A lot of online sellers sourcing from 1688 run for a year or more without registering a business. The usual reason: "my volume is still small." The registration threshold in Vietnam is lower than most sellers realize, and some of the practical benefits hit directly at import cost and the ability to scale.
When you are actually required to register
Under current Vietnamese rules, an individual earning revenue from goods or services above VND 100 million per year must pay tax. That threshold is a tax trigger, not strictly a registration trigger, but in practice the two are linked. A shop moving 10 to 15 million VND in monthly revenue is already in range.
Beyond tax, the major platforms are tightening legal requirements on sellers. TikTok Shop now requires business registration documents to unlock certain seller features, particularly for brand programs and official stores. Shopee Mall mandates a business license outright. If you ever plan to move to Mall or access premium promotional placements, having the registration already done removes one bottleneck.
The two forms most sellers use
Sellers importing from 1688 generally choose between two structures.
Household business (ho kinh doanh ca the) is the most common entry point. You register at the local ward or district office, the paperwork is straightforward, and fees are low. Tax is either a flat presumptive rate or tied to actual revenue depending on your category and location. This structure fits a one-to-five person shop with annual revenue under roughly VND 10 billion.
A private enterprise or limited liability company makes sense when you grow larger, when you need to issue proper VAT invoices to business customers, or when you need a corporate bank account to settle with overseas suppliers through formal import channels. Setting up a company involves slightly more paperwork than a household business, but outsourcing it to an accounting service keeps the overhead manageable.
For most sellers at the early-to-mid stage of importing from 1688, a household business is the practical starting point. Upgrade to a company later when the operational need is real, not before.
Benefits that affect your import operation directly
This is the part most sellers miss when they think about registration. It is also the part most relevant to the actual cost of importing.
Formal imports with input VAT invoices. Once you have a tax ID, you can request VAT input invoices for goods imported through official channels. Those invoices let you offset input VAT against your tax liability, meaning your effective landed cost is lower than it would be without them. Not every shipment goes through formal import clearance, but as volume grows, that option becomes worth using.
Corporate bank account, clean cash flow. Many shop owners run sales receipts and supplier payments through a personal account mixed with living expenses. When revenue climbs, that mix produces inaccurate margin calculations, makes tax filing messy, and makes it nearly impossible to prove transaction history if you want a business loan. A separate business account fixes the data quality problem at the source.
Brand registration becomes available. If you are building a private label on top of 1688 goods, trademark registration in Vietnam requires legal entity status or a registered household business. Individuals cannot register a trademark for commercial use in the standard way.
More sales channels open up. Shopee Mall, certain B2B channels, and wholesale arrangements with retail chains all require business documentation. If you plan to go that direction later, having the paperwork done means no extra delay when the opportunity arrives.
What happens when you stay informal at scale
Selling without registration at small volumes is extremely common and rarely causes immediate problems. As revenue grows, the risk profile changes.
Back-tax assessment and penalties. Tax authorities increasingly use e-commerce platform data to cross-check sellers with high transaction volumes who have not filed. If you are flagged, the liability covers multiple prior years plus late penalties. That figure can equal months of shop profit.
Platform account restrictions. Some platforms have started requiring tax verification or business license confirmation from sellers above certain revenue thresholds. If you cannot comply quickly, your account may be suspended or restricted while a campaign is running.
No proof of income for financing. When you want to borrow to scale up inventory or diversify into new product categories, banks and credit funds ask for business bank statements and tax filings. An informal operation has neither.
What the registration process actually looks like
The process is not complicated. These are the main steps for a household business.
- Prepare documents: national ID, a business address (your home address qualifies), the intended business name, and the activity category. For online retail, the typical registration category is something like "retail via network" or "consumer goods retail."
- Submit the application: at your district or town administrative office, or online via the national business registration portal (dangkykinhdoanh.gov.vn) if your province supports online filing.
- Processing time: usually 3 to 5 business days when the application is complete. Some offices take longer.
- Fee: a modest administrative fee, typically a few hundred thousand VND, varying by locality.
- Register your tax ID: after receiving the household business certificate, register the tax ID at your local tax office. This step is required to issue or receive formal invoices.
If you are unfamiliar with the process, an accounting service can handle the filing for you. The total cost is usually under one million VND for the full package.
Ongoing obligations after registration
Registration is not a one-time action and done. There are a few things to keep up with.
Periodic tax filing and payment. Household businesses typically pay an annual business license tax plus personal income tax or a presumptive flat tax depending on sector and revenue size. The exact amounts depend on your declared revenue and registered category. A local accountant can give you the real figures for your specific goods.
Keep transaction records. Hold on to input invoices, warehouse receipts, and payment confirmations. These are what you produce when audited.
Report changes. If you change your business address, add a new activity category, or stop operating, notify the registration office. If you stop operating but leave the tax ID active, tax obligations continue accumulating.
For most mid-scale 1688 importing shops, the accounting workload is light if you use simple bookkeeping software or a part-time accountant. The monthly accounting cost is a fraction of the penalty exposure from an unregistered shop at significant revenue.
Bottom line
Registering a business is not about formality. It is about not paying a much larger price once revenue crosses a threshold that arrives faster than expected. Start with a household business, separate your accounts, and keep clean books from the beginning. Upgrade to a company when the operation genuinely needs it. That sequence costs far less time and money than untangling the opposite order later.