VietNamNet Bridge – Once the two government decrees take effect, foreign companies such as Google and Facebook will have to set up their representative offices in Vietnam, register services and pay tax in accordance with the Vietnamese laws. Internet experts believe that the Vietnamese market is attractive enough and regulations are reasonable enough to retain the foreign big guys.
Domestic and foreign businesses put on a leveling field
Under the draft decree on Internet service and Internet information content management, foreign institutions and enterprises, which provide information across borders to the users in the Vietnamese territory, have to fulfill their responsibilities in accordance with the Vietnamese laws.
They have to take responsibility of protecting personal information of Vietnamese users, informing to Vietnamese users in Vietnamese language about the risks and responsibilities when posting and exchanging information on Internet, and ensuring the right of Vietnamese users to allow foreign institutions to use their personal information.
A noteworthy point of the draft decree is that the foreign enterprises which provide information across the border and have high number of users on Vietnamese territory, like Facebook and Google, will have to set up representative offices in Vietnam, inform to the watchdog agencies about the names, addresses, contact phones, fax numbers and email addresses of the competent representatives.
The list of the enterprises subject to the regulation would be released by the Ministry of Information and Communication.
They will also have to make written commitments that they will get ready to join forces with the Vietnamese state management agencies to eliminate the information banned in Vietnam.
Meanwhile, under the draft decree on information technology services, institutions and individuals who provide cross-border services must obtain licenses if wanting to do business in the Vietnamese market. The Ministry of Education and Training would team up with the State Bank of Vietnam to compile the draft regulation on how to collect tax on the across-border service providers.
Google, Facebook would accept the new regulations?
While domestic service providers have urged the government to impose strict control over foreign institutions to create a leveling playing field for all enterprises, some analysts have voiced their concern that foreign service providers would quit Vietnam to avoid such complicated procedures. If so, Vietnamese users, who do not care if the State can collect tax from the big guys or not, and only care about service quality, would lose high quality service providers.
However, Phan Anh Tuan, Deputy General Director of VTC Online, Chief of the Go.vn project, said that the regulations stipulated in the draft decree are reasonable and necessary.
Sharing the same view with Tuan, Ha Tuan Anh, General Director of Vinalink Media, affirmed that the drafted regulations are not so complicated and unreasonable that foreign institutions would not accept.
He went on to say that in 2011, representatives of Google flew to Vietnam to have working sessions with the Ministry of Information and Communication. It was very likely that the two sides discussed the issue, and that the ministry has set up the requirements after reaching a consensus with Google.
When asked if the big guys Google and Facebook would stop providing services in Vietnam because of the strict control, Tuan said he personally thinks that Vietnam is one of the top three markets in South East Asia in terms of Internet growth, which would be attractive enough to retain the big guys.
According to Tuan Anh, the revenue from Google AdWords of Google in 2011 in Vietnam accounted for 50 percent of the revenue from online ads in Vietnam. Therefore, it is likely that Google would obey the reasonable requirements to be set up by Vietnam, including the ones on information filtration, setting up representative offices or paying contractor withholding tax.