Setting up a security company in Vietnam

With the development of social life, the demand for security services is increasing, from companies, enterprises, commercial centers, apartments, small and medium shops,… all need protection. Therefore, many investors want to set up a security company, but there are still questions about the conditions to be able to establish a security company. Viet An Law Firm will summarize the conditions for setting up a security company in Vietnam in the article below.

Legal bases

• Investment Law 2020;
• Enterprise Law 2020;
• Decree 96/2016/ND-CP stipulates security and order conditions for a number of conditional investment and business lines.

What is a security services business in Vietnam?

Security service business is a business in the field of protection for the purpose of making a profit from such activity. Business of protection services includes: Services to protect people, property, objectives and lawful activities of agencies, organizations and individuals.

Market access conditions of foreign investors in Vietnam

Vietnam does not stipulate conditions for foreign investors’ market access to protection services in the WTO Schedule of specific commitments on services or any other FTAs. Therefore, the regulations applicable to foreign investors are directly stipulated in the law on internal affairs. Specifically, Decree 96/2016/ND-CP stipulates security and order conditions for a number of conditional investment and business lines as follows:

Conditions on the form of investment

• Foreign enterprises may only enter into joint ventures with Vietnamese security service providers in cases where they need to invest in: machinery and technical means for protection work;
• The form of business of a foreign-invested security company is allowed to operate: foreign enterprises contribute capital to purchase machinery and technical means for protection work.

General conditions for setting up a security company in Vietnam

Conditions for business units

The security service business unit must be an enterprise established in accordance with the provisions of law.

Conditions for legal representatives

The legal representative of the company needs to meet the following conditions:

• Not falling into cases where criminal prosecution has been initiated and is being investigated, prosecuted or tried by Vietnamese or foreign procedural agencies;
• No previous convictions for crimes infringing upon national security or other crimes committed by intentional error sentenced to 3 years or more in prison have not yet had their convictions cleared;
• Not falling into the following cases: being temporarily suspended from serving a prison sentence; is serving a non-custodial rehabilitation sentence; are being placed on probation, banned from residing, banned from holding office, prohibited from doing business in lines of investment and business subject to security and order conditions according to court decisions; are being subjected to local educational measures;
• No drug addiction; not in the period of being temporarily postponed or temporarily suspended from observing decisions on placement in compulsory education institutions or compulsory detoxification establishments;
• Not during the period of application of administrative sanctions
• Have a diploma from college or higher;
• Not being the person responsible for security and order of the security service business establishment that in the preceding 24 months has been revoked without a definite period of the Certificate of eligibility for security and order.

Conditions on the types of licenses required

• To establish an enterprise security company, it is necessary to apply for a fire protection permit and a certificate of eligibility for security and order. These are two types of documents required if you want to set up a security service company.
• Regarding fire protection licenses, enterprises can apply at the Public Security Offices of districts where the enterprise is headquartered.
• Regarding the certificate of eligibility for security and order, enterprises can submit dossiers directly / via postal services to the headquarters of the Police Department for Administrative Management of Social Order – Ministry of Public Security or online through the National Public Service Portal and the Public Service Portal of the Ministry of Public Security.

Conditions for establishing a security company for foreign-invested security service business  in Vietnam

• Being an enterprise that has been operating security services continuously for at least 05 years;
• The representative of the contributed capital of a foreign business establishment is a person who has not been handled by the law agency of the foreign country where they operate their business for violations related to the provision of protection services from a warning or higher;
• The contributed capital of foreign business establishments may only be used to purchase machinery and technical equipment for protection work. The contributed capital of the foreign business establishment is at least USD 1,000,000 (one million US dollars).

Procedures for setting up a security company in Vietnam

Step 1: Prepare necessary information and draft establishment dossier

• Choosing the type of enterprise, in Vietnam, there are 05 types of enterprises including: Private enterprises, one-member limited liability companies, limited liability companies with 2 or more members, joint stock companies and partnerships;
• Name the company in accordance with the Law on Enterprises 2020;
• Determine the information: the location of the head office, business lines, charter capital of the company and the title of the legal representative of the company.

This is the general information that any established business needs to prepare. In addition, enterprises need to prepare documents:

• valid and valid citizen identity cards or passports of members contributing capital to the company;
• A copy of the college or university degree of the legal representative of the company (being a manager or director).

Step 2: Submitting business establishment documents

A dossier of registration of a security service company includes:

• An application for registration of provision of security services;
• The company’s charter protects;
• List of members if opening a limited liability company with 2 or more members. If opening a joint-stock company, there must be a list of shareholders;
• Legal papers of individuals and legal entities being members, shareholders, legal representatives of the company.
• Power of attorney for Viet An Law to carry out procedures

After sufficient preparation, the enterprise will submit the application at the Business Registration Office under the Department of Planning and Investment where the enterprise is headquartered.

Step 3: Engrave the legal entity seal

• According to the Enterprise Law 2020, the legal entity seal includes a seal made at a seal engraving establishment or seal in the form of a digital signature in accordance with the law on e-transactions;
• The enterprise shall decide on the type of seal, quantity, form and content of the seal of the enterprise, branches, representative offices and other units of the enterprise;
• The management and retention of the seal shall comply with the provisions of the company’s charter or regulations promulgated by the enterprise, branch, representative office or other unit of the enterprise bearing the seal. Enterprises use seals in transactions in accordance with the provisions of law.
• Previously, enterprises were obliged to notify the seal sample to the business registration authority, but from January 1, 2021, enterprises will no longer need to carry out this procedure.

Step 4: Procedures after company registration

After being granted the business registration certificate, the security company and enterprise need to perform the following tasks:

• Within 30 days from the date of receipt of the business registration certificate, the enterprise must announce the enterprise registration contents.
• Within 90 days from the date of issuance of the business registration certificate, members and shareholders must contribute the full registered capital.
• The company must make a register of members (register of shareholders) immediately after being granted the Certificate of Business Registration. The register of members (Register of Shareholders) can be a paper document, an electronic data collection recording information about ownership of contributed capital of company members.
• Declare license fees.
• Hang a sign at the company headquarters.
• Open a business bank account
• Register for your first time.
• Notice of application of tax calculation method.
• Apply invoices.
• Procedures for using e-invoices
• Register to use digital signatures.
• Labor declaration, social insurance contributions for employees.
• Apply for a Written Acceptance or Fire Protection Inspection Record
• Apply for a certificate of eligibility for security and order. This is an important and mandatory license if you want to operate security services. To learn more about this procedure, you can refer to:

Responsibilities of security service providers in Vietnam

• Within 5 days from the date of commencement of business activities, a written notice enclosed with a copy of the Certificate of satisfaction of security and order conditions must be sent to the police of the commune, ward or township where the establishment operates its business
• Do not use business establishments to carry out activities contrary to the provisions of law
• In case of loss of the Certificate of satisfaction of security and order conditions, within 03 working days, a written notice must be issued to the competent police agency
• Implement the regime of quarterly or irregular reports on the security and order situation under the guidance of the Ministry of Public Security
• Recruiting and employing security service personnel must be at least 18 years old, have full capacity for civil acts, have a clear background, have no convictions for murder, intentional injury, trespass on property and have a lower secondary school diploma or higher.
• Use only security service personnel who have been trained and certified as Security Professionals
• Having a labor contract with a security service employee in accordance with the provisions of law
• Issuance of signboards and costumes (registered with competent police agencies) to employees
• Not to provide protection services to those who operate contrary to the provisions of law
• If carrying out protection activities in a locality other than where the head office is located, within 05 days from the date of implementation of the protection objective, a written notice must be issued together with a valid copy of the Certificate of eligibility for security and order; list of employees performing their duties and send them to the police of communes and wards where the protection objectives are implemented
• For foreign-invested security companies, within 20 days from the date of business operation, they must provide competent police agencies with lists and valuation documents of machinery and technical means serving the protection work of their establishments.

Some frequently asked questions about the conditions for setting up a security company in Vietnam

What kind of licenses are required to qualify as a security company?

To be eligible to operate security service business, enterprises need to have an enterprise registration certificate, a fire protection license and a certificate of satisfaction of security and order conditions.

Is there a way for a person without an associate’s degree or higher to become a legal representative of the company?

Have. You can hire or ask a person who fully meets the conditions to become the legal representative of the company and you will be a co-representative. Vietnamese law does not require the company to have only 1 representative and the law only requires the company to have 01 representative with a college diploma or higher.

If you have any questions regarding the conditions for establishing a security company or any other service industry, please contact Viet An Law Firm for the most specific and detailed advice!