Conditions for establishing an information technology company in Vietnam

Information technology is becoming one of the prominent business fields today. To establish an information technology company, customers need to meet certain conditions. So what are the conditions for establishing an information technology company? To answer your questions, Viet An Law Firm offers the article on conditions for establishing an information technology company below.

Legal bases

• Schedule of commitments Vietnam in WTO.
• Law on Information Technology 2006.
• Investment Law 2020.
• Decree No. 151/2018/ND-CP amending and supplementing a number of decrees regulating investment and business conditions under state management of the Ministry of Finance.

What is Information Technology?

Information technology is a collection of scientific methods, modern technical means and tools – mainly computer engineering and telecommunications – aimed at organizing the efficient exploitation and use of natural resources. . . . Information is abundant and potential in all spheres of human activity and society.

Business lines of information technology company in Vietnam

Vietnamese law allows businesses to operate in industries not prohibited by law. However, enterprises are obliged to register business lines when establishing a company. Information technology companies need to register their business in industries including:

Market access conditions for information technology in Vietnam

Vietnam’s commitment to join the WTO

Based on Vietnam’s commitments in the WTO, when Vietnam joined the WTO, it committed to open the market for foreign investors to access the market for information technology services, some services such as telecommunications, software supply, etc. in Vietnam. However, there are still restrictions on the capital ownership ratio for foreigners. For example, for telecommunications, specifically for services without network infrastructure, currently only the contributed capital does not exceed 65% of the legal capital.

Conditions for establishing an information technology company

Conditions on the owner

Depending on the type of business that chooses when establishing an information technology company, the conditions for company ownership may have different conditions. Currently, the law is regulating 4 types of enterprises:

• Private company.
• One-member limited liability company or limited liability company with 2 or more members.
• Joint stock company.

For private companies and partnerships, the owners can only be individuals, limited companies and joint stock companies, the owners can be individuals or organizations.

Conditions for owners of information technology companies for individuals and organizations are currently stipulated in the Enterprise Law 2020, according to which organizations and individuals participating in the establishment of enterprises must have full civil act capacity: For organizations, they must be organizations with legal status,  for individuals, they shall not be declared by the Court to have lost civil act capacity or have limited civil act capacity.

Owners of information technology companies must also satisfy the conditions that they are not prohibited by the State from establishing or participating in enterprises, including those specified in Clause 2, Article 17 of the Enterprise Law 2020 as follows:

• State agencies and units of the people’s armed forces shall use state assets to establish profit-making business enterprises for their own agencies and units.
• Officers, civil servants, public servants.
• Officers, non-commissioned officers, professional soldiers, workers and defense officials in agencies and units of the Vietnam People’s Army; officers, professional non-commissioned officers, police workers in agencies and units under the Vietnam People’s Police, except those who are appointed as authorized representatives to manage the State’s capital contribution at enterprises or management at state-owned enterprises.
• Professional leaders and managers in state-owned enterprises, except those who are appointed as authorized representatives to manage the State’s capital contribution in other enterprises.
• Persons who have lost civil act capacity or have limited civil act capacity; people with difficulties in perception, mastery of behavior; minors.
• The organization has no legal status.
• Persons who are being examined for penal liability, are detained, are serving prison sentences, are serving administrative handling measures at compulsory detoxification establishments or compulsory education institutions or are prohibited by courts from holding offices, practicing professions or doing certain jobs; other cases as prescribed by the Bankruptcy Law and the Law on Anti-Corruption.
• Organizations being commercial legal entities are prohibited from doing business or operating in certain fields in accordance with the provisions of the Criminal Code.

Capital conditions

If the law requires legal capital, the charter capital when establishing an information technology company must be at least equal to the legal capital of the business line.

If the law does not require legal capital, the information technology company can freely choose the charter capital level to establish the company, because the law does not have a minimum capital level.

The level of registered charter capital should be appropriate and corresponding to the reality of the company so that it can be more convenient in doing business, because if the registration is too low, even if the law does not prohibit it, the company may also face difficulties when trading, working with business partners,  Banks, tax authorities may not be trusted, do not want to transact and cooperate.

Seal conditions

According to Article 43 of the Enterprise Law in 2020, the seal of an information technology company exists in 02 forms, including:

• The seal is made at the seal engraving facility.
• Seals in the form of digital signatures in accordance with the law on e-transactions.

The Company reserves the right to decide on the type, quantity, form and content of the seal and is not required to notify the seal sample. However, the management, use and retention of the seal of the company or information technology company must comply with the provisions of the company’s charter and regulations issued by the company, branch, representative office or other unit of the company bearing the seal.

Headquarters conditions

Information technology companies headquartered in Vietnam need to have an address that is a legal place of business, which can be the property of the enterprise, or rented or borrowed with full documents.

The address must be clearly identified including the number of houses, niches, alleys, alleys, streets/streets or villages/hamlets/communes/wards/townships, districts/districts/cities/towns, provinces/centrally-run cities; telephone number, fax number and email (if applicable).

If the headquarters of an information technology company is located in an apartment, note that the apartment must have a business function. As for other addresses, just need to specify the address clearly and be used in accordance with the law, it is completely possible to choose to locate the head office of the information technology company.

Company name conditions

The name of the information technology company can be Vietnamese or foreign. If the company has a name in a foreign language, the name in a foreign language of the company shall be printed or written in a smaller font size than the Vietnamese name at the head office, branch, representative office, business location, or on transaction papers, documents and publications issued by the information technology company.

The name of an information technology company must not coincide or cause confusion with another company registered on the business registration portal, applicable nationwide.

In order to comply with the provisions of the law, the name of an information technology company must ensure at least two elements: Type of enterprise and proper name.

Information technology company establishment fee in Vietnam

The fees for establishing an information technology company and posting a statement when establishing a company at the National Business Registration Portal are as follows: VND 100,000/time for applications submitted electronically at the time of submission.

In addition, the company also needs to prepare costs for a number of things such as buying invoices, carrying out procedures for issuing financial invoices, buying digital signatures.

If you want to establish an information technology company, please contact Viet An Law Firm for the best support!