To approach international integration, Vietnam has opened market access for foreign investors. Being one of the trends, call center service is expected by foreign investors. Due to favorable conditions in Vietnam’s market such as low labor expenses and the convenient telecommunication system, it is potential for foreign investors to decide to invest into call center service in Vietnam.
Through this article, we would like to present the notable issues for foreign investment into call center service in Vietnam.
1. What is the “Call center” service?
A call center is a centralized customer service of the company to receive, support and advise customers by using the telephone for handling inbound and outbound calls from customers.
2. Conditions for establishing the foreign invested company specializing in call center service in Vietnam
Currently, foreign investors shall meet the statutory conditions to establish a company specializing in call center service in Vietnam.
First of all, the call center or contact center service is a non-conditional business line as VSIC 8220 – Activities of call centers under the domestic laws of Vietnam.
As for VSIC 8220 business scope under Vietnamese law, there are 2 types of services regulated as follows:
- Answering calls from customers by using human operators, automatic call distribution, computer telephone integration, interactive voice response system or other simple methods for receiving orders, providing product information and addressing customers’ complaints.
- Using similar methods for selling or marketing goods or services to potential customers, undertaking market research activities or conducting surveys and undertaking similar activities for customers.
In addition, Vietnam has only committed to services mentioned in item (i) as CPC 87903 – Telephone answering services to Japanese investors under the VJEPA treaty between Vietnam and Japan. Being WTO commitment’s signatory, Vietnam has not opened for accessing the market in respect of CPC 87903 to foreign investors.
Pursuant to Vietnamese laws, foreign investors are required to obtain approval from the competent Ministries for the uncommitted services under the international treaty to which Vietnam is a signatory. This procedure will not only take a lot of time depending on such Ministries’ proceedings but it can also be rejected on a case-by-case basis.
It is difficult for foreign investors to register 2 services (i) and (ii) under CPC 87903. However, there are some foreign invested companies that have registered such services successfully according to our research.
3. How to set up a foreign invested company for call center service in Vietnam
To set up a foreign invested company operating call center service in Vietnam, foreign investors must implement the following procedure:
Step 1: Obtaining the Investment Registration Certificate (“IRC”) (1)
There is no limitation on the investment capital or the legal status of foreign investors for investing service of CPC 87903 under the international treaties (e.g., WTO commitment and VJEPA) and Vietnamese laws.
The foreign investors shall submit an application to the competent licensing authority as regulated by the prevailing Law on Investment and relevant legal documents of Vietnam.
Within 15-20 working days of receiving the application, the licensing authority will issue an IRC to approve the registration. This step will be prolonged for services which are not committed by Vietnam into the international treaties.
Step 2: Obtaining the Enterprise Registration Certificate (“ERC”) (2)
After obtaining IRC, the foreign investors shall take a procedure for obtaining ERC to establish an FIE in Vietnam. Accordingly, the application shall be submitted to the competent licensing authority.
The licensing authority will issue ERC within 03-05 working days of receiving the application.
4. Other foreign investment types to provide call center service in Vietnam
In addition to the establishment of FIE for call center service in Vietnam, foreign investors can invest under the types as follows:
1. A foreign company can register its branch in Vietnam under a Branch Registration Certificate with a validity of 5 years. In this case, it is required to meet the following prerequisites (3):
- The foreign company is legally incorporated and registered;
- The foreign company has come into operation for at least 05 years from the date of establishment or registration;
- The business registration certificate or equivalent document of the foreign company is valid for at least 01 year from the date of application;
- Business scope of the branch is conformable with Vietnam’s Commitments to market access stipulated in treaties to which Vietnam is a signatory shall be consistent with lines of business of the foreign company;
- Where the branch’s business scope is inconsistent with Vietnam’s Commitments or the foreign company is not located in the country or territory is a party to treaties to which Vietnam is a signatory, the branch can be established only with the prior consent of the relevant Minister.
2. Foreign investors can enter an outsourcing agreement with the Vietnamese-based call center. This agreement must be in accordance with the laws of Vietnam.
In conclusion, foreign investors who desire to invest into call center service in Vietnam shall comply with the above statutory conditions and procedures as prescribed.
Should you have any questions about the above issues, please contact us via email: [email protected]
(1) Law on Investment 2020 and Decree No. 31/2021/ND-CP
(2) Law on Enterprise 2020 and Decree No. 01/2021/ND-CP
(3) Articles 8 and 9 of Decree No. 07/2016/ND-CP