During the process of investing in Vietnam, opening and using an investment capital account is a mandatory requirement to ensure compliance with foreign exchange management regulations. In practice, many investors, especially enterprises with foreign elements, still confuse the Direct Investment Capital Account (DICA) and the Indirect Investment Capital Account (IICA), leading to legal risks in capital contribution, profit remittance, restructuring, or divestment.
On that basis, the following article, prepared by DNP Viet Nam Law Firm, focuses on analyzing, comparing, and clarifying the core differences between DICA and IICA, thereby assisting investors in correctly determining the appropriate type of account to be used, avoiding legal risks, and ensuring the legality of capital transactions in Vietnam.
1. Concept and purpose of DICA and IICA
Legal basis: Circular No. 06/2019/TT-NHNN guiding foreign exchange management for foreign direct investment activities in Vietnam; Circular No. 03/2025/TT-NHNN regulating the opening and use of Vietnam-dong accounts to conduct foreign indirect investment in Vietnam.
- Direct Investment Capital Account (DICA) is a payment account in Vietnam dong or foreign currency, opened by enterprises with foreign direct investment capital or foreign investors to conduct direct investment activities in Vietnam. This account is used for capital transactions directly associated with the project and the enterprise, such as capital contribution, capital adjustment, profit remittance, as well as dissolution or termination of investment activities.
- Indirect Investment Capital Account (IICA) is a payment account in Vietnam dong, opened to serve foreign investors’ indirect investment activities in Vietnam, which are not associated with management or control rights over enterprises. IICA is mainly used for financial investment transactions, such as non-controlling capital contribution or share acquisition, securities investment, and receipt of dividends or profits from indirect investment.
2. Distinguishing DICA and IICA: Core differences
| Criteria | DICA – Direct Investment Capital Account | IICA – Indirect Investment Capital Account |
| Applicable subjects | – Enterprises with foreign direct investment capital; – Foreign investors and Vietnamese investors in FDI enterprises; – Foreign investors participating in BCC or PPP; – Organizations and individuals related to foreign direct investment activities in Vietnam. (Article 2 of Circular No. 06/2019/TT-NHNN) | 1. Foreign investors include organizations established under foreign laws and individuals with foreign nationality who are non-residents conducting foreign indirect investment activities in Vietnam. 2. Banks and foreign bank branches licensed to conduct foreign exchange business and provide foreign exchange services (hereinafter referred to as authorized banks). 3. Other organizations and individuals related to foreign indirect investment activities in Vietnam. (Article 2 of Circular No. 03/2025/TT-NHNN) |
| Nature of transactions | Direct investment, associated with participation in, control over, or management of enterprises or projects in Vietnam. | Indirect investment, financial in nature, not associated with management rights over enterprises. |
| Types of permitted transactions | – Capital contribution, increase or decrease of charter capital;- Transfer of investment capital; – Remittance of profits abroad; – Liquidation, dissolution, or termination of projects. (Article 1 of Circular No. 06/2019/TT-NHNN) | – Capital contribution or non-controlling share acquisition; – Securities investment; – Receipt of dividends or investment income from indirect investment. (Article 4 of Circular No. 03/2025/TT-NHNN) |
| Permitted currency for capital contribution or investment | Foreign currency and Vietnam dong, consistent with the capital contribution recorded in investment legal documents. (Article 4 of Circular No. 06/2019/TT-NHNN) | All receipts and payments are conducted in Vietnam dong through the indirect investment account. (Article 3 of Circular No. 03/2025/TT-NHNN) |
| Principles for account use | – Purchasing foreign currency from authorized credit institutions to remit investment capital, profits, and lawful income abroad for foreign investors. – Transferring payments for the value of transferred investment capital or investment projects to foreign investors or Vietnamese investors in cases specified at point b clause 1 Article 10 of the Circular. (Article 12 of Circular No. 06/2019/TT-NHNN) | Strict regulations apply: funds may not be converted into term deposits or savings accounts; joint accounts are not permitted. (Article 3 of Circular No. 03/2025/TT-NHNN) |
| Management of foreign loans | Short-term, medium-term, and long-term loans of FDI enterprises are governed by regulations on foreign borrowing and debt repayment. (Article 4 of Circular No. 06/2019/TT-NHNN) | Foreign borrowing is not regulated under this Circular. (Article 3 of Circular No. 03/2025/TT-NHNN) |
“The above content is provided by DNP Viet Nam Law Firm for reference purposes only. For detailed, accurate, and tailored legal advice that meets your specific needs, please contact us using the information provided below.”
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