SBLAW would like to provide legal opinion regarding to the legality of designing gaming solution for wagering online sport as below:
1. SPECIFIC COMMENTS ON THE LEGALITY OF THE PROJECT
1.1. Legality of designing game online
It can be said that there is no complete legal framework for online gaming in place in Vietnam. But the Laws concerning on online games are:
Law on Information Technology No. 67/2006/QH11 passed by the National Assembly of the Socialist Republic of Vietnam on 29th June 2006;
Joint Circular No. 60/2006/TTLT-BVHTT-BBCVT/BBA dated 01st June 2006 on management of game online;
Decree No. 97/2008/ND-CP dated August 28, 2008, on the management, provision and use of Internet services and electronic information on the Internet;
Decree No. 72/2013/ND-CP dated July 15, 2013 of the Government on management, provision and use of Internet services and online information.
The Decree 72/2013/ND-CP has replaced the Joint Circular and the Decree 97/2008. But there is the Draft Decree on the Management Supply and Use of Internet Services and Information
Content on Networks which would replace the above mentioned Decrees and Circulars. With the new Decree there shall be a more clarity on the regulations regarding online gaming activities and related activities.
The laws are applicable to the enterprises and individuals producing online games, enterprises providing online game services, internet access service providers, internet agents and users of online game services. Accordingly, following act1 shall be prohibited under Vietnam Law:
a) Importation, producing and provision of online games with the following contents:
Inciting the people to oppose against the State of the Socialist Republic of Vietnam, undermining the national solidarity bloc;
Provoking violence, spreading propaganda about wars of aggression, sowing hatred among nations and peoples, arousing obscenity, debauchery and crime;
Disclosing state secrets, defense, security, economic and foreign relations secrets and other secrets provided for by law;
Supplying untrue information, distorting, slandering and infringing upon the prestige of organizations as well as honor and dignity of citizens.
b) Providing online game services or acting as online game service-providing agents in Vietnam without permission of competent state management agencies.
c) Advertising and introducing online games which have not yet been permitted for circulation in Vietnam.
Thus is legal for Client to design gaming solution for wagering online sports for exportation and not for use in Vietnam.
2.2. Setting up Office in Vietnam for designing game online
In case Client wishes to setup an office in Vietnam to conduct designation of such gaming solution, Client shall be required to obtain the Investment Certificate for establishment of 100% Foreign Owned Company (FIC). Business activities of this FIC shall be development and production of software products.
1 Article No. 3 of Joint Circular No. 60/2006/TTLT-BVHTT-BBCVT/BBA dated 01st June 2006 on management of game online.
According to Point b, Item 1 of Article No. 15 of the Decree No. 218/2013/ND-CP dated 26 December 2013 of the Government guiding on Corporate Income Tax Law, FIC manufacturing software can enjoy Corporate Income Tax (“CIT”) Exemption in 4 years from the establishment of FIC, Deduction of CIT up to 50% in 9 years after completing period of tax exemption and favored CIT Rate of 10% in 15 years.
With the respect to capital required for FIC operating in the Software Industries, Vietnam Law does not stipulate any minimum capital rate.
However, according to our experience, you should consider an amount of 80,000USD (Eighty thousand US Dollar). Client can complete capital contribution within 36 months from the establishment of FIC in case FIC is structured under the form of Limited Liability Company. Despite of that, competent authority may suggest Client to complete its capital contribution within 12 months from the establishment of FIC.
1.3. CONCLUSION
– It is legal for Client to design gaming solution for wagering online sports for exportation and not for use in Vietnam.
However, we also would like to note that such game must not consist of any content
(i) Inciting the people to oppose against the State of the Socialist Republic of Vietnam, undermining the national solidarity bloc,
(ii) Provoking violence, spreading propaganda about wars of aggression, sowing hatred among nations and peoples, arousing obscenity, debauchery and crime,
(iii) Disclosing state secrets, defense, security, economic and foreign relations secrets and other secrets provided for by law and/or
(iv) Supplying untrue information, distorting, slandering and infringing upon the prestige of organizations as well as honor and dignity of citizens.
– Client can consider setting up a wholly foreign invested company in Vietnam for designing game online.
It shall be classified to the business activities of software production.
– The FIC manufacturing software products in Vietnam shall be entitled to Corporate Income Tax (“CIT”) Exemption in 4 years from the establishment of FIC, Deduction of CIT up to 50% in 9 years after completing period of tax exemption and favored CIT Rate of 10% in 15 years
