CPTPP gives advantages in Vietnam gaming market

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) offers greater advantages to foreign investors in Vietnam‘s gaming market compared to World Trade Organization (WTO) rules.

According to Circular No.34/2013/TT-BCT, the importation of games into Vietnam is allowed

With regard to the publication of games, including electronic games, Vietnam’s commitments under the WTO and/or Vietnam’s CPTPP commitments allow foreign investors to offer electronic games only through a business cooperation contract or a company jointly with a Vietnamese partner who is licensed to offer electronic games.

Singaporean company Sea Limited indicated that foreign investment in the joint venture should generally not exceed 49% following Vietnam’s WTO commitments and/or 51% of Vietnam’s CPTPP commitments.

CPTPP

Foreign investment in Vietnam is regulated by both national legislation and international agreements, the main regulations being the Investment Law and Vietnam’s commitments to the WTO.

Foreign investment is generally divided into three categories: unrestricted, restricted, and prohibited.

With regard to the “restricted” category, the restrictions may take the form of a specific foreign ownership cap in a foreign-invested company, a general requirement to enter into a joint venture with a Vietnamese party without a mandatory cap on ownership or the requirement to obtain certain government approvals for foreign ownership with respect to industries that the Vietnamese government has not committed to opening up to foreign investment.

Sea Limited has obtained approvals from the competent authorities in Vietnam for direct ownership of equity interests in its online gaming, e-commerce and electronic payment businesses as a foreign investor, including approval for direct 100% ownership in its trading electronic business.

On June 17, 2020, the National Assembly of Vietnam adopted the Investment Law 2020, which came into force on January 1, 2021.

Under the Investment Law 2020, Vietnam’s investment registration authority could terminate an investment project in whole or in part if the investor conducted investment activities on the basis of a false civil transaction, which is a transaction falsely made by the parties to the transaction in order to hide other transactions or evade responsibilities to a third person.

 

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