Establishing a software company Vietnam operations run from is one of the most straightforward foreign investments available, and one of the best incentivised. Software production is open to full foreign ownership, carries no minimum capital, and attracts one of the most generous corporate income tax incentive packages in the country.
The complications are not in licensing but in intellectual property assignment, employee equity and cross-border billing. This guide covers all six.
Software Company Vietnam: Ownership and Licensing
Software production and information technology services are open to one hundred per cent foreign ownership, and no sub-licence is required to develop software or provide development services. The company needs only an investment registration certificate and an enterprise registration certificate.
Care is needed where the model extends beyond development. Operating a platform on which third parties transact, providing payment services, or distributing hardware each pull in additional approvals. Registering only the lines actually needed at launch keeps a software company Vietnam licence on the ten-working-day track under Decree 96/2026/ND-CP.
Software Company Vietnam: Tax Incentives for Software Production
Software production is an incentivised activity attracting preferential corporate income tax treatment, with a reduced rate for a defined period followed by exemption and reduction years. Concentrated information technology parks and high-tech zones offer further location-based incentives.
The incentive attaches to qualifying revenue, so the company must be able to demonstrate that its output is software production rather than general outsourcing or staffing. Contract drafting, timesheet records and product documentation are what an audit examines. Our note on zone tax incentives covers the location-based route.
Software Company Vietnam: Intellectual Property Assignment
Under Vietnamese law, ownership of work created by an employee in the course of employment depends on the contractual position, so express assignment language in labour contracts and contractor agreements is essential. Groups that assume default vesting in the employer frequently find gaps during diligence.
Where the Vietnamese entity develops for an offshore parent, the assignment should be documented in a development agreement priced on arm’s length terms, because the transaction is a related party transaction within Decree 132/2020/ND-CP as amended by Decree 20/2025/ND-CP. Our intellectual property team handles the assignment chain.
Software Company Vietnam: Cost-Plus Billing and Transfer Pricing
Development centres are commonly remunerated on a cost-plus basis. The mark-up must be defensible by benchmarking, and the documentation must exist contemporaneously rather than being assembled when a query arrives.
A mark-up set too low attracts adjustment; set too high it erodes the value of the software incentive by inflating taxable profit in a jurisdiction where the rate is already preferential. Modelling the two together, rather than separately, is where most value is won or lost. See our guide to transfer pricing documentation.
Software Company Vietnam: Employee Equity
Granting options in an offshore parent to Vietnamese employees is permitted but is a regulated foreign exchange transaction requiring registration, and the personal income tax treatment differs at grant, vest and sale. Groups frequently implement plans first and discover the registration requirement at the first exercise.
Where equity is a central part of the compensation package, design the plan and the registration together. Our note on employee share schemes in Vietnam sets out the mechanics.
Software Company Vietnam: Hiring and Work Permits
Vietnamese developers are hired on ordinary labour contracts with compulsory insurance. Foreign technical leads and founders require work permits, now issued by the provincial People’s Committee under Decree 219/2025/ND-CP, which merged the separate demand-explanation step into the permit application itself.
Decree 219/2025/ND-CP also permits work in Vietnam of less than ninety days in aggregate per year without a permit, subject to notification, which suits founders who split time between markets. See our guide to work permits for foreign executives.
15 Things to Prepare Before Setting Up an FDI Company in Vietnam
A four-page pre-filing checklist covering structure and market access, capital and the DICA account, licensing and legalisation, work permits, and tax. Current to July 2026, including Decree 96/2026/ND-CP, Decree 219/2025/ND-CP and Decree 236/2025/ND-CP.
Frequently Asked Questions
Is there a minimum capital for a software company?
No statutory minimum. The figure should be credible against payroll and premises for the first eighteen months.
Can the company invoice customers abroad?
Yes. Export of services is standard and attracts value added tax treatment for exported services subject to conditions.
Can a foreign founder be the legal representative?
Yes, with a work permit or exemption and a residence card. At least one legal representative must reside in Vietnam.
How long does setup take?
Six to eight weeks is typical, with consular legalisation of the founder or parent documents the longest single step.
Build Your Vietnam Development Centre
IVLF Advisors incorporates software and technology companies, structures the intercompany development agreement and mark-up, secures incentives, documents the intellectual property chain and obtains work permits. See also our incorporation service and guidance from the Ministry of Finance. Contact our team.
This article is provided for general information only and does not constitute legal advice for any specific case. Regulations may change – please consult a qualified professional before acting. Should further analysis be required, please contact one of our lawyers below.
