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Amidst the ongoing boom in information technology and the digital economy, technology-related investments have become increasingly popular among savvy investors. Within this landscape of enticing opportunities, the realm of electronic games, especially online games, stands out as an incredibly appealing segment that captures significant attention. However, despite its potential for great success, establishing an online game company in Vietnam presents its own unique challenges. The conditions and procedures involved in this process can be complex, leaving many investors bewildered and unprepared to navigate the regulatory landscape. As a result, improper implementation of the law becomes a common stumbling block for aspiring entrepreneurs in this field.
Step 1: Conduct Market Research
After deciding what type of game you want to create in your gaming company, it is paramount to research the market well in order to get an idea of what you are venturing into. For instance, answering questions like – How big is the market? What is the growth potential? What are the risks and dangers involved? – can help you target your efforts concretely. In addition, it is also important to gather data on how the market functions and the mindset of your potential customers. Conduct surveys, understand the existing gaps in the market, and then work on bridging them.
Step 2: Develop a Business Plan
With the aim to launch a successful video game company and generate a substantial income from it, there are several key factors to consider before diving in. Take into account crucial aspects such as budgeting, determining the game's price, defining business models and legal structures, strategizing recruitment approaches for hiring talented employees, and more. It is essential to devote ample time to the planning phase since it’ll help to avoid challenges and setbacks later during the execution of the business venture. By doing so, investors can prepare for a smoother and more successful journey in the gaming industry.
Step 3: Legal and Regulatory Considerations
Before starting a gaming business, it is crucial to thoroughly familiarize yourself with the legal framework in Vietnam. Investors should pay close attention to compliance requirements and policy instructions to ensure they adhere to all regulations.
Regulations on the incorporation of FDI companies in the gaming sector
(1) Compliance with market opening commitments
According to the Schedule of Specific Commitments in Services of Vietnam’s commitments to the World Trade Organization (WTO), foreign investors are only able to register and provide game online services under the sector: “Electronic games business” (CPC 964) through business cooperation contract or joint-venture with Vietnamese partners who are specifically authorized to provide these services. The maximum foreign capital contribution allowed in joint ventures is only 49% of the legal capital.
(2) Licenses for Investment and Company Establishment
To establish a foreign-owned game company in Vietnam, foreign investors must apply for the Investment Registration Certificate (IRC) and the Enterprise Registration Certificate (ERC). In the gaming sector, they are required to form joint ventures with Vietnamese partners who hold the necessary authorization for providing gaming services. The foreign capital contribution of foreign investors in these joint ventures is limited to 49% of the legal capital.
Sub- License
Trading in electronic games is a conditional business line according to the provisions of the Investment Law 2020, the established company needs to satisfy some conditions and be granted a license to operate in this field in Vietnam. Further details regarding these conditions will be discussed in the following section.
Regulations on Online Gaming Industry in Vietnam
(1) Rating classification age of video game
In Vietnam, video games are subject to age-rating classifications based on specific regulations outlined in Decree No. 27/2018/ND-CP. The age groups are divided into three main categories: adults (18+), teenagers (12+), and everyone (00+). Each age group has specific guidelines governing the suitable content in terms of images, sounds, and actions. For instance, adult-rated games can feature armed combat but must exclude pornography in any form.
(2) Specialized Licenses relating to game online service
Depending on the nature of the online game services, providers must obtain specific licenses. For video games that have interaction among multiple players via the game server (G1 games), companies must obtain the license to provide G1 gaming services issued by the Ministry of Information and Communications with a validity period depending on the request of the companies and shall not exceed 10 years. In addition, for games that are identified as G2, G3, and G4 games a certificate of registration of game service provision is required, and at least 30 working days before officially providing, enterprises must send a Notice of provision of online game services for each game that will be provided to the Ministry of Information and Communications.
(3) Other regulatory requirements
In addition to the aforementioned regulations, there are several other requirements that businesses providing video game services in Vietnam must comply with.
Firstly, the enterprise must be established in accordance with Vietnamese law and have registered for the provision of online game services (G1, G2, G3, G4). It is important for the company to have a registered domain name and sufficient financial and technical capacity as well as measures for ensuring information safety and security.
Secondly, when establishing an enterprise, there must always be at least one legal representative residing in Vietnam, who can be either Vietnamese or a foreigner with a valid working permit.
Furthermore, the technical aspects of video game services must prioritize the safety, information security, and personal information confidentiality of players. Regarding transactions within video games, there are no specific controls on the amount of money that can be loaded into the game or specific timelines for transactions. However, failure to comply with the regulations may result in the suspension of the license.
Step 4: Financing gaming company
Financing is a critical aspect of starting any business. In Vietnam, there are various financing options available for gaming startups. Explore government grants, venture capital firms, and crowdfunding platforms. Prepare a compelling pitch that showcases the potential of your gaming company to attract investors. Consider building relationships with local investors and gaming industry networks to increase your chances of securing funding.
Step 5: Setting up operations
Establishing and running a successful gaming company necessitates meticulous planning and precise execution. Begin by registering your company in Vietnam, companies must ensure compliance with all the necessary legal procedures and requirements. Next, carefully consider the ideal office space for your operations. Factors such as location, accessibility, and cost should be taken into account as choosing a strategic location will not only facilitate collaboration and networking opportunities but also enhance your company's visibility and accessibility to potential clients and partners.
Step 6: Marketing and Launching the Gaming Company
In the modern business landscape, the role of marketing and social media in launching a successful venture cannot be underestimated. They are instrumental in propelling your business off the ground and capturing your initial customer base, whether it be a hundred, a thousand, or even tens of thousands of customers. According to marketing metrics, establishing strong customer relationships is immensely rewarding. By employing a data-driven approach to user retention, you can experience significant growth in revenue metrics. Also, it is crucial to consistently monitor your growth metrics to gain insights into customer responses to your array of games. Regularly tracking these metrics will enable you to understand customer preferences and make informed adjustments to optimize your offerings.
The Bottom Line
Embarking on the journey of starting a gaming company in Vietnam requires meticulous planning, market understanding, and adherence to regulatory frameworks. This six-step guide has provided you with a roadmap to navigate the intricacies of establishing your business successfully. From conducting comprehensive market research to grasping the legal landscape and obtaining the necessary licenses, each stage is vital for your company's foundation. However, in an industry as dynamic and competitive as gaming, gaining a competitive edge and maximizing your chances of success demands more than just following a guide.
That's where Viettonkin's consulting services come into play. Our team of seasoned experts possesses a deep understanding of the Vietnamese gaming industry, market trends, and regulatory intricacies. With our guidance, you can unlock insightful strategies tailored to your unique business goals. We offer comprehensive support, from market entry analysis to strategic planning, financial feasibility assessments, and beyond. Partnering with Viettonkin ensures that your investment in the Vietnamese gaming market is not only compliant but also strategically sound.
Take the leap and reach out to Viettonkin today to embark on your journey toward a thriving gaming company in Vietnam. Let us be your trusted partner, empowering you to make informed decisions and unlock the full potential of this vibrant and promising market. Your success awaits with Viettonkin, your catalyst for achieving greatness in the gaming industry.
