Solidity is the programming language to write Ethereum smart contracts. While Solidity has its own tool, you can also use Visual Studio Code to write and compile Solidity code.
First, you need to download and install the following extension.
This extension provides the following features.
- Syntax highlighting
- Snippets
- Compilation of the current contract (Press F1 Solidity : Compile Current Solidity Contract), or F5
- Compilation of all the contracts (Press F1 Solidity : Compile all Solidity Contracts), or Ctrl+F5 / Cmd+F5
- Code completion for all contracts / libraries in the current file and all referenced imports
- Default project structure (solidity files needs to be in the 'src' directory, and libraries in the 'lib' directory). Libraries will follow the same structure.
- Compilation supporting EIP82 (dappfile and dependency packages)
- Support for different solidity versions (Remote and local)
- Code generation using https://github.com/Nethereum/abi-code-gen, it includes currently the default template for Nethereum service, dtos generation. (Open 'contractName.json' after compilation from the bin folder. Press F1 and press Solidity: Code generate from compilation output..) Please contribute more templates.
- Linting using Solhint or Solium
A default project / library dependency structure is supported as follows: 
Libraries will have the same name as their folder they are included. Solidity files will be in the 'src' folder. Libraries will be included in the 'lib' folder.
Currently there is no name conflicting resolution, so the first library found matching a name, will be the first one used