Security services are a conditional business line in Vietnam, with the demand for such services remaining constant due to the accumulation of wealth and the prestige associated with owning high-value assets. The imperative to safeguard these possessions becomes increasingly evident, and various business sectors in Vietnam are obligated to adhere to security and order regulations to obtain establishment approval.
Foreign security firms are presented with a potentially lucrative market in this rapidly developing nation, but providing security services in Vietnam is subject to specific conditions outlined in Decree 96/2016/ND-CP, supplemented by Decree 56/2023/ND-CP.
Conditions for Establishing a Security Services Firm
Foreign security service providers are permitted to establish a company in Vietnam only through a joint venture, with their involvement limited to contributing capital and providing technical assistance. Those intending to invest in this sector must adhere to certain conditions, including having a track record of offering security services for a minimum of five consecutive years.
The individual representing the firm in Vietnam should not have faced charges anywhere in the world for violating security service regulations. Capital contributed by the foreign security service provider is exclusively earmarked for the acquisition of machinery or technical equipment, with a minimum capital contribution of US$1 million required.
The purchased equipment must undergo valuation by the authorities, with the security service provider responsible for covering the associated valuation fees. Security service providers with foreign investment are obligated to submit a list of machinery and technical facilities acquired by the foreign party, along with valuation records, to the relevant police authority within 20 days of commencing operations.
Security and Order Certificates
In several business sectors in Vietnam, such as accommodation services and karaoke bars, business owners, including those in security services, must fulfill specific security and order conditions. To obtain a security and order certificate, security services firms need to submit an application form along with certain documents, including a business registration certificate or operation registration of enterprise’s branch or affiliate.
Security services firms are required to furnish the curriculum vitae and a criminal record statement or an individual declaration for the person responsible for security and order within the business. In the case that this person is not Vietnamese or holds a foreign passport, they must additionally submit a copy of their passport, along with a diploma confirming their qualification and documents verifying that the foreign enterprise meets the minimum capital requirements.
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Furthermore, the application for a security and order certificate must include specific details about the firm’s business lines, which can be provided through a separate official document if the submitted documents do not explicitly detail this information. This ensures that the firm’s activities are clearly outlined and compliant with regulatory requirements.
Requirements for Security Guards
Security service providers must ensure that their security guards meet certain requirements, including not having a criminal record for murder, deliberate infliction of injuries, or property offenses. A background check, validated by the People’s Committee of the commune, ward, or town where their permanent residence is registered, is required, along with a health certificate issued by a medical center or hospital at the district level or higher.
Possession of a secondary school diploma or a higher qualification is mandatory for security guards. Note that individuals in charge of security and order, directly managing the business, and those employed as security guards cannot be foreigners or Vietnamese residents living overseas.
Foreign entities must address corporate establishment requirements, handle tax obligations, and comply with visa processes for their foreign staff. Managing the details of establishing a security services firm in Vietnam can be challenging and is best done with the support of a professional consultancy.
Given the complexity of these regulations, foreign security service firms may need to adapt their business models to comply with the requirements outlined in the decrees. As the Vietnamese market continues to grow, the demand for security services remains constant, presenting foreign security firms with a potentially lucrative market in this rapidly developing nation.
They must carefully consider these factors to succeed in the Vietnamese market.
