In the context of rapid digital transformation, the demand for electronic identification, identity verification, and information security in Vietnam is rising significantly, particularly in sectors such as digital banking, fintech, e-commerce, and e-government. The Law on Electronic Transactions 2023 and Decree No. 69/2024/ND-CP have established a comprehensive legal framework for electronic authentication activities, opening up promising investment opportunities for foreign enterprises.
This article, prepared by DNP Viet Nam Law Firm, provides a comprehensive legal perspective to help investors understand the new policies and effectively navigate the Vietnamese market.
1. Overview of Electronic Authentication Services
Electronic authentication services are a critical link in digital infrastructure, enabling identity verification and data integrity in electronic transactions. This sector plays a pivotal role in Vietnam’s national digital transformation and creates a new frontier for technological investors, especially foreign enterprises with strengths in authentication, cybersecurity, and AI solutions.
2. Subjects and Scope of Business in Electronic Authentication Services
Legal Basis: Article 2, Decree No. 69/2024/ND-CP
2.1. Subjects Eligible to Provide Electronic Authentication Services
- Vietnamese agencies, organizations, and citizens;
- Foreign organizations and individuals residing or operating in Vietnam.
2.2. Scope of Application
- The Decree governs all electronic identification, authentication, and e-ID activities conducted within Vietnamese territory.
3. Business Conditions for Providing Electronic Authentication Services
Legal Basis: Article 23, Decree No. 69/2024/ND-CP
3.1. Organizational Requirements
- Only public service units or enterprises under the People’s Public Security Forces are eligible to directly provide electronic authentication services.
3.2. Personnel Requirements
- The legal representative or head of the organization must be a Vietnamese citizen with permanent residence in Vietnam.
- The enterprise must employ dedicated personnel holding a university degree or higher in cybersecurity, IT, or telecommunications, responsible for operating, managing, and securing the system.
3.3. Technical Infrastructure and Management Plan
The service provider must prepare a comprehensive Operational Proposal including:
- Detailed descriptions of IT systems, technical solutions, and service delivery processes;
- Data storage and protection plans ensuring information integrity, cybersecurity, and personal data protection;
- Measures for security, fire prevention, disaster recovery, and continuity of service;
- All technical equipment must be located within Vietnam and certified for information security compliance.
3.4. Permissible Outsourced Activities
Electronic authentication service providers may delegate auxiliary activities to third parties, such as:
- Customer support, service promotion, advisory services, and partner outreach.
- Outsourcing must comply with applicable legal regulations.
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4. Investment Opportunities for Foreign Enterprises
The issuance of Decree No. 69/2024/ND-CP opens the electronic authentication industry to foreign participation through the following avenues:
- Technical Collaboration: According to Article 23, Decree No. 69/2024/ND-CP, foreign investors are prohibited from contributing charter capital or directly establishing authentication service providers in Vietnam. However, they may participate via technical partnerships, consultancy, or auxiliary services such as customer support, marketing, or partner engagement.
- Technology Outsourcing: Foreign enterprises can supply authentication technologies, such as multi-factor authentication (MFA), biometrics, AI-based recognition and blockchain to licensed Vietnamese entities.
- Sector Expansion: As e-authentication becomes a mandatory component in digitalized transactions, opportunities expand into banking, securities, insurance, and e-government sectors.
“The above content is provided by DNP Viet Nam Law Firm for reference purposes only. For detailed, accurate, and tailored legal advice that meets your specific needs, please contact us using the information provided below.”
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