New regulations on electronic games for foreign companies in Vietnam

There are some changes in the regulations on electronic games for foreigners after the publication of Decree No. 121/2021/ND-CP of December 27, 2021 by the government regulating the activity of award-winning electronic games for foreigners in the territory . of the Socialist Republic of Vietnam (“Decree No. 121”) replacing Decree No. 86/2013/ND-CP of July 29, 2013, Decree 175/2016/ND-CP of February 15, 2017 and Decree 151/2018 / ND-CP of November 7, 2018 (hereinafter collectively referred to as “Decree 86”). Decree 121 comes into force on February 12, 2022 and is detailed by circular 39/2022/TT-BTC (“Circular 39”) of June 24, 2022 and circular 09/2022/TT-NHNN (“Circular 09”) of July 12, 2022. This article summarizes notable changes that have significant implications for this company.

1. Persons Eligible to Participate in Online Games

Regulations on who is eligible to participate in online gambling under the new regulations are stricter than those of Executive Order 86, especially foreigners and overseas

Vietnamese, who enter Vietnam legally with valid passports or international travel documents issued by competent foreign authorities and whose visa is valid; have full civil act capacity as prescribed by Vietnamese law and voluntarily comply with the rules of the game as well as other provisions of Decree 121.

Accordingly, Executive Order 121 does not allow foreigners and overseas Vietnamese entering Vietnam illegally or entering Vietnam legally but not leaving the country before the expiry of the visa according to the regulations to participate in the game in line.

2. Commercial terms and licenses

Basically, a company operating this business must have two sub-licenses, a certificate of eligibility for award-winning electronic game business issued by the Ministry of Finance and a license for the collection and payment of foreign currency and other operations of exchange issued by the State Bank before commencing its operation.

The requirements that businesses must fully meet to be issued the Award-Winning Electronic Games Business Eligibility Certificate under Executive Order 121 are tougher. The remaining basic regulations such as those of Decree 86, such as the presence of five-star class tourist accommodation establishments; have an implantation space that meets the regulatory conditions; have managers or operators for Business Location who meet the conditions and standards (university graduates with experience in managing and operating an award-winning electronic games business for more than 3 years), having a business plan, Executive Order 121 sets higher requirements with respect to the following:

Increase the minimum share capital from VND 200 billion to VND 500 billion and require the profit of the fiscal year preceding the year of application for the business eligibility certificate to be a gain;

– Increase the storage time of electronic equipment and camera systems for constant control and monitoring of all activities in the place of business (24 hours a day) to at least 180 days from the date of registration and ensure the clear image of all images in the following places: the entrance and exit area of ​​the Business Location; the area where the slot machines are located; cashier area, treasury for counting cash, conventional currency and storage equipment for cash and conventional currency. Previous regulations only required a minimum storage period of 30 days for these areas and 15 days for others.

– Slot machines purchased or imported for use must be new, comply with the technical specifications announced by the manufacturers and certified by an independent inspection body from a G7 member state.

– Strictly regulate the number of slot machines to be licensed. The maximum rate of machines is still 1 machine for 5 accommodation rooms according to the previous regulations, but only counted on accommodation rooms that have been commissioned.

3. Conventional money management

The mechanism for issuing and “registering” conventional money with the Ministry of Finance and Revenue Authority regarding its model, quantity and type before putting it into operation and re-registering it

information on changes was replaced by a mechanism of “notification” to the Ministry of Finance and the tax office as the basis for issuing invoices to calculate the company’s income. In addition, Executive Order 121 also revokes the provision on the basic information that the company’s conventional currency must contain, thereafter the conventional currency only needs its brand and identifying signs.

Regarding this new regulation, Decree 121 simplified the conditions of form and quality of conventional money as well as the procedures for applying this money in operation. In addition, businesses also ease the burden of obtaining licenses or approvals issued by relevant authorities on the use of conventional currency.

The payment in conventional currency provided for by the provisions of Circular 09 remains unchanged from the previous regulations. Players can pay in cash, by transfer from overseas accounts or from their foreign currency payment accounts opened in authorized banks in Vietnam to the operator’s specialized foreign currency accounts, or by credit card. These regulations seem very limited given the emergence of many non-cash means of payment today.

4. Loosen deductible expenses

Accounting expense regulations for these businesses are relaxed. In particular, the cap on recruitment management costs, which was previously limited to 4% of turnover, is no longer applied.

Executive Order 121 and its guiding regulations are on the one hand to tighten state management on these conditional activities and create a more suitable environment for businesses after satisfying all the regulated conditions.

Comments are closed.