Vietnam continues to be an attractive destination for foreign investors in 2025 due to its stable business environment and increasingly legal framework. However, to conduct lawful and effective investment activities, foreign investors must satisfy certain conditions as prescribed by applicable laws. The following article, prepared by DNP Vietnam Law Firm, clarifies the key conditions to be noted.
I. Definitions
Pursuant to Clause 19, Article 3 of the Law on Investment 2025, a foreign investor means an individual holding a foreign nationality or an organization established under foreign law that carries out investment business activities in Vietnam.
Practical examples:
- Organizations: Samsung Electronics Vietnam, Intel Products Vietnam, etc.
- Individuals: Shin Dong Bin (Chairman of Lotte Group), Tony Tan Caktiong (Founder of Jollibee), etc.
Pursuant to Clause 8, Article 3 of the Law on Investment 2025, investment business means the use of capital by an investor to conduct business activities.
Practical examples:
Samsung Electronics Vietnam (South Korea) invests billions of USD to build mobile phone manufacturing plants in Bac Ninh and Thai Nguyen; VinFast (Vietnam) – Vingroup invests in automobile and electric vehicle manufacturing plants in Hai Phong.
II. Conditions for Carrying Out Investment Activities
1. Market Access Conditions
– Currently, business sectors applicable to foreign investors are classified into two categories:
- Sectors not yet accessible to the market; and
- Sectors subject to conditional market access.
– Key note: To conduct investment in Vietnam, foreign investors must ensure that their intended business lines are not included in the list of sectors not yet accessible to the market. If falling under this list, market access will be prohibited.
– For sectors subject to conditional market access, foreign investors may still invest but must satisfy the conditions prescribed under Clause 3, Article 8 of the Law on Investment 2025, including:
a) Charter capital ownership ratio of foreign investors in economic organizations;
b) Forms of investment;
c) Scope of investment activities;
d) Capacity of investors and participating partners;
e) Other conditions as prescribed by laws, resolutions of the National Assembly, ordinances, resolutions of the Standing Committee of the National Assembly, Government decrees, and international treaties to which Vietnam is a party.
2. Investment Registration Certificate (IRC)
For projects of domestic investors or economic organizations not falling into the following cases:
- Having foreign investors holding more than 50% of charter capital or having a majority of general partners being foreign individuals (for partnerships);
- Having an economic organization as mentioned above holding more than 50% of charter capital;
- Having both foreign investors and such economic organizations holding more than 50% of charter capital;
→ Investment procedures for obtaining an Investment Registration Certificate (IRC) may not be required.
However, pursuant to Point a, Clause 1, Article 26 of the Law on Investment 2025, investment projects of foreign investors are required to obtain an Investment Registration Certificate prior to implementation.
3. Investment Policy Approval
After satisfying conditions on business sectors and the IRC, foreign investors must obtain investment policy approval for projects falling into cases prescribed under Article 24 of the Law on Investment 2025, including but not limited to:
| No. | Project Characteristics |
|---|---|
| 1 | Investment projects requiring conversion of land use purpose of special-use forests, watershed protection forests, border protection forests from 50 hectares or more; windbreak, sand-fixing protection forests and coastal protection forests from 500 hectares or more; production forests from 1,000 hectares or more. |
| 2 | Investment projects requiring conversion of land use purpose for wet rice cultivation with two or more crops per year with a scale of 500 hectares or more. |
| 3 | Investment projects requiring resettlement of 10,000 persons or more in mountainous areas, or 20,000 persons or more in other areas. |
| 4 | Investment projects involving betting and casino business, except for prize-winning electronic games for foreigners. |
| 5 | Investment projects in compliance with the provisions of the law on cultural heritage, regardless of land area scale or population, within protection Zone I and protection Zone II of relics recognized by competent authorities as special national relics under the List of World Heritage, national relics, and special national relics. |
| 6 | Investment projects for nuclear power plants. |
| 7 | Investment projects of foreign investors in the sectors of telecommunications services with network infrastructure, afforestation, publishing, and press. |
| 8 | Investment projects in which investors request the State to allocate land, lease land without auction of land use rights, bidding for investor selection for projects using land; projects requesting change of land use purpose in accordance with the law on land. The investment policy approval specified in this clause does not apply to the following cases: a) Investment projects of individuals not subject to obtaining written approval of the provincial People’s Committee before being decided on land lease or permission for change of land use purpose in accordance with the law on land; b) Investment projects for construction of technical infrastructure of industrial clusters; c) Mining projects subject to auction of mining rights; mining projects serving projects, works, items, implementing urgent mobilization measures in accordance with the Law on Geology and Minerals; d) Other investment projects as prescribed by the Government. |
| 9 | Investment projects in which investors request the State to allocate land, lease land, permit change of land use purpose implemented in areas affecting national defense and security. |
| 10 | Investment projects in which investors request the State to allocate sea areas. |
| 11 | Investment projects for construction of housing (for sale, lease, or lease-purchase), urban areas regardless of land use scale or population scale in cases where investors have land use rights through agreements on receiving land use rights or already have land use rights in accordance with the law on housing and the law on land. |
| 12 | Investment projects regardless of land area or population within restricted development areas or historic inner-city areas (determined in planning in accordance with the law on urban and rural planning) of special-class urban areas. |
| 13 | Investment projects for construction and business of golf courses, except for cases of golf course construction and business under housing, urban area projects allocated land, leased land through auction of land use rights or bidding for investor selection. |
| 14 | Investment projects for construction and business of infrastructure of industrial parks, export processing zones, and concentrated digital technology zones. |
| 15 | Investment projects for new construction: berths, port areas under special-class seaports, Class I seaports. |
| 16 | Investment projects for new construction: airports, airfields; runways of airports, airfields; passenger terminals of international airports; cargo terminals of airports, airfields with a capacity of 01 million tons/year or more. |
| 17 | New investment projects in air passenger transport business. |
| 18 | Investment projects for oil and gas processing. |
| 19 | Other investment projects subject to investment policy approval of the Prime Minister in accordance with the law. |
| 20 | Investment projects requiring application of special mechanisms, policies different from the provisions of laws, resolutions of the National Assembly. |
III. Conclusion
From the above provisions, it can be seen that foreign investors must undergo multiple stages and comply with various legal conditions when investing in Vietnam, especially for sectors subject to conditional market access.
In particular, foreign investors should carefully review the list of sectors not yet accessible to the market. Pursuant to Clause 2, Article 17 of Decree No. 31/2021/ND-CP, if a business line falls under this list, foreign investors are prohibited from conducting investment activities in such sectors.
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