Setting up a software company in Vietnam is procedurally straightforward. Defending it is not. Tax audits, diligence exercises and exits rarely turn on whether the entity was validly incorporated. They turn on three harder points: whether revenue claimed as “software production” qualifies for incentives, whether hosting or platform activities crossed into a licensed perimeter, and whether the company, not its founders or offshore parent, owns the code.
The 2026 framework helps at the front end: a foreign investor may incorporate before obtaining an investment registration certificate (IRC). Incentives, however, are self-assessed, and the burden of proof sits with the company.
Classifying a software company in Vietnam
Vietnamese law regulates activities, not “tech companies” as a class. A software company in Vietnam may combine several, each with its own market access, licensing and tax consequences, so classification, done on the revenue model rather than the marketing description, is the first legal task.
Software production, IT services and platforms
- Software production: developing proprietary products or bespoke software, including SaaS built in-house. Typically registered under VSIC codes such as 6201 (computer programming) and 5820 (software publishing) [Verification Required: current VSIC].
- IT services: systems integration, consulting, managed services (e.g., VSIC 6202) [Verification Required].
- Data processing and hosting: VSIC 6311 and related codes, potentially overlapping with telecommunications regulation.
- Online platforms: web portals, social networks, online games, e-commerce platforms, each subject to sector licensing [Verification Required].
- Licence resale: trading third-party software may engage distribution rules for foreign-invested entities.
Registered business lines should reflect what the software company in Vietnam will actually do in its first two to three years, with a written scope note under each code. Adding a line later is an amendment to the enterprise registration and, where relevant, the IRC.
Market access position
Article 8 of the Law on Investment 2025 (“LOI 2025”) grants foreign investors domestic-equivalent market access, subject to the restricted list in Article 8.2, implemented through Appendix I of Decree 96/2026/ND-CP (Part A not open; Part B conditional). Computer and related services are generally committed in Vietnam’s WTO services schedule without foreign ownership limitation [Verification Required: CPC 84 sub-sectors and any carve-outs].
Counsel’s position: for a software company in Vietnam, pure software production and IT services are low-risk on market access; the risk concentrates in data, platform and telecom-adjacent activities. Article 10.1 also bars performance requirements such as local content or export ratios.
IT company setup Vietnam: entity, route and location
For most groups, IT company setup Vietnam means a single-member limited liability company wholly owned by the parent; a joint stock company suits an ESOP or future listing. Either needs an enterprise registration certificate (ERC) and, for a foreign investor, an IRC under Article 26.1 LOI 2025.
Filing route for a software company in Vietnam
Article 19.2 LOI 2025 permits incorporation before IRC procedures, provided the company meets Article 8 conditions at incorporation. Decree 296/2026/ND-CP (Article 7) requires a written market access commitment in the enterprise registration dossier in that case. The IRC must still be obtained before implementing the project (Article 29.2).
For a software project outside any zone and not requiring policy approval, the Department of Finance issues the IRC within 10 working days of a valid dossier if the Article 39.3 conditions of Decree 96/2026 are met. Under Article 6.7, two years of audited statements are not required and parent support letters need no validity period.
Incorporating first suits engineering hubs that must lease and hire early, but not where any revenue stream touches a conditional sector, because the signed commitment then carries real exposure.
Hi-tech zones and the digital technology zone option
LOI 2025 lists the digital technology zone among the zones whose projects may opt into the special investment procedure under Article 28, which dispenses with policy approval, technology appraisal and a construction permit in exchange for written undertakings. Zone management boards handle projects consistent with approved planning (Article 25.4).
For companies located in hi-tech zones, Article 20 of Decree 168/2025/ND-CP makes the hi-tech zone management board the business registration authority. Whether the same applies in digital technology zones, and which zone-specific incentives exist, requires verification [State Authority Practice / Verification Required].
Data services Vietnam: where the perimeter moves
Data services Vietnam regulates are where a software company can drift out of its licence unnoticed: on-premise software that becomes a hosted platform with locally stored customer data has changed regulatory character.
Hosting, cloud and telecom-adjacent services
Data centre, cloud and some hosting services may be characterised as (value-added) telecommunications services, with treaty ownership limits and licensing [Verification Required: current telecommunications law]. The practical test is whether the company sells infrastructure as a service or merely runs its own application on a licensed provider’s infrastructure.
- Lower risk: SaaS operated on third-party cloud infrastructure contracted by the company.
- Higher risk: reselling compute or storage capacity, or operating data centre infrastructure for third parties.
Personal data and cross-border transfer
A software company in Vietnam that processes personal data must comply with data protection legislation, including impact assessment and cross-border transfer duties, and cybersecurity rules that may affect localisation [Verification Required: statutes and decrees]. These duties apply whether or not the line is registered as “data processing”. Our technology, data and fintech practice typically maps data flows before product launch.
Planning Your Market Entry into Vietnam?
Foreign ownership restrictions and capital account regulations vary significantly by industry sector. Send your proposed business scope and target timeline to our Corporate Practice Team via WhatsApp or Email for a complimentary 24-hour Feasibility & Regulatory Check.
Software tax incentives Vietnam: eligibility and audit defence
Article 14 LOI 2025 lists the forms of incentive: CIT relief, import duty exemption, land rent relief and accelerated depreciation; Article 15 identifies incentivised sectors and areas. Software production has long attracted preferential CIT treatment, but the specific rates and durations now depend on CIT Law 67/2025/QH15 and its implementing instruments [Verification Required].
Qualifying activity and income segregation
Software tax incentives Vietnam offers attach to qualifying income, not to the entity. Three issues dominate audits of a software company in Vietnam:
- Production criteria. Software production for incentive purposes has historically been defined by reference to a specified production process [Verification Required: current criteria instrument]. Testing-only, staff augmentation or implementation of third-party products may fall outside.
- Income segregation. Where qualifying and non-qualifying revenue coexist, separate accounting or a defensible allocation is required [Verification Required].
- Intercompany characterisation. A development agreement with the parent should evidence that the Vietnamese entity performs the development process, not merely supplies personnel. Transfer pricing documentation must align.
Self-assessment under Decree 96/2026
Under Article 24 of Decree 96/2026, incentives are applied on the basis of the investment approval or registration document, and the enterprise self-determines eligibility. Where several heads apply, the most favourable prevails (Article 14.9 LOI 2025). Special incentives under Article 17 carry large capital thresholds (for digital technology and chip projects, Decree 96/2026 refers to VND 6,000 billion disbursed within five years), so they suit large investments, not typical development centres.
Audit defence for a software company in Vietnam starts at incorporation: the IRC project description, the registered business lines and the intercompany agreement should tell the same story. Our tax team reviews that alignment before filing.
IP, people and the tech startup Vietnam cap table
A tech startup Vietnam target is valued on code, team and clean equity, and diligence tests each.
Code ownership in a software company in Vietnam
Employment and contractor agreements should vest economic rights in the software in the company, and address pre-existing founder code [Verification Required under the Law on Intellectual Property]. Where an offshore parent commissions development, the agreement must state where ownership lands and how any licence back is priced.
Foreign engineering leads fall under Decree 219/2025/ND-CP (effective 7 August 2025). Stays under 90 days per calendar year can be exempt from a work permit (Article 7(13)); otherwise the permit is applied for 10 to 60 days before start, decided within 10 working days and valid for up to two years. An expert needs a degree and two years’ experience (Article 3(3)). Intra-company transfer exemption applies only to staff of a foreign enterprise with commercial presence in one of the 11 WTO-scheduled service sectors, employed at least 12 consecutive months [Verification Required: whether a software line qualifies].
Funding rounds and Article 21 registration
Under Article 21.3 LOI 2025, a foreign investor must register a capital contribution or share purchase before the change of members or shareholders where the transaction takes foreign ownership above 50%, increases it further when already above 50%, or increases foreign ownership in a conditional-access sector. Registration uses form I.1.13 under Circular 55/2026/TT-BTC [Verification Required: form code]. Funds then move through the capital account: Circular 38/2026/TT-NHNN requires monetary contributions by bank transfer into it (Article 4.4) and allows transfers before the change is registered (Article 4.5).
A conversion of notes or an employee share scheme is itself a change of shareholders and may trigger the same analysis, so build registration into every round’s conditions precedent.
Risk matrix for a software company in Vietnam
| Issue for a software company in Vietnam | Legal position | Commercial impact | Risk | Mitigation |
|---|---|---|---|---|
| Incentive claimed on non-qualifying income | Self-assessed (Decree 96/2026, Art. 24) | Back taxes, interest, penalties on audit | High | Segregate income; production-process records |
| Hosting characterised as telecom service | Sector licensing; treaty ownership limits | Unlicensed activity; restructuring | High | Use licensed infrastructure; separate vehicle |
| Personal data non-compliance | Data protection and cybersecurity rules | Sanctions; enterprise customer churn | High | Data map; impact assessment |
| Code not owned by the company | IP and employment law | Diligence red flag; price chip | Medium | IP assignment and confirmation deeds |
| Funding round without Art. 21 registration | Prior registration required above 50% | Closing delay; ERC update blocked | Medium | Build registration into CPs |
Hypothetical scenario
A US-based B2B SaaS group builds its core product in a wholly owned software company in Vietnam. Two years later the subsidiary invoices local customers and hosts their data on servers leased from a domestic data centre. A Series C investor’s diligence flags CIT incentives claimed on local revenue without segregation, an unassessed telecom characterisation of the hosting, and founder code never assigned. Each was avoidable with a scoping memo at the outset.
How these rules apply depends on the revenue model, data architecture and ownership structure of your business. IVLF prepares a Software Structuring & Incentive Memo for a software company in Vietnam, covering activity classification, filing route, data perimeter, incentive eligibility and IP chain-of-title, followed by a pre-filing red-flag review of the dossier. Investors can add focused technology due diligence.
Confidential consultation: (+84) 936 726 065 ยท info@ivlf-advisors.com.
Planning Your Market Entry into Vietnam?
Foreign ownership restrictions and capital account regulations vary significantly by industry sector. Send your proposed business scope and target timeline to our Corporate Practice Team via WhatsApp or Email for a complimentary 24-hour Feasibility & Regulatory Check.
Frequently Asked Questions
Can a foreign investor wholly own a software company in Vietnam?
Generally yes for software production and computer-related services, which are broadly open to foreign investors. Hosting, data centre, telecom-adjacent and some platform activities may carry ownership limits or licensing and need separate assessment.
Are software tax incentives automatic for a software company in Vietnam?
No. Incentives are self-assessed under Decree 96/2026 and attach only to income from qualifying software production. The company must be able to evidence the production process and segregate qualifying income if challenged on audit.
Should a development centre locate in a digital technology zone?
Only if the project needs land or facilities, or would benefit from the Article 28 special procedure or zone-specific incentives. A development centre leasing commercial office space usually gains little procedurally.
Does a funding round require investment registration?
It does where the round takes foreign ownership above 50%, increases it further when already above 50%, or increases foreign ownership in a conditional sector. Registration must precede the change of shareholders under Article 21.3 LOI 2025.
Is SaaS hosting by a software company in Vietnam a licensed activity?
Running your own application on a licensed provider’s infrastructure is generally lower risk. Selling compute, storage or data centre capacity to third parties may be characterised as a licensed telecommunications service; verify against current telecom rules.
Conclusion: audit file for a software company in Vietnam
Treat incorporation as the first entry in the audit file. Classify every revenue stream, align the IRC description, business lines and intercompany agreement, map data flows before launch, and paper code ownership from the first hire. A software company in Vietnam built this way withstands audit, diligence and exit.
This article provides general information on Vietnamese law as of 10 October 2026. It is not legal advice on any specific matter and should not be relied on without advice on the relevant facts.
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.
