Business households become businesses, a shift from reality
After nearly 15 years of running a household appliance - building materials store in Xuan Dinh ward, Hanoi, Mr. Nguyen Van Nam realized that the household business model gradually revealed limitations as the scale expanded. Issuing value-added invoices, accessing loans, signing large contracts or opening more establishments all encountered obstacles. "I used to think that starting a business was very complicated, but when business developed more, I realized that if you want to go long-distance, you have to change" - Mr. Nam shared.
At the beginning of this year, Mr. Nam completed the procedures to transfer from a business household to a limited liability company, hired a full-time accountant, applied sales management software and fully implemented regulations on invoices and documents. Thanks to that, business operations gradually became more professional.
According to Mr. Nam, the conversion helps businesses enjoy some tax and fee exemption and reduction policies; and at the same time enhances prestige with customers and partners. "When becoming a business, product introduction, contract negotiation and market expansion are much more favorable" - Mr. Nam assessed.
Meanwhile, Ms. Tran Thi Huong - owner of a food production facility in Bac Tu Liem district (Hanoi) - said that she is completing procedures to switch from household businesses to businesses in the near future.
According to Ms. Huong, business operations in recent years have grown quite well, the number of orders from supermarkets, convenience stores and distribution partners is increasing. However, many customers require signing contracts and issuing invoices under the legal entity of the business, so she began to consider changing the operating model.
For Ms. Huong, becoming a business not only helps improve her reputation with partners but also opens up opportunities for trade promotion, market expansion and long-term brand development.
Preferential policies create more motivation for transformation
In fact, in order to create favorable conditions for the transition process, the State has issued many mechanisms and policies to support through Resolution 68-NQ/TW, Resolution 198/2025/QH15 of the National Assembly and the Law on Corporate Income Tax in 2025.
Over the past time, the Ministry of Finance has continued to collect opinions on the draft Law on Supporting Small and Medium Enterprises (amended) with many proposals that are expected to create more motivation for business households to transform into businesses.
Talking to Lao Dong Newspaper, Dr. Mac Quoc Anh - Vice Chairman cum General Secretary of the Hanoi Association of Small and Medium Enterprises - assessed that the most notable point of the draft is the thinking of "transition with inheritance, support and time to adapt".
According to Mr. Mac Quoc Anh, the draft proposes that enterprises converted from business households inherit legitimate rights, obligations and benefits; be supported in transferring tax data, invoices, social insurance, credit history; be exempt from business registration fees, first-time announcement fees; apply a simple mechanism for declaration, tax payment, accounting and reporting; and be supported with digital platforms, accounting software and accounting services in the early stages.
The biggest barrier for business households is not only the cost of establishing a business but also the psychology of worrying about more complicated procedures, more obligations and increased compliance costs. Therefore, support policies need to help them see the benefits when transitioning and have enough time to adapt" - Mr. Mac Quoc Anh said.
He also highly appreciated the proposal to support compliance in the first year after conversion. Accordingly, businesses are guided and warned about the level of compliance; cases of initial violations of taxes, accounting, social insurance or labor but not fraud, evasion of obligations or causing serious consequences may be considered for exemption from administrative penalties.
I think this is an approach of "teaching to comply" instead of "waiting for mistakes to be punished". This will help business households feel more secure when entering the business environment" - Mr. Mac Quoc Anh commented.
