Social enterprise

Social enterprise, which operates towards the community and the common interests of society, is encouraged to develop by law. In this article, Bizlawyer will give our potential clients legal advice about law on the rights and obligations of social enterprise.

According to Article 10 of the 2014 Enterprise Law, an enterprise which is considered a social enterprise must satisfy the following criteria:

  • The enterprise is registered for establishment in accordance with Enterprise Law;
  • The enterprise’s operational objective is to resolve social or environmental problems, in the interests of the community; and
  • The enterprise uses at least 51 per cent of its total annual profit to conduct re-investment for the purpose of implementing social or environmental objectives as registered.

For-profit social enterprise or non-profit social enterprise is similar to other enterprises since they are both organized and managed in the form of enterprise. The difference of them is that social enterprise is established to solve existing problems of society as environment  protection; protection and fulfillment of basic human rights through activities such as creating job for people who are difficult to integrate, vulnerable; and provision of services in health, education, clean water supply, waste treatment, pollution, etc. Therefore, in addition to the rights and obligations like other normal enterprise, social enterprise has also the following rights and obligations:

• Rights:

  1. Owners and managers of social enterprises shall be considered for and entitled to receive favourable conditions and assisstance during issuance of relevant liences and certificates as prescribed by law; and
  2. The enterprise is permitted to mobilize and receive funding aid in various forms from other individuals, enterprises, non-governmental organizations, other Vietnamese or foreign organizations in order to cover managerial and operational expenses of the enterprise.

• Obligations:

  1. Social enterprise shall maintain its objectives and operational conditions. In case an enterprise currently operating wishes to convert into a social enterprise, or a social enterprise wishes to abandon its social or environmental objectives, or fails to use its profits to conduct re-investment, such enterprise must notify the competent authority to carry out necessary procedures;
  2. Social enterprise is not allowed to use the funding raised for purposes other than purpose of covering managerial and operational expenses or resolving social orenvironmental issues registered by the enterprise. In case social enterprise receives incentives or support, it shall submit an annual report on its  operational status to Department of Planning and Investment or an  agency of the People’s Committee managing the support where its  headquarter is situated; and
  3. Social enterprise must notify its commitment to pursue social or environmental objectives to the business registration authority which will be published on the National Business Registration Portal during its establishment or operation.

Bizlawyer is providing legal services related to this matter. If you still have any questions, please do not hesitate to contact us via our Hotline: +8486 888 1900 or email: for time ly advice and support.

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