Benefits of Converting a Household Business into an Enterprise: Why 2025 Is the Best Time
- Vinex Official
- Jun 20, 2025
- 2 min read
What Are the Benefits of Converting a Household Business into an Enterprise?
Starting in 2025, Vietnam’s household businesses will face major changes: mandatory e-invoicing, stricter tax reporting, and the gradual elimination of fixed-tax (quota) schemes. In this context, understanding the benefits of converting a household business into an enterprise is more important than ever.
Here’s why this strategic shift could be a game changer:
Lower Corporate Income Tax (CIT): enjoy a tax rate of just 15–17% for eligible revenue thresholds
No tax obligation if the business operates at a loss
Access to government support: including free e-invoicing tools, accounting software, and training
Improved access to financing, government tenders, and B2B partnerships
Better transparency, stronger legal standing, and enhanced business credibility
Latest Updates: Micro-Enterprise Policy and Government Incentives
Under Resolution 68 and announcements by the Ministry of Finance:
From June 1, 2025, household businesses with annual revenue above VND 1 billion must issue e-invoices
By 2026, the quota tax regime will be completely abolished
The government strongly encourages household businesses to convert into micro-enterprises, particularly in retail, food services, and agriculture
Additional benefits of converting a household business into an enterprise include:
Tax exemption for the first 3 years, and a 50% tax reduction for the next 4 years
Fewer legal risks when fixed-tax schemes are phased out
Eligibility for local support programs, loans, and development projects backed by government or donor agencies.
Why Convert in 2025? A Side-by-Side Comparison
Criteria | Household Business | Micro-Enterprise |
Tax System | Fixed-rate (quota) | CIT 15–17%, based on actual profit |
Invoicing | Mandatory from 2025 | Free e-invoicing software available |
Accounting | No formal bookkeeping | Simplified reporting under Circular 132 |
Access to Support | Limited | Eligible for free training, tax guidance, software |
Credibility & Expansion | Low trust, hard to raise funds | Easier to partner with banks, corporates, and govt |
The benefits of converting a household business into an enterprise are not only regulatory — they open doors to funding, growth, and long-term survival in a modern economy.
In a rapidly formalizing economy, the benefits of converting a household business into an enterprise are clear:
Lower and fairer taxes
Access to tools and training
Legal clarity and stronger financial credibility
Fewer risks, more opportunities
👉 If you’re running a stable business, looking to grow, or simply want to do things by the book — 2025 is the ideal year to make the shift and enjoy maximum support.
Ready to Enter the Vietnamese Market the Right Way?
If you're a foreign entrepreneur or investor exploring Vietnam’s vibrant retail, F&B, or agriculture sectors, now is the perfect time to formalize your business presence.
✅ Take advantage of government incentives
✅ Operate with full legal clarity and tax efficiency
✅ Build long-term credibility with partners, suppliers, and regulators
👉 Let us help you convert your household business into a registered enterprise – fast, simple, and fully compliant with local laws.
📩 Contact our legal consultants today to receive step-by-step guidance tailored to foreign investors in Vietnam.
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