From Application to Approval: Mastering Licensing Requirements for Foreign ICT Companies in Vietnam

In recent years, Vietnam has emerged as a hotspot for foreign Information and Communications Technology (ICT) companies looking to expand their operations in Southeast Asia. With a rapidly growing digital economy and a tech-savvy population, the country offers immense opportunities. However, navigating the licensing requirements can be a complex process. This comprehensive guide will walk you through the essential steps, challenges, and best practices for obtaining the necessary licenses to operate your ICT business in Vietnam.

1. Introduction

According to data from the Ministry of Information and Communications, Vietnam’s information and communication sector achieved revenue of over 3.7 trillion VND (approximately 154 billion USD) in 2023, marking a 1.49% increase compared to the same period in the previous year. This boom has attracted numerous foreign investors and companies eager to tap into the country’s potential. However, to operate legally and successfully in Vietnam, foreign ICT companies must obtain proper licensing, a process that requires careful navigation of the country’s regulatory landscape.To learn more about Vietnam’s IT infrastructure investment policies, including the licensing requirements and opportunities, please refer to Vietnam’s IT Infrastructure Investment Policies Explained.

2. Understanding Vietnam’s ICT Licensing Framework

Before diving into the application process, it’s crucial to understand the key regulatory bodies and the types of licenses required for different ICT services in Vietnam.

Key Regulatory Bodies:

• Ministry of Information and Communications (MIC): The primary authority overseeing the ICT sector in Vietnam. This ministry is responsible for setting policies, and regulations, and overseeing the ICT industry, including the telecom and IT sectors, in compliance with the Telecommunication Law (Clause 1, Article 69, Telecommunications Law).
• Ministry of Planning and Investment (MPI): The MPI handles the procedures related to foreign investment in Vietnam, including investments in the ICT sector. The ministry ensures compliance with local laws and regulations governing foreign enterprises, as stipulated in Decree No. 31/2021/ND-CP, which provides detailed guidelines for implementing the Investment Law (Article 6).
• Vietnam Telecommunications Authority (VNTA): Under the MIC, the VNTA is responsible for regulating telecommunications services. It oversees licensing and the quality of telecommunication services, ensuring they meet the standards outlined in Article 1 Decision 569/QD-BTTTT Stipulating the functions, tasks, powers and organizational structure of the Department of Telecommunications

Types of Licenses:

• Business Registration Certificate: Required for all foreign companies (Article 26 of the Enterprise Law 2020)
• Investment Registration Certificate: Necessary for foreign-invested projects (Article 37 of the Investment Law 2020)
• Specific ICT Licenses: Vary depending on the services offered (e.g., Network Infrastructure License, Internet Service License, etc.) (Article 33 of the Telecommunications Law)

3. Step-by-Step Guide to the Licensing Process

3.1 Pre-application Requirements

Before initiating the application process, ensure you have:

• A clear business plan outlining your ICT services in Vietnam
• Proof of financial capacity
• Technical documentation of your ICT services
• Legal representation in Vietnam (local partner or law firm)

3.2 Document Preparation and Submission

Prepare and submit the following documents:

• Application form (in Vietnamese)
• Company charter
• Financial statements
• Technical plans and specifications
• Certificates of incorporation from your home country

Tip: All documents must be translated into Vietnamese and notarized.

3.3 Application Review and Approval Stages

1. Initial screening by MIC
2. Detailed review by relevant departments
3. Requests for additional information or clarification (if needed)
4. A final decision by MIC

The entire process typically takes 30-60 days, depending on the complexity of your application and the type of license required.

4. Common Challenges and How to Overcome Them

4.1 Language Barriers

Solution: Partner with a local law firm or consultant who can assist with translations and communications.

4.2 Navigating Bureaucracy

Solution: Develop relationships with local officials and stay patient throughout the process. Understanding the cultural nuances can significantly smooth your path.

4.3 Meeting Technical and Financial Requirements

Solution: Ensure your technical plans are detailed and align with Vietnamese standards. Be prepared to demonstrate substantial financial capacity.

5. Post-Licensing Compliance and Reporting

Obtaining your license is just the beginning. To maintain compliance:

• Submit regular reports to MIC on your operations
• Adhere to Vietnam’s cybersecurity laws and data localization requirements
• Stay updated on regulatory changes affecting the ICT sector

6. Case Studies: Success Stories of Foreign ICT Companies in Vietnam

Several foreign ICT companies have successfully navigated Vietnam’s licensing process. For instance, a major U.S. cloud services provider obtained its license in 2020 after demonstrating its commitment to data security and local partnerships. Similarly, a European telecommunications company secured its license by emphasizing its plans for technology transfer and local workforce development.

In addition, several major Vietnamese companies have also received certification for their cloud computing platforms, such as Viettel, VNPT, and VNG. These platforms are recognized for meeting rigorous technical and security criteria and are playing a key role in Vietnam’s digital transformation. 

7. Conclusion: Key Takeaways for Successful Licensing

Mastering the licensing requirements for foreign ICT companies in Vietnam requires patience, thorough preparation, and a deep understanding of local regulations. By following this guide, partnering with local experts, and staying committed to compliance, your company can successfully navigate the licensing process and tap into Vietnam’s thriving ICT market.

FAQs

1. How long does the licensing process typically take? The process usually takes 30-60 days, but complex applications may require more time.
2. Can I operate in Vietnam while my license application is pending? No, you must wait for full approval before commencing operations.
3. Are there restrictions on foreign ownership in the ICT sector? Yes, some ICT subsectors have foreign ownership caps. It’s crucial to check the latest regulations for your specific area of operation.
4. What are the consequences of operating without proper licensing? Operating without proper licensing can result in fines, business closure, and potential legal action.
5. Can I appeal if my license application is rejected? Yes, you can appeal the decision or reapply after addressing the reasons for rejection.

By understanding and carefully navigating Vietnam’s ICT licensing landscape, foreign companies can position themselves for success in this dynamic and growing market. Remember, thorough preparation and local expertise are key to a smooth licensing process.

Harley Miller Law Firm “HMLF”

Address: 14th floor, HM Town Building, 412 Nguyen Thi Minh Khai, Ward 05, District 3, Ho Chi Minh City.

Phone: +84 937215585

Website: hmlf.vn

Email: miller@hmlf.vn