Under the Degree No. 25/2011/ND-CP dated 06 April 2011 of Vietnam Government detailing and guiding the implementation of a number of articles of the telecommunication law, Voice Call and SMS Messaging Service are classified to basic telecommunication services.
In case, the Foreign Investor wish to provide basic telecommunication services in Vietnam Territory without setting up network infrastructure, foreign investors are allowed to jointly venture or cooperate the business on the basis of contracts with enterprises established in Vietnam.
Thus, it is impossible for foreign investor to set up a joint venture company with a local natural person for providing Voice Call and SMS Messaging Service in Vietnam.
According to Vietnam’s Commitments entering WTO, Foreign Ownership in a foreign invested company (FIC) providing telecommunication services without setting up network facility must not exceed 65% of total investment capital.
We also would like to note that telecommunication services are considered as sensitive services which may affect security and national defense of Vietnam.
Thus, generally, Vietnamese Government shall be cautious reviewing the application for setting up FIC providing telecommunication services in Vietnam.
According to our practical experiences in previous cases, the possibility of incorporation of FIC in this field shall be much depended on following factors:
- Although Vietnam Law does not impose any minimum rate of charter capital for the above mentioned business activities. Accordingly, the foreign investor shall be self responsible for its estimate of sufficient charter capital to be injected into the Company in Vietnam for running its business project. You shall be required to prepare a business plan in the first five years from the date of licensing include the following contents: Market analysis and forecast, business scheme, revenue, total expenditure for investment, expenditure for each year; the form of investment, scheme to raise capital; human resources in order to prove that your proposed investment capital shall be sufficient for the business activity of the FIC.
- Investor who acts as owner or shareholder of the Company in Vietnam must provide sufficient evidence that it has good experience in the field, especially those relating to the business activities to be conducted in Vietnam.
We would like to note that the Licensing Authority may ask you to provide a proposed technical plan corresponding to the business plan in the first five years from the date of licensing include the following principal contents: network configuration, equipment for each year, both the main parts and the backup parts; analysis of network capacity, equipment, capacity of transmission lines, telecommunication resources, technologies, standards, applicable technical norms; measures to ensure service quality and information safety or security.
In addition, MOU or In-principle Contract with licensed mobile operators in Vietnam regarding lease of network facility for providing telecommunication services will be favored.
