Today, the pawn business is one of the highly profitable industries, so pawnbrokering has become an extremely familiar and chosen activity by many people. However, this is a conditional business that will be subject to strict management by the State. Therefore, not everyone knows or meets the conditions to set up a pawn company. Therefore, to answer customers’ questions, Viet An Law Firm offers the article on conditions for establishing a pawn company below.
Pawnbrokering under Vietnamese civil law is a form of pledge of property at a pawn shop, whereby people will hand over the property to the pawnbroker to borrow a certain amount of money. Pawn service business includes money lending service business and the borrower must have lawful assets brought to the pawn service business for pledge.
Normally, people having pawned property will have to pay back the loan amount and the corresponding interest (if any) in full within the stipulated period and receive the pledged property back. At the expiration of the agreed redemption period, the pawnbroker would automatically becomes the owner of the object.
Pawn company means an enterprise established in accordance with current laws and providing pawn services for loans, a conditional business line as prescribed by law.
Conditions for establishing a pawn company in Vietnam
Currently, in Vietnam, the pawn service business is mostly operated in the form of pawn shops, organized by an individual or household. However, the establishment of a pawn company will make pawn activities more professional, thereby also making it easier for the State to manage this activity. Foreign investors can still operate this service and ensure the same business investment conditions as Vietnamese investors. However, in practice, this condition is very difficult to meet for foreigners.
Accordingly, to establish a pawn company, it is necessary to meet the following basic conditions:
According to the provisions of the Investment Law 2020, pawn business is a conditional business line, namely security and order conditions. Therefore, when established, it is imperative to meet security and order conditions for this type of business.
Accordingly, pursuant to Articles 7 and 9 of Decree 96/2016/ND-CP, the person responsible for the security and business order of the pawn service shall meet the following business conditions:
In addition, the person responsible for security and order of the business establishment must not fall into one of the following cases:
For overseas Vietnamese or for foreigners:
In addition, specific requirements for pawn services must be met such as:
In addition to the conditions on the responsible person, the pawn service company also needs to have the following responsibilities:
Depending on the type of enterprise, when it is necessary to choose the type of business to suit the number of members, capital contributors as well as the ratio of business target capital of their company.
Currently, the enterprise law stipulates that there are popular types of enterprises as follows:
For the name of the pawn company can also be Vietnamese or foreign. If the name is in a foreign language, the name must be printed or written in a smaller font size than the Vietnamese name at the company’s business locations. The name must not be identical or confusing with other companies that have been registered nationwide and must ensure at least two elements in the name: Type of business and proper name.
According to the current law, the pawnbroker’s company will be entitled to decide on the type of seal, the number of seals or the form and content of the seal and are not required to notify the seal sample. However, the pawnbroker will have to manage, use and store its seal in accordance with the provisions of the company’s charter and regulations promulgated by the company, branch or representative office or other unit of the pawn company bearing the seal.
Based on the current law, pawn business does not fall into the prescribed cases requiring the minimum and maximum capital of the company. Therefore, the pawn company can freely choose the charter capital to establish the company.
Therefore, the selection of charter capital for registration should be suitable and corresponding to the actual conditions of the company to be more favorable in doing business, creating the most optimal profit source from the capital you spend.
After carrying out the procedures for establishing an enterprise at the Business Registration Office – Department of Planning and Investment, in order for the enterprise to provide pawn services, the enterprise needs to carry out procedures for applying for a Certificate of satisfaction of security and order conditions. At that time, you need to prepare the following documents:
After preparing all the above documents, you will submit the documents to the Police Department for Administrative Management of Social Order of the Police of provinces and centrally-run cities (can be submitted by post, in person or via the portal).
The time limit for settling procedures for issuance of certificates of eligibility for security and order is five working days (05 days).
In addition, within 20 days from the commencement of operation, the pawnbroker’s business shall provide the competent police agency with the following documents:
If you want to find out more information about the conditions for establishing a pawn company, please contact Viet An Law Firm for our best support!
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