Are you planning to establish a 100% foreign-owned software company in Vietnam? What legal procedures, licenses, and compliance requirements must you complete to operate lawfully? Vietnam is one of Southeast Asia’s fastest-growing technology hubs, but foreign investors must follow a clear legal roadmap. This guide explains the latest step-by-step procedures and key legal considerations for setting up a fully foreign-owned software company in Vietnam.
Vietnam strongly encourages foreign investment in the technology and software sector. Under the Law on Investment and Vietnam’s WTO commitments, software development and IT services are not restricted business lines. This means foreign investors are legally allowed to establish 100% foreign-owned software companies without the need for a Vietnamese partner.
Common software activities open to full foreign ownership include:
Software development and programming
Software outsourcing and offshore development
SaaS platforms and cloud-based solutions
Mobile and web application development
IT consulting and system integration
AI, data analytics, and blockchain development
However, foreign investors must clearly define their business scope. Certain sub-sectors—such as fintech, e-payment services, online gaming, or telecommunications—may require additional licenses or approvals.
Establishing a foreign-owned software company in Vietnam involves two main licensing stages, followed by post-establishment compliance.
Before filing any application, foreign investors should precisely identify:
The type of software services to be provided
Whether the business involves data processing or cross-border services
Whether the software connects to finance, gaming, or telecommunications
Whether the company will serve Vietnamese or international clients
A clearly defined scope helps authorities assess whether the business is eligible for 100% foreign ownership and avoids future licensing complications.
The Investment Registration Certificate (IRC) is mandatory for foreign investors establishing a company in Vietnam.
The IRC application typically includes:
Investor information (individual or corporate)
Proof of financial capacity
Project description and business scope
Investment capital and capital contribution timeline
Office location or lease agreement
Project duration
For software projects, authorities usually apply a favorable review process, as the sector is encouraged. However, if the project involves sensitive data or online platforms, additional explanations may be requested.
The IRC approval timeline is typically 15–20 working days.
Once the IRC is approved, the investor must apply for the Enterprise Registration Certificate (ERC) to legally establish the company.
The ERC includes:
Company name and registered address
Legal representative
Charter capital
Ownership structure (100% foreign-owned)
Registered business lines related to software services
After receiving the ERC, the company is legally recognized and may proceed with operational setup.
Correct business line registration is critical for software companies. Commonly registered activities include:
Computer programming services
Software production and development
IT consulting and system administration
Data processing and hosting services
Incorrect or vague registration may restrict the company’s ability to sign contracts, apply for additional licenses, or receive investment later.
After incorporation, the company must open:
A Direct Investment Capital Account (DICA) for foreign capital
A regular operating bank account
Foreign investors must contribute capital through the DICA, in accordance with the timeline stated in the IRC and ERC. Failure to meet the capital contribution deadline may result in penalties or capital adjustment requirements.
Establishing the company is only the beginning. Software companies must comply with several ongoing legal obligations.
Vietnam has strengthened its data protection regime. Software companies handling user data must comply with:
The Cybersecurity Law
Personal Data Protection regulations
Data consent and storage requirements
Key obligations include:
Obtaining user consent for data processing
Implementing data security measures
Reporting data breaches when required
Storing certain data locally if mandated
Cross-border data processing and cloud services must be carefully structured to remain compliant.
Intellectual property is a core asset of any software company. Legal safeguards should include:
Registering software copyrights
Clear IP ownership clauses in employment contracts
Assignment of IP from developers and contractors
Confidentiality and non-compete agreements
Without proper IP structuring, foreign investors risk losing ownership of critical software assets.
Software companies in Vietnam often employ both local engineers and foreign experts. Employers must comply with:
Labor contracts in Vietnamese
Working hour and overtime rules
Social insurance obligations
Personal income tax requirements
Foreign employees generally require work permits, unless eligible for exemption.
Foreign-owned software companies must comply with:
Corporate income tax
Value-added tax (VAT)
Withholding tax for cross-border payments
Companies providing services to parent companies or related entities must also comply with transfer pricing regulations and maintain proper documentation.
Certain software and high-tech projects may qualify for tax incentives, subject to approval.
Foreign investors frequently encounter issues due to misunderstanding Vietnam’s regulatory environment.
Registering overly broad or inaccurate software business lines
Ignoring data protection obligations
Failing to protect IP ownership properly
Missing capital contribution deadlines
Overlooking labor compliance for foreign staff
Assuming all IT activities are license-free
These mistakes can delay operations, trigger penalties, or complicate future fundraising.
DEDICA Law provides end-to-end legal support for foreign investors establishing software companies in Vietnam.
Structuring 100% foreign-owned software investments
Preparing and submitting IRC and ERC applications
Advising on software business line registration
Data protection and cybersecurity compliance
IP protection strategies for software products
Employment and work permit advisory
Ongoing legal support for scaling and investment rounds
Our lawyers have experience working with international tech companies and understand both global standards and local regulatory practices.
Strong expertise in foreign investment and technology law
Practical, business-oriented legal advice
Clear timelines and transparent fees
Experience supporting startups and multinational software companies
Long-term legal partnership beyond incorporation
DEDICA Law helps software companies build a compliant, scalable, and investment-ready foundation in Vietnam.
Vietnam offers exceptional opportunities for foreign investors in the software and technology sector. With full foreign ownership permitted, the market is open—but compliance with investment licensing, data protection, labor laws, and tax regulations is essential.
Understanding the correct procedures from the beginning helps investors avoid risks and focus on growth.
Are you planning to establish a 100% foreign-owned software company in Vietnam?
Contact DEDICA Law for professional legal guidance and a smooth company setup process.
📞 Hotline: (+84) 39 969 0012 (Available via WhatsApp, WeChat, Zalo)
🕒 Working Hours: Monday – Friday (8:30 – 18:00)
Contact us today for a free initial consultation with our experienced lawyers!
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