding returned dossiers. (5) Track validity: sub-licences expire (1–5 years) — keep a renewal calendar (an expired licence means unknowingly operating “underground”).

The hidden cost of sub-licences: budgeting time and money

Sub-licences are routinely under-budgeted: (1) Official fees are small, but compliance costs aren’t — fire-protection retrofits, environmental treatment systems and kitchen upgrades for food safety can run to hundreds of millions or billions of dong; (2) time costs — every month waiting for licences is a month of rent without revenue; a 6-month licensing queue on a VND-500-million/month lease is VND 3 billion of dead cost; (3) the “almost” trap — opening before all licences issue (“we’ll get the last one next week”) risks fines and suspension that cost more than the wait. Budget rule: add 20–30% to your expected licensing timeline and separately budget the compliance works each licence requires. The investors who treat sub-licences as paperwork get surprised; those who treat them as construction and engineering projects get through.

Checklist: post-formation sub-licences

1. List all sub-licences for your sector (ask counsel). 2. Classify “pre/post” (China) or priority order (Vietnam). 3. Ready the premises to standard before inviting inspection. 4. Parallelise independent licences. 5. Clarify requirements with licensing bodies before filing. 6. Track progress per licence (owner + deadline). 7. Keep a renewal calendar (1–5-year validity). 8. Archive all licences (originals + scans). 9. Don’t trade without complete licences (fines + suspension). 10. Update when expanding business lines (new licences).

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This article has been quality-reviewed by the FLAW AI Legal Council