Cloud computing service agencies

To bring cloud computing services closer to customers in the Vietnamese market, leading technology corporations such as Google, Microsoft, and Amazon have established partnership relations with domestic enterprises. Through distribution agreements, these Vietnamese Companies act as intermediaries, facilitating a more convenient provision of services while also supporting customers in the implementation, usage, and optimization of cloud solutions. This cooperation model not only assists international providers in expanding their market but also enables Vietnamese Companies to access advanced technology, thereby enhancing their competitive capacity in the information technology sector. 

The Law on Telecommunications 2009 did not specifically define Cloud Computing Service as a Telecommunications Service, nor did it classify Cloud Computing Service Agencies as Telecommunications Service Agencies. Consequently, Vietnamese Companies typically registered the information technology business line to conduct these services. This business line is not listed as a conditional business for either domestic or foreign investors. Therefore, they could register for business without being restricted by ownership limits on shares or capital contributions, and without the need to obtain a sub-license prior to operation. 

However, the Law on Telecommunications 2023, issued on November 24, 2023, and effective for cloud computing service activities from January 1, 2025, has introduced significant changes. Specifically, Article 3.11 defines Cloud Computing Service as a type of Telecommunications Service, while Article 3.30 stipulates that Vietnamese Companies entering into agreements with telecommunications enterprises to provide Telecommunications Services to users shall be considered Telecommunications Service Agencies. As a result, instead of registering the information technology business line as before, Vietnamese Companies operating in this field are now required to register under business code 6190 – Other telecommunications activities (details: Telecommunications Service Agency). 

For Vietnamese Companies wholly owned by Domestic Investors, the above changes do not pose significant obstacles. On the other hand, Foreign Invested Enterprises will face considerable challenges when adding the Telecommunications Service Agency business line to their licenses. Pursuant to Article 29.1 of the Law on Telecommunications 2023, Foreign Investors are permitted to invest in the business of cloud computing services without limitations on the ownership ratio of shares, capital contributions, or the contribution ratio in a business cooperation contract. However, this law is silent on the conditions or ownership ratio limits for the Telecommunications Service Agency business line. Furthermore, under Vietnam’s WTO Accession Commitments, the market for this particular business line has not yet been opened. Consequently, many Foreign Invested Enterprises currently distributing the cloud computing services of Google, Microsoft, and Amazon will face difficulties in adjusting their business operations to comply with the new legal regulations. 

Additionally, pursuant to Article 29.2 of Decree No. 163/2024/ND-CP, foreign organizations such as Google, Microsoft, and Amazon providing cross-border cloud computing services to users in Vietnam are responsible for carrying out the procedure for Notification of service provision, using Form No. 27 in the Appendix issued with this Decree. Conversely, Article 42.2 of the Law on Telecommunications 2023 stipulates that Telecommunications Service Agencies are exempted from the requirement for a telecommunications license, as well as from the obligation to register or notify the provision of telecommunications services. 

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