Market Access Conditions - Electronic Game Business

Market Access Conditions for Foreign Investors when Doing Electronic Game Business in Vietnam

According to Vietnam's current regulations on electronic games, foreign online electronic game service providers must establish an enterprise in accordance with the provisions of the Law on Enterprises to provide services in Vietnam. The Specific Commitments on Services of the Working Group on Vietnam's Accession to the WTO ("Vietnam's WTO Commitments") only allow foreign investors to own a maximum of 49% of the charter capital of companies providing these services. The commitments in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) continue to allow foreign investors from CPTPP member countries to own up to 51% of charter capital in e-game companies from 2019.

However, from 14 January 2024, foreign investors from CPTPP member countries can own up to 100% of charter capital in e-game companies in Vietnam.

Specifically as follows:

Currently, Decree 147/2024/ND-CP on management, provision and use of Internet services and online information specifically stipulate that foreign online e-game service providers must establish a local enterprise to provide services in Vietnam. The foreign ownership ratio in these companies must comply with international treaties to which Vietnam is a member.

According to Vietnam's Commitments on Services to the WTO, foreign investors are allowed to conduct electronic game business (CPC 964**) in the form of a business cooperation contract or joint venture with a licensed Vietnamese partner to provide this service. In which, the foreign capital contribution must not exceed 49% of the charter capital of the joint venture.

Because Vietnam is a member of the CPTPP, foreign investors from a CPTPP member country can apply the market access conditions stipulated in the CPTPP instead of Vietnam's Commitments to the WTO. Specifically, according to Appendix 1 of Vietnam's CPTPP commitments, the market access conditions for foreign investors in the field of electronic games are as follows:

• Allow foreign investment of up to 51% of charter capital in enterprises providing electronic game services via the Internet.
• 5 years after the date of entry into force of the CPTPP for Vietnam, the foreign ownership restriction on electronic game services will be removed.

The CPTPP entered into force for Vietnam on 14 January 2019 and therefore, 14 January 2024 will be considered as 5 years from the date of entry into force of the Agreement. Therefore:

• From 14 January 2019, foreign investors from CPTPP member countries can own up to 51% of the charter capital in Vietnamese companies providing electronic games over the Internet.
• From 14 January 2024, foreign investors from CPTPP member countries can own up to 100% of the charter capital in gaming companies providing electronic games over the Internet.

In addition, foreign investors must also meet general business conditions according to specialized legal documents of Vietnam.

The above is the consultation of Gia Luat related to the market access conditions for the electronic game business industry. If you have any questions or a need to use legal services related to the establishment of a foreign-invested enterprise, please contact Gia Luat for detailed advice and the best support.