Foreign investors in Vietnam may establish a company, contribute capital, or purchase shares. Conditions include valid nationality, lawful location, and compliance with specific regulatory requirements in sectors such as finance, insurance, security, and investment quality assurance.
Related articles (Vietnamese version): https://www.dnp-law.com/vi/mot-so-dieu-kien-co-ban-doi-voi-nha-dau-tu-nuoc-ngoai-tai-viet-nam/
1. Forms of Establishing Foreign-Invested Enterprises
According to Article 24 of the Investment Law 2020, foreign investors may engage in investment activities in Vietnam through the following established forms:
1. Establishment of an economic organization.
2. Capital contribution, acquisition of shares, or purchase of capital contributions.
3. Implementation of an investment project.
4. Investment according to a Business Cooperation Contract (BCC).
5. Other investment forms and newly established types of economic organizations as regulated by the Government.
In instances where foreign investors contribute capital at the outset, the proportion of capital contribution may range from 1% to 100% of the charter capital, contingent upon the specific business sector and applicable legal provisions. This structure enables investors to exercise control and management over the enterprise from inception, establishing a foundation for long-term strategic development and profit optimization.
2. Conditions Regarding the Subject and Nationality of Foreign Investors
Foreign investors, encompassing both individuals and organizations, must fulfill the following criteria to establish Foreign Direct Investment (FDI) enterprises in Vietnam:
- Individuals and Organizations: Eligible investors include individuals aged 18 and above, as well as foreign entities from WTO member states or countries bound by bilateral investment treaties with Vietnam. Certain sectors permit participation solely by foreign organizations, imposing restrictions on individual investors.
Vietnam expressly prohibits foreign investors possessing passports featuring the “nine-dash line” from investing in the country and representing investment capital in domestic enterprises. This measure is enacted to safeguard national sovereignty.
- Nationality Regulations for Foreign Investors: Vietnamese law does not impose explicit nationality restrictions on foreign investors. However, all foreign investors must comply with Vietnamese laws and international treaties to which Vietnam is a signatory. Foreign investors must also secure approval from relevant authorities for their investments to ensure compliance with national security regulations, competition laws, and business conditions.
Detailed provisions regarding the subjects and nationalities of foreign investors are outlined in the Enterprise Law, Investment Law, and other relevant legal documents governing foreign investment in Vietnam.
3. Conditions for the Company’s Registered Office and Project Location
Foreign investors must own or lease a legal location for their project and headquarters in Vietnam, backed by valid lease contracts or land-use rights.This requirement is essential to ensure transparency and legality in investment operations. Investors may elect to invest in designated areas that offer investment incentives, thereby benefiting from government support and advantages.
According to Clause 2, Article 16 of the Investment Law 2020, investment incentive areas encompass:
3.1. Areas with Difficult or Extremely Difficult Socio-Economic Conditions:
Regions characterized by limited economic development, which offer numerous incentives to stimulate socio-economic growth, enhance community living standards, and improve infrastructure.
3.2. Industrial Zones, Export Processing Zones, High-Tech Zones, and Economic Zones:
Specially designed areas that support industrial and high-tech sectors, equipped with standardized infrastructure and industrial amenities aimed at attracting substantial, sustainable, and long-term investment projects.
4. Conditions Regarding Competence, Experience, and Sector-Specific Requirements
Foreign investors in Vietnam must meet specific requirements, especially in sectors affecting national security, economy, and culture. Decree 31/2021/ND-CP mandates compliance with standards of competence, experience, international commitments, and Vietnamese laws.
For example, investors in finance and insurance (banking, insurance, securities) must have relevant experience and adhere to financial safety standards due to their significant impact on the economy. Similarly, investors in natural resource sectors (mineral extraction, oil and gas, hydropower, wind, and nuclear energy) need licenses to ensure safe operations and environmental protection.
In addition, the transport sector is subject to stringent regulations. Foreign investors must comply with national and international transport safety standards. Air transport investments, in particular, are subject to strict regulations by Vietnamese aviation authorities. All transport sectors are heavily regulated to protect national interests and ensure service quality
Therefore, investors should carefully review the list of conditional investment sectors before investing in Vietnam to ensure compliance with legal requirements and avoid potential risks
However, the above information is for reference only and is provided by our company. For more details, please contact the information below for detailed advice:
—————————————————————–
* Contact information:
🏢 Address: 5th Floor, No. 52 Nguyen Thi Nhung Street, Van Phuc Urban Area, Hiep Binh Phuoc Ward, Thu Duc City, Ho Chi Minh City, Vietnam.
📩 Email: info@dnp-law.com.
📞 Hotline: 037 754 4312 (Ms.Tien).
Website: https://www.dnp-law.com/
