REGULATIONS FOR FOREIGNERS ON OPERATING PRIZE-WINNING ELECTRONIC GAMES

Prize-winning electronic games have become a thriving segment of the entertainment industry worldwide, attracting millions of players and investors. In Vietnam, this sector holds significant potential due to a growing population of tech-savvy individuals and increasing disposable incomes. However, for foreign enterprises seeking to tap into this lucrative market, understanding and adhering to the country’s specific regulations is essential. Vietnam has developed a structured framework of rules governing the operation of prize-winning electronic games, ensuring fairness, transparency, and social responsibility.

Overview of prize-winning electronic games in Vietnam

Vietnam’s market for prize-winning electronic games is evolving rapidly, shaped by local preferences and global trends. This section outlines the market potential and the prevalent game categories.

Market potential of the games industry in Vietnam

The entertainment market in Southeast Asia is projected to reach $14.8 billion by 2024 and is expected to grow to $14.93 billion by 2029, with a compound annual growth rate of 0.19%. Vietnam’s electronic entertainment market is an integral part of this growth, boasting 28.2 million participants, which accounts for 28.7% of its population. Especially, esports viewership in Vietnam represented 16% of the population in 2023, on par with Indonesia and Taiwan. Additionally, Vietnam ranked among the top five Southeast Asian countries in esports viewership that year. The industry’s market size is projected to reach $8.73 million by 2027. 

Vietnam’s burgeoning market offers substantial opportunities for foreign investors in the gaming sector. With G2B, you can streamline your setup process and focus on your core business activities. Our dedicated team is here to help you with all your needs. G2B services provide assistance in setting up a business in Vietnam, offering professional and reliable support, guiding businesses through proper company establishment and annual compliance, opening local bank accounts, ensuring smooth operations, and minimizing legal risks from the outset.

Vietnam’s gaming market is poised for significant growth

Explore many categories of games in Vietnam

• Prize-exchange games

In prize-exchange games (prize-winning electronic games), players pay to buy tokens that can be exchanged for playing time. Players must meet specific game conditions to convert points into prizes. Collecting a set number of tickets enables the exchange for predefined rewards. These games are typically located in shopping centers.

• Handheld electronic games

Handheld gaming emerged as one of the earliest forms of electronic gaming. These devices include specialized controllers, a display screen, and audio features, often catering to a single game type. The compact design allows portability, but each device supports only one game.

• Slot machines

Slot machines are games of chance that require substantial investment but offer the potential for high rewards. Players pay real money for game attempts, with various mechanisms such as levers or balls determining outcomes.

• Audio games

Audio games emphasize sound-based gameplay. Players listen to audio cues and respond by typing or interacting in rhythm with the sound. Rewards are based on accuracy and performance.

• Video games

Video games, or PC-based games, are among the most popular formats today. Players use internet-connected devices to engage in games, often competing globally. Famous titles like League of Legends, PUBG, and Dota 2 generate substantial revenue for developers and players.

The game industry in Vietnam is divided into many categories

Regulations for foreign enterprises in the gaming sector

Vietnam imposes strict but clear regulations for foreign investors in the prize-winning electronic games industry. This section discusses the conditions for establishing a business and additional operational guidelines.

Conditions for establishing a gaming business in Vietnam

Vietnam offers favorable policies to attract foreign investors, leading to an increase in foreign participation in the gaming industry. However, gaming remains a conditional business, requiring compliance with specific rules. Notably, foreign investors cannot fully own gaming companies in Vietnam. Specifically, foreign investors are not allowed to establish 100% foreign-owned gaming companies in Vietnam. Therefore, to participate in this field, investors must adhere to the following fundamental condition:

• Capital Contribution Limit: Foreign investors are permitted to contribute a maximum of 49% to a gaming company. This means their shareholding must be within the range of 1% to 49%. This regulation ensures that local investors retain control of this industry. It means there are two methods to establish a gaming business in Vietnam:

  + Joint venture with local enterprises: Foreign investors can partner with local businesses that already possess a license to operate in the gaming industry in Vietnam by means of share transfers, capital purchases, or joint capital contributions.

  + Investment based on the defined capital ratio: Signing an investment contract to contribute capital between 1% and 49% to establish a foreign-invested gaming company in Vietnam.

Foreign investors can hold up to 49% of shares in Vietnamese gaming companies

Additional note for foreign gaming enterprises

Operating a public gaming center requires a certificate of eligibility, which mandates compliance with the government regulations as the following:

• The business must be registered as a public gaming service provider.

• The location must be at least 200 meters away from the gates of primary, secondary, or high schools.

• A clear business sign must display the name of the service center, address, contact phone number, and business registration number.

• The minimum total area of the gaming center:

  + 50 m² for special urban areas and urban areas classified as Type I, II, or III.

  + 40 m² for urban areas classified as Type IV or V.

  + 30 m² for other areas.

  + The gaming center must ensure adequate and evenly distributed lighting.

  + Fire prevention and firefighting equipment must meet the standards set by the Ministry of Public Security.

  + Payment of fees for the issuance of the Certificate of Eligibility to operate.

Prize-winning electronic game centers in Vietnam must meet strict requirements

Adhering to these regulations is the very first step for foreign enterprises to set up and operate in the prize-winning electronic game industry in Vietnam. With its immense potential, the market offers lucrative opportunities for investors willing to comply with local laws and standards. Contact G2B today to learn more about how to establish a gaming company in Vietnam! We are your dedicated partner who will stand by your side on the expansion journey in Vietnam.