Establishing a 100% Foreign-Owned Technology Company in Ho Chi Minh City: Conditions, Procedures, and Legal Risks

Ho Chi Minh City (HCMC) is emerging as a leading technology hub in Southeast Asia, attracting a multitude of tech corporations, international startups, and global venture capitalists. With a vibrant innovation ecosystem, modern technological infrastructure, and open investment policies, establishing a 100% foreign-owned technology company in HCMC is becoming a notable trend for the 2025–2030 period.

However, the technology sector is subject to strict legal regulations, particularly concerning user data, intellectual property, cybersecurity, and investment sector limitations. The following article—from the perspective of an expert lawyer—will comprehensively analyze the conditions, legal procedures, and risks that foreign investors must consider when establishing a technology enterprise in HCMC.

Legal Framework and Investment Policies

From 2020 to 2025, Vietnam has promulgated and updated a series of new regulations to perfect the legal framework regarding foreign investment, technology enterprises, and cybersecurity. Key legal instruments include:

• Law on Investment 2020 (amended and supplemented in 2022)
• Law on Enterprises 2020
• Decree No. 31/2021/ND-CP guiding the implementation of the Law on Investment
• Law on Cybersecurity 2018
• Law on Intellectual Property (amended in 2022)
• Various Free Trade Agreements (CPTPP, EVFTA, RCEP)

  Under these regulations, foreign investors are permitted to establish technology companies in Vietnam with up to 100% foreign ownership, except in specific sectors related to national defense, security, or sensitive technologies.

Classification of Technology Sectors by Regulatory Level

Not all business lines within the technology sector are regulated equally. Depending on the nature of operations, technology sectors are divided into three main groups:

1. 1. Sectors fully open to foreign investment:

   • Software and application development

   • Software outsourcing

   • IT services and system maintenance provision

   2. Conditional sectors or sectors requiring appraisal:

   • Interactive user platforms (forums, social networks)

   • Data storage services for Vietnamese users (cloud, server hosting)

   • Cross-border e-commerce applications

   3. Restricted sectors or sectors requiring security assessment:

   • Financial Technology (FinTech)

   • Blockchain, cryptocurrency, and Artificial Intelligence (AI) applied to personal data

   • Mapping, navigation, and satellite services

   Accurately determining the standard industrial classification (SIC) codes for investment is a mandatory factor to avoid risks during the licensing process and subsequent operations.

Conditions for Establishing a 100% Foreign-Owned Techology Company

Investor’s Capacity

• The investor must demonstrate clear financial capacity and a transparent legal background.

• Provide a dossier proving experience or capacity in the technology sector (highly recommended).

• Must not fall under the restricted investment list and must have no history of violating Vietnamese or international laws.

Investment Capital

• The law does not prescribe a specific minimum capital requirement for the technology sector.

• However, for efficient operation, the proposed charter capital should be from 1 to 3 billion VND or more.

• Certain sectors require legal capital or an escrow deposit (e.g., FinTech, E-commerce).

Head Office

• The location of the head office must be legal (apartments and agricultural land cannot be used).

• Priority should be given to addresses within hi-tech parks or centralized IT parks to enjoy investment incentives.

• The lease agreement should have a minimum term of 1–2 years for the purpose of investment dossier appraisal.

Personnel and Intellectual Property

• Have a recruitment plan for domestic and foreign software engineers and technology experts.

• Execute the registration of intellectual property rights (software, trademarks, solutions, etc.).

• Implement internal policies on data privacy, source code anti-piracy, and digital asset protection.

Procedures for Establishing a foreign-owned technology company

Step 1: Applying for the Investment Registration Certificate (IRC)

• Submit the dossier at the HCMC Department of Planning and Investment (DPI).

• The dossier includes: Proposal for the investment project, investor’s profile, head office lease agreement, and financial statements.

• Processing time: 15–20 working days.

• An appraisal opinion from the Ministry of Information and Communications (MIC) may be required (for conditional sectors).

Step 2: Enterprise Registration and Applying for the Enterprise Registration Certificate (ERC)

• Select an appropriate corporate structure (Single-member Limited Liability Company, Two-member Limited Liability Company, Joint Stock Company, etc.).

• Complete the enterprise establishment registration dossier.

• Processing time: Approximately 5–7 working days.

• Upon completion, the company will be issued a tax code, a corporate seal, and can commence business operations.

Post-Establishment Legal Obligations

• Fully contribute the registered charter capital within 90 days as committed.

• Register for taxes, purchase electronic invoices, and open corporate bank accounts.

• Register labor usage, social insurance, and execute labor contracts in accordance with the Labor Code.

• Submit periodic investment activity reports to the DPI.

• If employing foreign workers: Apply for appropriate work permits and visas.

• If collecting and processing data of Vietnamese users: Strictly comply with the Law on Cybersecurity and regulations on personal data protection

Crucial Notes from Expert Lawyers

From the perspective of lawyers specializing in foreign investment consultancy in Vietnam’s technology sector, investors should carefully prepare for the following issues:

• Accurately define the type of services and technology the enterprise will provide to select the correct business line codes.

• Establish policies for intellectual property protection and user data management from the very beginning.

• Assess legal risks if the technology product integrates “sensitive” elements such as encryption, social networking, or personal data.

• Consider seeking prior consultation from relevant specialized ministries if the business falls under conditional sectors.

• Engage specialized legal advisory services to prepare standard dossiers and avoid application rejection

Investment Advisory Services for Foreign Investors at BKC Law

At BKC Law, we provide comprehensive advisory services for foreign investors seeking to establish enterprises, contribute capital, or implement investment projects in Vietnam. With a team of highly experienced lawyers specializing in investment, corporate, and specialized legal fields, BKC Law is committed to accompanying investors from the market research phase and selection of appropriate investment models, to the completion of all legal procedures and project operation. We focus particularly on conditional sectors such as technology, education, and finance—possessing a deep understanding of specialized regulations to ensure robust legal compliance and optimize the rights of foreign investors.

For free legal consultation regarding the investment sector at BKC Law, please contact our Lawyers via the information below:

• Phone: 0901 3333 41

• Email: info@bkclaw.vn

• District 1 Office: 9th Floor, Diamond Plaza Building, 34 Le Duan, District 1, Ho Chi Minh City

• Binh Tan Office: 41 Ten Lua, Binh Tan District, Ho Chi Minh City

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