In today’s digital landscape, the release of software plays a crucial role in technology advancement and business efficiency. Understanding the regulations and market dynamics around software licensing is essential for companies that aim to succeed in this industry.
1. What is Software Release?
According to the regulations of the Information Technology Law, software is defined as “computer programs described by a system of symbols, codes, or languages to control devices performing certain functions.” Software is a computer program written in programming languages or command codes to control electronic devices (such as computers, phones, tablets) to perform specific tasks or functions. It enables devices to accomplish tasks ranging from simple to complex ones, such as calculations, drawing, sending emails, or playing games.
To better understand, we can categorize software into two main types:
- System Software: This type of software enables computers or devices to function, such as operating systems (Windows, macOS, Android). An operating system is essential for controlling computer hardware and allowing other software to run. For example, the Windows operating system helps your computer operate, connect with devices like keyboards and mice, and run other software.
- Application Software: This type of software assists users in performing specific tasks, such as word processing, calculations, or gaming. For instance, Microsoft Word helps you draft documents, Google Chrome allows you to browse the web, and Photoshop enables you to edit images.
Software can be released in various ways. Some software may be free for users, while others may require payment or a license purchase. The process of releasing software involves bringing a software product (or a version of it) from the development stage to the market or end-users. This includes, but is not limited to, releasing software for download, installation, or online use. The goal of software release is to enable users to access and utilize the software in ways that meet their requirements.
According to Clause 3, Article 9 of Decree 71/2007/ND-CP, the activity of software release falls within one of the types of software services, which specifically includes the following:
- Software management, warranty, and maintenance services;
- Software quality consulting, evaluation, and assessment services;
- Software project consulting and development services;
- Software pricing consulting services;
- Software technology transfer services;
- System integration services;
- Software product and information system safety and security services;
- Software distribution and supply services;
- Other software services.
2. The Software Business Market in Vietnam
The software business market in Vietnam is opening up a vast potential landscape, driven by favorable factors from government policies to increasingly growing demand from businesses and consumers. Below, Siglaw Law Company outlines key factors shaping the strong development potential of the software market in Vietnam for your reference:
- Growing Information Technology Sector: The IT sector in Vietnam is rapidly developing, thanks to government support policies, including investments in network infrastructure and digital transformation initiatives. This creates a solid foundation for developing software solutions, particularly in areas like finance, healthcare, education, and manufacturing.
- Increasing Demand for Software: The demand for software in Vietnam is rising sharply, especially among businesses. Management software, financial, and accounting software are becoming essential tools for companies to optimize processes and enhance work efficiency. Additionally, the consumer market is also growing, with increasing demand for mobile applications, entertainment software, and online services such as e-commerce and digital banking.
- Favorable Legal Environment: Software is not classified as a conditional business sector in Vietnam, which reduces administrative procedures and facilitates software companies. Companies only need to register a business and comply with tax obligations to operate, saving time and costs for businesses in the startup and development process.
- High-quality Workforce: Vietnam has a young, dynamic workforce that is well-trained in IT fields. Universities and training institutions provide high-quality human resources ready to meet market demand. Vietnamese programmers and software engineers are increasingly trusted by both domestic and foreign companies due to their professionalism and reasonable costs.
3. What Licenses Are Required for Software Release?
Releasing software in Vietnam, especially system software, application software, and utility software, is not classified as a conditional business sector. This means that to establish and release software, companies do not need special licenses as they would for sensitive software such as recording, mapping, or surveillance tools.
Since software is not a conditional business sector, companies wishing to release software in Vietnam only need to follow the procedure to obtain a Business Registration Certificate. This is the basic procedure to establish a business and start operations in the software field. The essential steps include:
- Preparing Documentation: Companies need to prepare business registration documents, including items such as an application for business registration, copies of legal identification of the owner or legal representative, and the company’s charter.
- Submitting the Application: The application will be submitted to the Business Registration Office under the Department of Planning and Investment, where the company intends to locate its headquarters.
- Receiving the Business Registration Certificate: After the application is approved, the company will receive the Business Registration Certificate and can begin its software business activities.
If the company has foreign investment, in addition to the Business Registration Certificate, investors need to apply for an Investment Registration Certificate from the Department of Planning and Investment. This procedure is necessary to ensure compliance with investment regulations and foreign ownership laws in Vietnam.
The basic steps to apply for an Investment Registration Certificate include:
- Preparing Investment Documentation: The investment documents should include information about foreign investors, investment projects, capital contributions, business sectors, and other relevant details for software development.
- Submitting the Investment Application: The investment application is submitted to the Department of Planning and Investment of the province/city where the company intends to establish its headquarters. After reviewing and verifying the application components, the competent authority will issue the Investment Registration Certificate to the company.
- Receiving the Investment Certificate: The company will receive the Investment Certificate if the application is approved. Following this, the company can proceed with the next steps to develop and release software in Vietnam.
In conclusion, understanding the regulations and processes around software release is vital for companies wanting to innovate and succeed in Vietnam’s growing software market. With a favorable environment for software businesses, companies can efficiently contribute to the technology landscape while meeting the needs of a rapidly evolving user base. By ensuring compliance with local regulations and leveraging the growing demand, businesses can position themselves effectively in this dynamic market.
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TLA Law is a leading law firm with a team of highly experienced lawyers specializing in criminal, civil, corporate, marriage and family law, and more. We are committed to providing comprehensive legal support and answering all your legal questions. If you have any further questions, please do not hesitate to contact us.
1. Lawyer Vu Thi Phuong Thanh, Chairman of the Members’ Council , Ha Noi Bar Association
Email: vtpthanh@tlalaw.vn
2. Lawyer Tran My Le, Manager of TLA Law LLC, Ha Noi Bar Association
Email: tmle@tlalaw.vn.
Dinh Phuong Thao