Vietnam has gone through tremendous digital transformation in the past five years and the IT sector has seen substantial growth. This positive change has pushed Vietnam in becoming a digital economy and a digital society. As a result, the number of IT companies in Vietnam has been on the rise, and Vietnam is crowned the IT nation of Southeast Asia in 2020. In 2019, Vietnam’s Information and Communications Technology (ICT) industry achieved an estimated total revenue of US$112.35 billion.
Benefits of Starting an IT Company in Vietnam
Since the government in Vietnam wants to push the IT sector in the country to a brand new height, they provide attractive benefits in the form of incentives to IT companies in Vietnam to encourage more investments into the sector.
These incentives can be in these formats:
- Four years of corporate income tax exemption
- Eleven years of reduced corporate income tax following the four-year corporate income tax exemption
However, an IT company in Vietnam can only take advantage of the incentive benefits when they fulfill certain criteria. Only the following types of IT companies are qualified for incentives:
- Digital information products
- Software production products
- Key IT products
- Software services
- Information security incident correction services
- Information security protection services per IT law in Vietnam
How to Start an IT Company in Vietnam
In Vietnam, foreign ownership in the IT sector is permitted under the Vietnamese Law on Investment. The authority will simplify the process of starting a foreign IT company in Vietnam starting from January 2021.
For foreign investors considering start a foreign limited liability company (LLC) in Vietnam, below are the requirements you must adhere to:
- A business address for company registration. A valid business address is compulsory to register an IT business in Vietnam. For the IT sector, you can also utilise a virtual office address. The IT parks in Hanoi, Da Nang, and Ho Chi Minh City are hosting the most IT companies with physical offices.
- A minimum of one (1) founder. A foreign LLC must have a minimum of one founder. However, the number of founders must not be more than fifty (50).
- A resident director. A foreign LLC shall have a resident director. A work permit is mandatory if the resident director is a foreigner and is not a company founder.
- Personal documents of founders. The submission should include every founder’s certified passport copy and bank statement copy.
- No minimum but reasonable capital. Vietnam’s government does not set a minimum capital required for IT companies. However, a reasonable amount of capital must be part of the proposal and it shall be able to cover all expenses and costs incurred until the IT company starts generating a profit.
- Investment Registration Certificate (IRC). All foreign LLCs must obtain an IRC from the Department of Planning and Investment.
- Business Registration Certificate (BRC). All foreign LLCs must obtain a BRC from the Department of Planning and Investment.
Doing an IT Business Without Setting up a Company in Vietnam
There are alternative ways to do IT business in Vietnam other than just setting an IT company:
- Hire remote IT workers and software developers in Vietnam through the Employer of Record (EOR)
- Establish an offshore company or a representative office in Vietnam
How Cekindo can Assist
There are several requirements and benefits associated with starting an IT company in Vietnam. Cekindo’s one-stop solution can help you get familiar with the details, reliably guide you through the business registration process, and keep you on the right track to your business success. We have your best interest at heart.
Let Cekindo’s legal and business consulting team strip you of the responsibilities and worries regarding the establishment of your IT company in Vietnam. We do the heavy lifting for you so that you can do what you do best – growing your business. We can also help you with the company post-registration solutions including tax reporting and filing, immigration, permit, and license application, and so much more.
Start your IT company in Vietnam with peace of mind with Cekindo. Complete the form below.