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The investment conditions for basic telecommunication services for foreign investors
What are the investment conditions for basic telecommunications services for foreign investors in Vietnam? To learn in detail the conditions for basic telecommunications service business with foreign investment, please join Siglaw in referring to the article below:
What is a basic telecommunications service?
Currently, Vietnamese law classifies telecommunications services into basic telecommunications services and value-added telecommunications services. In particular, the service industries in the list of basic telecommunications services are regulated in Clause 1, Article 9 of Decree 25/2011/ND-CP:
“Article 9. Classification of telecommunications services
Basic telecommunications services include:
- a) Voice service;
- b) Fax service;
- c) Data transmission service;
- d) Image transmission service;
đ) Messaging service;
- e) Video conferencing service;
- g) Leased line service;
- h) Internet connection service;
- i) Other basic telecommunications service according to regulations of the Ministry of Information and Communications.”
Legislation to regulate investment in basic telecommunications services with foreign capital
Foreign investors who want to invest in basic telecommunications services will need to meet investment conditions according to the provisions of Vietnamese law and international treaties of which Vietnam is a member. Specifically, foreign investors’ investment in basic telecommunications services will be governed by the following documents: Investment Law 2020, Telecommunications Law 2009, WTO Commitment Schedule, Free Trade Agreements FTAs, and ASEAN Framework Agreement on Services AFAS.
Conditions for investment in basic telecommunications services according to international regulations (According to WTO, FTAs, AFAS)
- Service industries: WTO, FTAs, AFAS apply these conditions to services: Voice service (CPC 7521); Leased line service (CPC 7522** + 7523**); Packet switching data transmission service (CPC 7523**); Circuit-switched data transmission service (CPC 7523**), Telex service (CPC 7523**), Facsimile service (CPC 7521** + 7529**); Telegraph service (CPC 7523**)
- Conditions on charter capital ownership ratio of foreign investors in economic organizations. For services without network infrastructure, foreign investors are not allowed to own charter capital exceeding 65%, and for services with network infrastructure, it cannot exceed 49%.
Conditions for investment in basic telecommunications services according to Vietnamese law
In case a foreign investor first time invests in basic telecommunications services
Foreign investors coming to Vietnam and investing in telecommunications services for the first time will need to pay attention to meeting the following conditions if they want to invest in this field:
- Investors have an investment project and carry out investment registration or investment verification procedures at the state management agencies on investment to be granted an Investment Certificate and Business Registration Certificate. Currently, the competent authority to issue Investment Certificates is the Investment Department of the Department of Planning and Investment; Management boards of industrial parks, export processing zones, high-tech zones, economic zones and investment registration agencies in the provinces.
- Licensed to operate telecommunications services by the Ministry of Information and Communications. Have a Certificate of Business Registration or Certificate of Investment in Telecommunications Services;
- Have sufficient financial capacity, organizational structure and human resources appropriate to the scale of the project;
- Take measures to ensure the safety of telecommunications infrastructure and information security.
- The investor has prepared detailed technical plans and feasible business plans appropriate to Vietnam’s telecommunications development strategy and planning, regulations on telecommunications resources, connections, tariffs, standards, technical regulations, network quality and telecommunications services;
- Legal capital will vary depending on the type of telecommunications network the foreign investor plans to establish, ranging from 5 – 500 billion VND. The level of committed investment capital needs to be guaranteed according to the regulations of each type of telecommunications network the foreign investor intends to establish, from 15 – 2,500 billion VND
In case a foreign-invested enterprise established in Vietnam conducts investment and business activities in telecommunications services
In this case, investors will have to meet the following two conditions
- Enterprises must carry out procedures to amend and supplement the business registration certificate and investment registration certificate that the enterprise already has;
- Enterprises must meet the conditions to apply for a telecommunications service sublicense as in the case of the first investment mentioned above.
Siglaw is always ready to give advice and support customers with necessary information during the process of carrying out procedures to change the investor’s address. Please contact Siglaw law firm for specific advice
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- vphn@siglaw.com.vn
- vphcm@siglaw.com.vn
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