According to Vietnam Law on Investment and Vietnam WTO’s Commitments, it is possible for a foreign investor to setup wholly foreign invested company operating the IT services (NewCo).
Furthermore, Vietnam Government encourages foreign investor to invest in the field of IT. However, we would like to note that during the licensing process, the competent authority may examine carefully some following points:
Location of NewCo: Investor is required to provide accurate address of location where the company is based. Also, competent authority shall require investor to provide physical lease contract of location and other related documents of the location such as: Certificate of land use rights of lessor or certificate of building ownership…
Charter capital of NewCo: Vietnam Law does not imply a minimum amount of investment capital to setup a company operating in the field of IT. However, foreign investor must prove that amount of investment capital is sufficient to run NewCo . According to our actual practice, the investment capital for IT Company should be from 50,000 USD to 100,000 USD. In order to prove the sufficient financial capacity before setting up company, it is required investor to provide bank statement certifying balance in the bank. After NewCo is setup, investor is required to transfer such amount to NewCo’s account. Investor may have no more than 3 months to fully transfer the registered charter capital applied to JSC and no more than 36 months to fully transfer registered charter capital applied to LLC
Business lines of NewCo: As stated above, Vietnam Government encourages IT services, however, IT services is quite broad and common area. It is required foreign investor to clarify what the business lines are and each line needs to match with an equivalent CPC code classified by Law before applying for Investment Certificate. The following is suggested CPC code in the field of IT services permitted by Law:
- 841 – Consultancy services related to the installation of computer hardware
- 8410 – Consultancy services related to the installation of computer hardware
Assistance services to the clients in the installation of computer hardware (i.e. physical equipment) and computer networks.
- 842 – Software implementation services
- 8421 – Systems and software consulting services
- 84210 – Systems and software consulting services
Services of a general nature prior to the development of data processing systems and applications. It might be management services, project planning services, etc.
- 8422 – Systems analysis services
- 84220 – Systems analysis services
Analysis services include analysis of the clients’ needs, defining functional specification, and setting up the team. Also involved are project management, technical coordination and integration and definition of the systems architecture.
- 8423 – Systems design services
- 84230 – Systems design services
Design services include technical solutions, with respect to methodology, quality-assurance, choice of equipment software packages or new technologies, etc.
- 8424 – Programming services
- 84240 – Programming services
Programming services include the implementation phase, i.e. writing and debugging programmes, conducting tests, and editing documentation.
- 8425 – Systems maintenance services
- 84250 – Systems maintenance services
Maintenance services include consulting and technical assistance services of software products in use, rewriting or changing existing programmes or systems, and maintaining up-to-date software documentation and manuals. Also included are specialist work, e.g. conversions.
- 843 – Data processing services
- 8431 – Input preparation services
- 84310 – Input preparation services
Data recording services such as key punching, optical scanning or other methods for data entry.
- 8432 – Data processing and tabulation services
- 84320 – Data processing and tabulation services
Services such as data processing and tabulation services, computer calculating services, and rental services of computer time.
- 84330 – Time sharing services
This seems to be the same type of services as 84320. Computer time only is bought; if it is bought from the customer’s premises, telecommunications services are also bought. Data processing or tabulation services may also be bought from a service bureau. In both cases the services might be time sharing processed. Thus, there is no clear distinction between 84320 and 84330.
- 8439 – Other data processing services
- 84390 – Other data processing services
Services which manage the full operations of a customer’s facilities under contract: computer-room environmental quality control services; management services of in-place computer equipment combinations; and management services of computer work flows and distributions.
- 844 – Data base services
- 8440 – Data base services
- 84400 – Data base services
All services provided from primarily structured databases through a communication network.
- Exclusions: Data and message transmission services (e.g. network operation services, value-added network services) are classified in class 7523 (Data and message transmission services).
- Documentation services consisting in information retrieval from databases are classified in subclass 96311 (Library services).
- 845 – Maintenance and repair services of office machinery and equipment including computers
- 8450 – Maintenance and repair services of office machinery and equipment including computers
- 84500 – Maintenance and repair services of office machinery and equipment including computers
Repair and maintenance services of office machinery, computers and related equipment.
In conclusion, it is possible for foreign investor to set up NewCo operating in the field of IT services. It is noted that the owner of company does not need to obtain Work Permit.
Legal service provided by SB Law.
With many years of experience on Business, Foreign investment, Real estate, Litigation and with a team of professional lawyers and consultants educated from well-known universities over the world, the firm quietly has ability to provide highest quality of pragmatic advices and support you to establish the company in Viet Nam.
We are proud to act as legal advisor for a numeral of clients including but not limited to IBM GLOBAL, INDUSTRIAL COMMERCIAL BANK OF CHINA (ICBC), INOVAR SDN BHD, LG ELECTRONICS, MILITARY BANK (MB), MINDRAY, NIPPON STEEL, NIKKEN INTERNATIONAL ASIA, PETROVIETNAM FINANCIAL COMPANY, PLUS STATIONERY CORPORATION, VIETTEL TECHNOLOGIES, VIETTEL REAL ESTATE, VSTV (SUBSIDIARY COMPANY OF CANAL PLUS), VNPT GLOBAL, VTC, GEDEON RICHTER, ITO CORP.,
In the field of IT, so far S&B Law has successfully obtained Investment Certificates for Vinaplace Co., Ltd (Estonian Investor); Dhice Co., Ltd (American Investors); Smart Apps VN Co., Ltd. (Spanish Investor), etc., Rice Creative Co., Ldt.,We do hope that from now on, a long term co-operation shall be soon setup between us.
For ease of reference, we would like hereinafter to send you the legal service proposal as follows:
SB LAW is ready to provide package service to you for the purpose of establishing foreign invested company in Vietnam as follows:
- Providingadvices on all legal aspects relating to procedures of obtaining Investment Certificate for the Company from competent authority;
- Preparing Application Dossiers (in both Vietnamese and English) for obtaining Investment Certificate for the Company;
- Representing your Company to submit the Application Dossiers for obtaining License Investment Certificate for the Company;
- Working with provincial competence authority on behalf of your company to obtain the best support on reviewing and considering the application and providing explanation and/or supplementation of application dossiers per request;
- Updating information of the approving process to your company;
- Receive new License for establishment of foreign invested company from provincial competent authority and hand it over to your Company.
For Post Licensing procedures, S&B Law shall assist you to:
- Obtain the Seal and Certificate of Seal Sample Registration from City Police;
- Publish the company operation on 3 continuous number of newspapers;
- Register the Tax code number under your company in Department of Tax;
- Open the bank account under your company.
- Within 01 (one) working day from singing legal service contract between two parties, S&B Law shall deliver your Company checklist of information and necessary documents for establishment of wholly foreign invested company in Vietnam;
- Within 07 (seven) working days from full receipt of information and necessary documents delivered by your Company, S&B Law shall deliver your Company application dossiers for reviewing and proceeding;
- Within 01 (one) working day from full receipt of signed document provided by your Company, S&B Law shall submit application dossiers to provincial competent authority;
- Within 30~45 (thirty to forty) days from submission of dossier to provincial competent authority, S&B Law shall obtain Investment Certificate;
- Within 05 (five) working days from obtaining Investment Certificate, S&B Law shall register and obtain the Seal and Certificate of seal sample registration and deliver to your Company.
- Within 05 (five) working days from obtaining the Seal and Certificate of seal sample registration , S&B Law shall register and obtain Tax code number in the Department of Tax
The time schedule indicated in this Item is estimated based on initial information provided by client and actual status of licensing procedure at the time of preparing this Legal Service Proposal. The actual time schedule may be shorter or longer than expected. In case the licensing procedure is longer than expectation, S&B Law shall exert all its strength to accelerate the process in order to protect right of the client.
Assistance after completing service contract.
After completing the service contract, SB LAW shall provide the proposed company legal advices regarding to matters related to the actual operation of the proposed company including provisions applicable to labors; tax; recruitment. etc.