Are you planning to establish an IT company in Vietnam but unsure about the legal requirements? From foreign ownership rules and licensing procedures to data protection and tax compliance, Vietnam’s IT sector offers great opportunities—but also complex legal obligations. This guide explains the key legal considerations you must understand before starting an IT business in Vietnam.
Vietnam has emerged as a major technology hub in Southeast Asia, attracting foreign investors in software development, IT outsourcing, fintech, AI, and digital platforms. While the IT sector is generally open to foreign investment, it is governed by multiple laws, including the Law on Investment, Law on Enterprises, Cybersecurity Law, and regulations on data protection and intellectual property.
Establishing an IT company in Vietnam requires more than just business registration—it involves careful compliance planning from the outset.
In principle, most IT services are open to foreign investors and do not require a Vietnamese partner. These include:
Software development and programming
IT outsourcing and offshore development services
SaaS platforms and cloud-based solutions
AI, blockchain, and data analytics services
IT consulting and system integration
However, certain sub-sectors—such as telecommunications services, fintech, e-payment platforms, and online gaming—may be subject to additional conditions, licenses, or ownership restrictions.
Foreign investors must therefore clearly define their IT business scope before incorporation.
Foreign investors establishing an IT company in Vietnam typically choose one of the following structures:
100% foreign-owned company (most common for IT businesses)
Joint venture with a Vietnamese partner (optional, not mandatory for most IT services)
The most common corporate forms are:
Limited Liability Company (LLC)
Joint Stock Company (JSC)
For startups and technology companies, an LLC is often preferred due to simpler governance and flexibility.
The licensing process depends on whether the investor is foreign or domestic, and whether the IT activities fall under conditional business lines.
Foreign investors must apply for an Investment Registration Certificate (IRC) before establishing the company. The IRC approves the investment project and includes:
Business objectives and IT service scope
Investment capital
Company location
Project duration
Capital contribution timeline
If the IT services involve sensitive areas such as cybersecurity, fintech, or cross-border data processing, authorities may request additional explanations.
After obtaining the IRC, investors apply for the Enterprise Registration Certificate (ERC) to legally establish the company. The ERC confirms:
Company name and address
Legal representative
Charter capital
Ownership structure
Registered business lines
Only after receiving the ERC does the IT company legally exist and may operate.
Accurate registration of IT business lines is critical. Commonly registered codes include:
Software production and development
Computer programming services
IT consulting and system management
Data processing and hosting services
Incorrect or vague business line registration may later restrict operations or delay licensing for additional activities.
Beyond establishment, IT companies in Vietnam face several ongoing legal obligations that directly affect operations and risk exposure.
Vietnam has significantly strengthened its data protection framework. IT companies—especially those handling user data—must comply with:
Cybersecurity Law
Decree on Personal Data Protection
Requirements on data collection, storage, and processing
Key obligations include:
Obtaining user consent for data processing
Implementing data security measures
Appointing responsible personnel for data protection
Reporting data breaches when required
Companies providing cross-border data services or platforms may be required to store certain data locally in Vietnam.
For IT businesses, intellectual property (IP) is often the most valuable asset. Key legal considerations include:
Registering software copyrights
Protecting source code and algorithms
Drafting IP ownership clauses in employment contracts
Ensuring IP assignment from developers and contractors
Failure to secure IP ownership may lead to disputes, especially when working with outsourced developers or freelancers.
Vietnam has a young and skilled IT workforce, but employers must comply with labor regulations, including:
Written labor contracts
Proper classification of employees vs. contractors
Overtime and working-hour compliance
Mandatory social insurance contributions
For foreign experts and engineers, work permits or work permit exemptions may be required.
IT companies in Vietnam must comply with:
Corporate income tax
Value-added tax (VAT)
Withholding tax for cross-border services
Foreign-invested IT companies—especially those providing services to parent companies—must also comply with transfer pricing regulations and maintain proper documentation.
Tax incentives may be available for certain high-tech or software projects, but eligibility must be assessed carefully.
Foreign investors often face avoidable risks due to misunderstanding Vietnam’s regulatory environment.
Common issues include:
Registering overly broad or incorrect IT business lines
Ignoring data protection obligations
Failing to structure IP ownership properly
Underestimating labor compliance costs
Not planning for tax and transfer pricing risks
Delaying post-establishment compliance procedures
These mistakes may not surface immediately but can create serious problems during audits, due diligence, or future investment rounds.
Some IT business models require additional licenses, such as:
Fintech platforms
Online payment intermediaries
Online gaming services
E-commerce platforms with marketplace functions
Operating without proper licensing may result in penalties or forced suspension.
DEDICA Law provides comprehensive legal services tailored to IT startups, software companies, and foreign-invested technology enterprises.
Structuring IT investments and selecting the right entity type
Preparing IRC and ERC applications
Advising on IT business line registration
Data protection and cybersecurity compliance
IP protection strategies for software and technology
Employment and work permit advisory
Ongoing legal counsel for growth and fundraising
Our lawyers have experience working with international tech companies and understand both global standards and Vietnam’s regulatory nuances.
Deep expertise in foreign investment and technology law
Practical, business-oriented legal advice
Clear guidance on compliance and risk management
Experience supporting startups and multinational IT firms
Long-term legal partnership beyond company setup
DEDICA Law focuses on helping IT businesses build a legally secure and scalable foundation in Vietnam.
Vietnam offers enormous opportunities for IT businesses, but legal compliance is essential from day one. Understanding investment licensing, data protection, IP ownership, labor regulations, and tax obligations will help investors avoid costly mistakes and focus on growth.
Are you planning to establish an IT company in Vietnam?
Contact DEDICA Law for professional legal guidance tailored to technology and digital businesses.
📞 Hotline: (+84) 39 969 0012 (Available via WhatsApp, WeChat, Zalo)
🕒 Working Hours: Monday – Friday (8:30 – 18:00)
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