How to establish an IT company in Vietnam

With a population of over 90 million people and a fast growing economy. Vietnam is becoming an ideal destination for many foreign investors. Recognizing the importance of technology to the economy, the Government of Vietnam has many incentives to attract foreign investment in the field of technology and computer software. In general, foreign investors will be very favorable when establishing IT company in Vietnam.

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Industry code when establish an IT company in Vietnam

Foreign investors establishing IT companies in Vietnam should note the industry code in the Vietnam Economic Sector System (VSIC). Issued together with Decision No. 27/2018/QD-TTg, Vietnam’s economic system includes a list of industries and cable codes 4. Newly established businesses and operating enterprises are based on log into this system to register industries with state management agencies. VSIC code is important because foreign-invested IT companies need to register their business under the Vietnamese economic system in order to operate in information technology.

Another important issue that investors should pay attention to is the CPC code when investing in an IT company. The CPC (Provisional Central Product Classification) is a United Nations product classification system. The CPC is used in the schedule of market access commitments of countries when negotiating for WTO accession. CPC can also be found in bilateral and multilateral trade agreements. The CPC code is important for foreign investors because it contains commitments on market opening, the form of investment, and the conditions of the host country.

Number	Industry name	VSIC Code	CPC Code
1	Software publishing	5820	842 – Software implementation services
2	Computer Programming	6201	841 – Consulting services related to computer hardware installation 842 – Software implementation services 849 – Other computer services
3	Consulting on computers and administration of computer systems	6202
4	IT services and other services related to computers	6209
5	Data processing, leasing and related activities	6311	843 – Data processing services 844 – Database services
6	Portal	6312	843 – Data processing services
7	Other uncategorized information services	6399	There is no commitment

                                         

Conditions for foreign investors to establish an IT company in Vietnam

Due to limited market access for CPC 841, 842, 843 and 844 is over, foreign investors were allowed to set up 100% foreign-owned IT company in Vietnam. At the same time:

– Does not require investment in the form of joint venture or business cooperation contract;

– There are no conditions applied to foreign investors;

– IT companies meet the conditions prescribed by Vietnamese law on information technology.

Procedures for establish an IT company in Vietnam

Foreign investors make online information about the project on the National Information System on foreign investment. Within 15 days from the date of declaration, the investor submits an application file for the Investment Registration Certificate to the competent authority of Vietnam. The file includes documents specified in the 2014 Investment Law and its implementing documents. In case the dossier is complete and valid, within 15 working days from the date of receiving the dossier, the investment registration agency shall issue an Investment Registration Certificate (IRC) to the foreign investor.

Foreign investors must have an Investment Registration Certificate (IRC) to establish an IT company in Vietnam. After being granted the investment registration certificate, the foreign investor will prepare 01 set of documents including necessary documents to submit at the business registration office where the IT company is headquartered. After 03 working days from the date of receipt of the application, the Business Registration Office will issue a business registration certificate to the foreign investor (ERC).

Transfer of foreign investment into Vietnam

In accordance with provisions of applicable laws on foreign exchange control, foreign investors can open 01 capital investment account in foreign currency or Vietnam Dong (VND) at an authorized bank in Vietnam. All money transfers to Vietnam and from Vietnam to foreign countries must be carried out via wire transfer to the account of direct investment capital. In order to open a capital account, the investor needs an Investment Registration Certificate (IRC), an Enterprise Registration Certificate (ERC). Procedures for opening investment capital accounts shall comply with the regulations of the bank where the investors choose to open accounts.

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