Establishing foreign-invested companies to provide telecommunication services in Vietnam

After joining the big international trade organizations, Vietnam’s economy is growing strongly. After joining, our country has many preferential policies in many different industries to attract foreign investors. For the purpose of providing legal consultancy and assistance to enterprises, Viet An Law Firm would like to guide enterprises to carry out the procedures for establishing foreign-invested companies providing telecommunication services.

Legal basis:

• International treaties: WTO, FTAs, AFAS
• Law of Vietnam:
• Telecommunications Law 2009;
• Decree 25/2011 / ND-CP
• Decree 81/2016 / ND-CP amended Decree 25/2011 / ND-CP.

Conditions for establishing a foreign-invested company to provide telecommunication services:

*International treaties to which Vietnam is a member provide for:

– Scope of value added telecommunication services:

• Email
• Voicemail
• Online information and access retrieve information from a database
• Electronic data exchange (EDI)
• Value-added facsimile services, including storage and transfer, storage and recovery
• Convert code and protocol
• Online information and data processing (including transaction processing)
• Other services

– IAS Internet Access Service

– Ratio of foreign investors’ ownership in charter capital of a business organization:

• Services without network infrastructure: Not exceeding 65%. For foreign investors from ASEAN member countries, this ratio is 70%.
• Service with network infrastructure: not exceeding 50%

– Form of investment: Joint venture, business cooperation contract

– Vietnamese partners participating in the investment: Telecommunications service providers licensed in Vietnam for economic organizations providing network infrastructure services.

– Other conditions: 51% is in control of the management of economic organizations providing network-based services.

In the telecommunications industry, foreign investors entering into a business cooperation contract may sign a new agreement or switch to another form of presence with conditions no less favorable than those they are entitled to.

*Law of Vietnam:

• Form of investment: Joint venture or business cooperation contract. For telecommunication services with network infrastructure, Vietnamese partners must be telecommunications enterprises that have been licensed to establish telecommunication networks in Vietnam.
• An organization or individual that owns more than 20% of charter capital or shares in a telecommunications enterprise is not allowed to own more than 20% of the charter capital or shares of another telecommunications enterprise also doing business in a market. telecommunication service schools on the List of telecommunications services prescribed by the Ministry of Information and Communications.

Procedures for establishing foreign-invested companies providing value-added telecommunications services:

Applying for an investment registration certificate

Entities required applying for an Investment Registration Certificate:

• Investment projects of foreign investors;
• Economic organizations invest in establishing economic organizations; investment in capital contribution, purchase of shares or capital contributions of economic organizations; Investing under BCC in one of the following cases:
• Having foreign investors holding 51% or more of charter capital or most of the general partners are foreign individuals to economic organizations being partnerships;
• Having foreign economic organizations holding 51% or more of charter capital;
• There are foreign investors and foreign economic organizations holding 51% or more of charter capital.

Document includes:

• Written request for implementation of investment project;
• For individual investors: Valid copy of identity card, identity card or passport;
• For institutional investors: Valid copy of the Establishment Certificate or other equivalent documents certifying legal status;
• Proposal of an investment project includes the following contents: investor implementing the project, investment objectives, investment scale, investment capital and capital raising plan, location, duration, and schedule of investment. , labor demand, proposal of investment incentives, impact assessment, socio-economic efficiency of the project;
• Copy of one of the documents as follow: Financial statements of the latest 2 years of the investor; Commitment to financial support of the parent company; Commitment to financial support of financial institutions; Guarantee of financial capacity of the investor; Documents explaining the financial capacity of the investor;
• Proposal of land use demand; In case the project does not request the State to allocate, lease land, or permit the change of land use purpose, submit a copy of the venue lease agreement or other documents certifying that the investor has the right to use the venue to execute the investment project;
• Explanation on technology use for projects with projects using technology on the List of technologies restricted from transfer.

Duration for settlement:

• Within 15 days after receiving a complete dossier, the investment registration agency shall grant an investment registration certificate; In case of refusal, the investor must notify in writing the investor and clearly state the reason.

Authority to issue Investment Certificate: Department of Planning and Investment

 Applying for a business registration certificate

If a foreign investor contributes capital to a Vietnamese company to establish a company, the procedure as follows:

Step 1: Establish a Vietnamese company to register security service business:

Documents should be prepared:

• Application form for enterprise registration;
• Charter of company;
• List of members of limited liability companies or list of shareholders of joint-stock companies;
• Valid copy of one of the following document:
• Valid ID card or valid passport for individuals;
• Business registration certificate, for organizations and enclosed with personal identification papers, authorization documents of authorized representatives of organizations;
• The decision to contribute capital to the company’s members and corporate shareholders being organizations;
• Letter of authorization to provide company establishment services for Viet An Law.

Place of submission: Department of Planning and Investment where the company is headquartered.

Processing time: 05 – 07 working days.

Result: Business registration certificate.

Step 2: Foreign investors contribute capital, buy shares, or contribute capital to Vietnamese companies that have registered security service business.

Documents should be prepared:

• Document of capital contribution, share purchase, capital contribution;
• Copies of identity card, identity card or passport for individual investors; copy of the Establishment Certificate or other equivalent documents certifying the legal status for institutional investors;
• Authorization document for organization / individual to carry out the procedure.

Receiving body: Investment registration office where the company is headquartered.

Processing time: 15-25 working days since receipt of the valid application.

Results of the implementation of administrative procedures: Written notice

Applying for value added telecommunications service business license

Conditions for being granted telecommunications licenses:

• Having a business registration certificate or investment certificate of telecommunications service business;
• Having sufficient financial capacity, organizational structure and human resources suitable to the scale of the project;
• Having feasible technical plans and business plans suitable to the national telecommunications development strategy and planning, regulations on telecommunications resources, connection, rates, standards, technical regulations, network quality and telecommunications services;
• Take measures to ensure safety of telecommunications infrastructure and information security.

Dossier includes:

• An application for a license
• A valid copy, which may be a copy granted from the master register or a certified copy, of the business registration certificate or investment registration certificate for a foreign investor
• A copy of the business’s effective charter, which bears a certification seal of the business;
• A business plan for the first 5 years from the date of grant of a license,
• A technical plan corresponding to the business plan for the first 5 years from the date of grant of a license

Customers wishing to use legal services can refer to services related to the establishment of foreign-invested companies that Viet An Law Firm provides:

• Consultancy on the capital contribution ratio of foreign investors in Vietnam;
• Consultancy on choosing the right type of company for investors: Limited liability company with 100% capital or joint venture capital with Vietnam Company, head office address, capital, business lines, opening capital transfer account, term of capital contribution;
• Counseling on conditions and guiding investors to prepare necessary documents for setting up foreign-invested companies;

Consulting, drafting documents to set up companies for investors;