Should You Start as a Household Business or Formal Company in Vietnam?

A comprehensive guide for entrepreneurs with no prior background

Bottom Line Up Front

Our Recommendation: Start as a Limited Liability Company (LLC) from day one.

While household businesses seem simpler and cheaper initially, Vietnam's 2025 regulatory environment heavily favors formal corporate structures, especially for fashion e-commerce businesses with growth ambitions.

What You'll Learn

Vietnam's Business Landscape

Understand the $32 billion fashion e-commerce market and 2025 regulatory changes that make structure choice critical

Five Business Structure Types

Learn about sole proprietorships, partnerships, LLCs, joint stock companies, and household businesses

Detailed Comparisons

Compare structures across tax, costs, liability protection, scalability, and capital raising ability

Fashion E-Commerce Specifics

Platform requirements, labeling regulations, and retail licensing for fashion businesses

Real Case Study

See how these principles apply to Strawberry Sunday, a fashion startup launching in Vietnam

Actionable Next Steps

Get a clear checklist and timeline for implementing your chosen business structure

Household Business vs. LLC: Key Differences at a Glance

Household Business

Limited Liability Company

Setup Time

3 days

1-2 months

Initial Cost

~$50

$5,000-8,000

Liability Protection

None (Unlimited)

Full Protection

Employee Limit

10 maximum

Unlimited

Multiple Locations

Single location only

Unlimited locations

Foreign Ownership

Vietnamese citizens only

100% foreign allowed

Raise Investment

No equity issuance

Can accept investors

2026 Tax Changes

Simplified tax eliminated

3-year CIT exemption

"Vietnam's fashion e-commerce market offers exceptional opportunity for well-positioned entrants. The regulatory environment in 2025 makes proper structure from the start more valuable than ever."

— Vietnamese Corporate Structure Guide for Strawberry Sunday Fashion Startup (2025)