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I. Legal Basis: Investment Law 2020; Decree 31/2021/ND-CP detailing and guiding the implementation of some provisions of the Investment Law; International treaties to which Vietnam is a member. II. Sectors with Investment Restrictions in Vietnam: Restricted investment sectors are those where foreign investors must meet specific conditions when investing in Vietnam. The list of sectors subject to market access restrictions for foreign investors includes: Production and distribution of cultural products, including recordings. Production, distribution, and broadcasting of television programs and performing arts, stage performances, and films. Providing broadcasting and television services. Insurance; banking; securities business and other services related to insurance, banking, and securities. Postal and telecommunications services. Advertising services. Printing services, publishing services. Surveying and mapping services. Aerial photography services. Educational services. Exploration, exploitation, and processing of natural resources, minerals, oil, and gas. Hydroelectric, offshore wind, and nuclear energy. Transport of goods and passengers by rail, air, road, river, sea, and pipeline. Aquaculture. Forestry and hunting. Gambling, casino business. Security services. Construction, operation, and management of river ports, seaports, and airports. Real estate business. Legal services. Veterinary services. Trading and related activities directly connected with the buying and selling of goods by foreign service providers in Vietnam. Technical inspection and analysis services. Tourism services. Health and social services. Sports and entertainment services. Paper production. Production of vehicles with over 29 seats. Development and operation of traditional markets. Commodity exchange operations. Domestic cargo collection services. Auditing, accounting, bookkeeping, and tax services. Valuation services; consulting for the determination of business value for equitization. Services related to agriculture, forestry, and fishery. Aircraft production and manufacturing. Manufacturing of locomotives and railway cars. Production and business of tobacco products, tobacco materials, tobacco machinery, and equipment. Publishing operations. Shipbuilding and repair services. Waste collection services, environmental monitoring services. Commercial arbitration, arbitration mediation services. Logistics services. Coastal shipping transport. Cultivation, production, or processing of rare plant species, breeding of rare wildlife species, and the processing or treatment of such animals or plants, including live animals and products derived from them. Construction materials production. Construction and related technical services. Motorcycle assembly. Services related to sports, fine arts, performing arts, fashion shows, beauty pageants, modeling, and other recreational activities. Support services for air transport; ground technical services at airports; in-flight catering services; air navigation services, and meteorological services for aviation. Shipping agency services; tugboat services. Services related to cultural heritage, copyright and related rights, photography, recording, exhibition, festivals, libraries, museums. Services related to tourism promotion and advertising. Representation, agency services for recruitment, scheduling, and management of artists, athletes. Services related to family matters. E-commerce activities. Cemetery business, cemetery services, and funeral services. Seed planting and chemical spraying services by aircraft. Maritime pilot services. Sectors or activities invested in under a pilot mechanism by the National Assembly, Standing Committee of the National Assembly, the Government, or the Prime Minister. III. Sectors Prohibited for Investment in Vietnam: According to Article 6 of the 2020 Investment Law, prohibited business sectors include: Business in narcotic substances. Business in certain chemicals and minerals. Trading in specimens of wild plants and animals sourced from the wild. Prostitution-related businesses. Trade in humans, human organs, corpses, body parts, and human fetuses. Business activities related to human cloning. Trading in fireworks. Debt collection services.

On January 25, 2016, the Government issued Decree 07/2016/ND-CP detailing the Commercial Law on Representative Offices and Branches of Foreign Traders in Vietnam, replacing Decree No. 72/2006/ND-CP dated July 25, 2006, which detailed the Commercial Law on Representative Offices and Branches of Foreign Traders in Vietnam. Decree 07/2016/ND-CP took effect on March 10, 2016. Accordingly, foreign traders will only be granted a Branch Establishment License if they meet the following conditions: The foreign trader is established and registered according to the laws of their country or territory that is a member of an international treaty to which Vietnam is a party or is recognized by the laws of those countries or territories; The foreign trader has been in operation for at least 5 years, from the date of establishment or registration; If the foreign trader's business registration certificate or equivalent documents specify a period of operation, the remaining time must be at least 1 year from the date of submission of the application; The activities of the Branch must align with Vietnam's market opening commitments in international treaties to which Vietnam is a member and must be consistent with the foreign trader’s business scope; If the Branch's activities do not align with Vietnam's commitments or the foreign trader is from a country or territory not part of an international treaty to which Vietnam is a party, the establishment of the Branch must be approved by the Minister of the relevant managing ministry. Conditions in points 4 and 5 above are new requirements aligned with international treaties to which Vietnam is a member, signed after the enactment of the 2005 Commercial Law. These conditions ensure that the establishment of branches by foreign traders complies with Vietnam's international commitments. Documents required to establish a branch of a foreign trader include: Application for the Branch Establishment License using the form from the Ministry of Industry and Trade, signed by the authorized representative of the foreign trader; A copy of the business registration certificate or equivalent document of the foreign trader; A letter from the foreign trader appointing the head of the branch; A copy of audited financial reports or a document confirming the tax or financial obligations for the most recent fiscal year or equivalent documents issued by the competent authority in the country where the foreign trader is based, verifying the existence and activities of the foreign trader; A copy of the branch’s operational charter; A notarized copy of the passport, ID card, or citizenship card of the branch head; Documentation about the proposed branch office location, including a copy of the memorandum or lease agreement, or a document proving the foreign trader has the right to use the location; The branch location must comply with Vietnam’s laws on security, order, occupational safety, and other legal requirements. The branch office cannot sublet the premises. Foreign traders must submit the application in person, by post, or online (if eligible) to the licensing authority (Ministry of Industry and Trade). Within 3 working days of receiving the application, the licensing authority will review the documents and request additional information if necessary. This request for additional documents can be made only once during the review process. Branch Establishment License validity: The Branch Establishment License for a foreign trader is valid for 5 years, but it cannot exceed the remaining validity of the foreign trader’s business registration certificate or equivalent documents if those documents specify a period of operation. Conditions for the Branch Head: The Branch Head must be responsible to the foreign trader for their activities and the branch's operations within the scope authorized by the foreign trader. The Branch Head must be accountable for activities outside the scope of their authorization. If the Branch Head leaves Vietnam, they must delegate authority to another person in writing to carry out their duties, with the foreign trader's consent. The Branch Head remains responsible for the delegated duties. If the Branch Head does not return within the authorized time and has not delegated their authority, the person authorized may continue carrying out the Branch Head’s responsibilities until the Branch Head returns or the foreign trader appoints a new Branch Head. If the Branch Head is absent from Vietnam for more than 30 days without delegating their responsibilities, or in case of death, disappearance, detention, imprisonment, or legal incapacity, the foreign trader must appoint a new Branch Head. The Branch Head cannot hold the following positions: Head of the representative office of another foreign trader; Head of the representative office of the same foreign trader; Legal representative of an economic organization established under Vietnamese law. Authority to issue the Branch Establishment License: Foreign traders submit their branch establishment applications to the Ministry of Industry and Trade. Publication of Branch Information: Within 15 days from the date of issuance, reissuance, modification, extension, or revocation of the Branch Establishment License, the licensing authority is responsible for publishing the following information on its official website: The name and address of the branch office; The name and address of the foreign trader; The Branch Head’s name; The license number, issuance date, validity, and the issuing authority; The branch’s operational activities; The date of reissuance, modification, extension, or revocation of the branch’s license. If you encounter any difficulties or need consultation, please contact us for more details.

1. Conditions for Investors to Invest Through Capital Contribution, Share Purchase, or Capital Share Purchase: a) Foreign investors must meet the conditions for market access for foreign investors;b) Ensure national defense and security in accordance with the Investment Law 2020;c) Comply with land law regulations regarding the conditions for land use rights, land use conditions on islands, border communes, wards, towns, coastal communes, wards, towns. 2. Investors May Contribute Capital to Economic Organizations in the Following Forms: The forms of investment participation through capital contribution, share purchase, and capital share purchase are stipulated in Article 25 of the Investment Law 2020 as follows: a) Purchase shares from a joint-stock company, either from the company itself or its shareholders;b) Purchase capital contributions from a limited liability company member to become a member of the limited liability company;c) Purchase capital contributions from a partner in a partnership company to become a contributing partner in the partnership;d) Purchase capital contributions from a member of another economic organization, not falling under the cases stipulated in points a, b, and c of this section. 3. Components of the Investment Procedure Documentation for Capital Contribution, Share Purchase, and Capital Share Purchase: a) Registration document for capital contribution, share purchase, or capital share purchase (Form A.I.7.docx);b) A copy of the legal documents of the individual, organization contributing capital, purchasing shares, purchasing capital contributions, and the economic organization with foreign investment;c) A written agreement outlining the principles of capital contribution, share purchase, or capital share purchase between the foreign investor and the economic organization with foreign investment, or between the foreign investor and the shareholders or members of that economic organization;d) A copy of the land use rights certificate of the economic organization with foreign investment (in cases stipulated in point b, Clause 4, Article 65 of Decree 31/2021/NĐ-CP). – Number of sets of documents: 01 set.– Competent authority to handle: Department of Planning and Investment.– Processing time: 15 days from the date of receipt of valid documents. If the economic organization with foreign investment has a land use certificate for land in islands, border communes, wards, towns, or coastal communes, or in areas affecting national defense and security: 27 days from the date of receipt of valid documents. This is the consulting content we provide regarding the procedure for foreign investors to invest through capital contribution, share purchase, or capital share purchase. If you need to find an experienced consulting firm regarding business and legal issues related to investment activities in Vietnam, please contact us for further guidance!

Maximum Time for Project Timeline Adjustment for Investment Projects with Approved Investment Policies: According to Clause 4, Article 41 of the 2020 Investment Law, for investment projects with an approved investment policy, the investor may not adjust the project timeline by more than 24 months compared to the initial investment approval timeline. However, this does not apply in the following cases: To rectify the consequences of force majeure events as stipulated by civil law and land law. The project timeline is adjusted due to delays in land allocation, land lease, or land-use change approval by the state. The project timeline is adjusted at the request of state management authorities, or due to delays in administrative procedures by state agencies. The project timeline is adjusted due to changes in the planning by state authorities. The project objectives as specified in the initial investment policy approval document are changed; new objectives that require approval of the investment policy are added, or the total investment capital increases by 20% or more, which alters the project scale. 2. Maximum Time for Project Timeline Adjustment for Investment Projects with Only Investment Registration Certificate: According to Official Letter No. 2541/CV-TCT in 2022, the maximum time to adjust the project timeline for investment projects with only an Investment Registration Certificate is as follows: According to Clause 4, Article 41 of the Investment Law, for investment projects with an approved investment policy, the investor may not adjust the project timeline by more than 24 months compared to the initial investment approval timeline. Thus, the limitation on the project timeline adjustment, as specified in Clause 4, Article 41 of the Investment Law, applies only to projects with an approved investment policy. It does not apply to projects that only operate under an Investment Registration Certificate without an approved investment policy. If you need a consultancy firm with experience in investment services, please contact us.

Comprehensive and effective market research is the key to the success of investment plans in Vietnam for foreign enterprises. Market research is a tool that helps investors gain a better understanding of the market and customers, enabling them to devise appropriate market entry strategies. The more knowledge investors have about the market and potential customers, the greater the chances that customers will choose and trust the company's products. Kim Húc’s latest results help clients minimize risks, while also defining the direction and supporting investors in making important business investment decisions.

Non-life insurance business in Vietnam is increasingly developing, and foreign enterprises view Vietnam as a potential market for the growth of this industry. So, what legal conditions do foreign enterprises need to meet to invest in Vietnam? The following information will assist businesses in the process of application, understanding, and obtaining a business license in Vietnam. 1. Legal Basis: Insurance Business Law 2022 Decree 80/2019/NĐ-CP 2. Conditions for Foreign Non-Life Insurance Enterprises: For organizations and individuals participating in capital contribution: They must not fall under the restricted categories specified in Clause 2, Article 18 of the Enterprise Law. Organizations and individuals contributing capital must contribute in cash and cannot use borrowed funds or investment funds from other organizations or individuals. Organizations contributing 10% or more of the charter capital must have been profitable for the three consecutive years prior to the submission of the application for a license and must not have accumulated losses at the time of submission. If the contributing organization is an insurance or reinsurance company licensed to operate in Vietnam, it must have been profitable for the last three financial years and meet the capital adequacy ratio requirements as stipulated by law. For the insurance or insurance brokerage business to be established: The charter capital must be in Vietnamese Dong and not be lower than the minimum amount set by the government. The business type and company charter (for insurance and insurance brokerage companies) must comply with legal regulations. There must be a manager or supervisor for the business or branch being established. 3. Procedures for Establishing a Foreign-Invested Insurance Business: Step 1: Prepare Documents: The documents must include: Application for a license as per the form in Annex I of Decree 46/2023/NĐ-CP. Draft company charter. A 5-year operation plan that aligns with the proposed business field, clearly stating the required contents. Personal identification documents of the foreign investor; CV, copies of diplomas, certificates, and other documents proving the qualifications and standards for the proposed company manager. List of capital contributors for a limited liability company (LLC); shareholder documents for a joint-stock company (JSC). Bank confirmation of the paid-up charter capital deposited in a blocked account at a bank in Vietnam. Documentation from the competent state authority confirming that the Vietnamese organization has met financial safety conditions and is permitted to contribute capital to the establishment of an insurance company as per the specialized legal regulations. Power of attorney (if any). Step 2: Submit Documents: Submit documents to the Ministry of Finance. Step 3: Reception and Resolution: The Ministry of Finance will notify in writing if additional documents or modifications are required within 30 days from the receipt of the application. Within 60 days from receiving a complete and valid application, the Ministry of Finance will issue the business license. If the application is denied, the Ministry of Finance will provide a written explanation of the reasons.

Currently, Vietnam has joined many global economic organizations with open commitments to foreign investors in Vietnam. As a result, foreign enterprises, organizations, and individuals consider Vietnam as a potential investment market. However, the overlapping and conflicting legal system in many documents also makes it difficult for foreign enterprises and individuals when they intend to invest in Vietnam. This article outlines the legal provisions regarding the foreign investor's capital ownership ratio in enterprises when investing in Vietnam. 1. Legal Basis: Enterprise Law 2020 Investment Law 2020 Securities Law 2019 Decree 155/2020/ND-CP 2. How do foreign enterprises invest in Vietnam? According to Clause 19, Article 3 of the Investment Law 2020, a foreign investor is an individual with foreign nationality or an organization established under foreign laws conducting investment activities in Vietnam. Based on Article 21 of the Investment Law 2020, foreign investors can carry out investment activities in Vietnam in the following forms: Investment to establish economic organizations. Investment to contribute capital, purchase shares, or purchase capital contributions. Implementation of investment projects. Investment in the form of BCC (Business Cooperation Contract). Other forms of investment and types of economic organizations as regulated by the Government. 3. Foreign Investor's Capital Ownership Ratio in Vietnamese Enterprises: Point a, Clause 3, Article 9 of the Investment Law 2020 stipulates: "3. Market access conditions for foreign investors specified in the list of sectors and industries with restricted market access for foreign investors include: a) The foreign investor's ownership ratio in the charter capital of the economic organization." Thus, one of the conditions for foreign investors contributing capital to a Vietnamese enterprise is to meet the required ownership ratio of charter capital. According to Clauses 7, 8, and 9, Article 17 of Decree 31/2020/ND-CP, market access conditions (including ownership ratio requirements) are applied according to international investment treaties. Clause 10, Article 17 of Decree 31/2020/ND-CP stipulates the restriction on the foreign ownership ratio under international investment treaties as follows: In cases where multiple foreign investors contribute capital, buy shares, or purchase capital contributions into an economic organization and are subject to one or more international investment treaties, the total foreign ownership ratio in that economic organization must not exceed the highest ownership ratio specified in an international treaty that sets a foreign investor ownership limit for a specific sector or industry. In cases where foreign investors from the same country or territory contribute capital, buy shares, or purchase capital contributions into an economic organization, the total ownership ratio of all such investors must not exceed the foreign ownership ratio limit as prescribed by the international investment treaty applicable to those investors. For public companies, securities companies, fund management companies, or securities investment funds, and investment companies, if the securities law provides different foreign ownership ratios, then the securities law provisions shall apply: For public companies, the foreign ownership ratio is 50% (according to Article 139 of Decree 155/2020/ND-CP). For securities companies, securities investment companies, securities investment funds, the foreign ownership ratio can go up to 100% (according to Article 77 of the Securities Law 2019). In cases where the economic organization operates in multiple sectors, and the international investment treaties have different foreign ownership ratios for each sector, the foreign ownership ratio in the organization must not exceed the lowest limit for the sector with the most restrictive foreign ownership ratio. Thus, the foreign ownership ratio is determined based on international treaties applicable to the investment sectors. For consultation, please contact us.

I. Legal Basis: Investment Law 2020; Decree 31/2021/ND-CP detailing and guiding the implementation of several provisions of the Investment Law; International treaties of which Vietnam is a member. II. Sectors with Investment Restrictions in Vietnam: Restricted sectors are those where foreign investors must meet specific conditions when investing in Vietnam. The list of sectors with conditional market access for foreign investors includes: Production and distribution of cultural products, including recorded images. Production, distribution, and screening of television programs and musical, dance, theatrical, and cinematic works. Broadcasting and television services. Insurance; banking; securities business and other services related to insurance, banking, and securities. Postal and telecommunications services. Advertising services. Printing services, publishing services. Surveying and mapping services. Aerial photography services. Educational services. Exploration, extraction, and processing of natural resources, minerals, oil, and gas. Hydropower, offshore wind power, and nuclear energy. Transportation of goods and passengers by rail, air, road, waterway, sea, and pipeline. Aquaculture. Forestry and hunting. Gambling, casinos. Security services. Construction, operation, and management of river ports, seaports, and airports. Real estate business. Legal services. Veterinary services. Trade and activities directly related to the trading of goods by foreign service providers in Vietnam. Technical inspection and analysis services. Tourism services. Healthcare and social services. Sports and entertainment services. Paper production. Manufacturing transport vehicles with more than 29 seats. Development and operation of traditional markets. Commodity exchange activities. Domestic freight collection services. Audit, accounting, bookkeeping, and tax services. Valuation services; consulting on enterprise valuation for equitization. Services related to agriculture, forestry, and fishery. Aircraft manufacturing. Manufacturing of railway locomotives and carriages. Production and business of tobacco products, tobacco materials, machinery, and equipment in the tobacco industry. Publisher operations. Shipbuilding and repair services. Waste collection, environmental monitoring services. Commercial arbitration, mediation services. Logistics services. Coastal maritime transport. Cultivation, production, or processing of rare plants, breeding of rare wild animals, and processing of these animals or plants, including live animals and products derived from them. Building materials production. Construction and related technical services. Motorcycle assembly. Services related to sports, fine arts, performing arts, fashion shows, beauty pageants, models, and other recreational activities. Air transport support services; ground services at airports; in-flight catering services; navigation information services, meteorological services for aviation. Marine shipping agency services; tugboat services. Services related to cultural heritage, copyright, related rights, photography, video/audio recording, art exhibitions, festivals, libraries, museums. Services related to tourism promotion and marketing. Talent agency, recruitment, scheduling, and management services for artists and athletes. Family-related services. E-commerce activities. Cemetery business, cemetery services, and funeral services. Seed sowing and chemical spraying services by aircraft. Marine pilot services. Sectors that require pilot investment mechanisms by the National Assembly, the Standing Committee of the National Assembly, the Government, or the Prime Minister. III. Sectors Prohibited for Investment in Vietnam: According to Article 6 of the Investment Law 2020, the following sectors are prohibited from investment: Trading in narcotic substances. Trading in chemicals and minerals. Trading in specimens of wild plant and animal species extracted from nature. Engaging in prostitution. Buying and selling of people, human organs, bodies, body parts, or human embryos. Activities related to human cloning. Trading in fireworks. Providing debt collection services.

Although according to the WTO commitment schedule, Vietnam does not commit to real estate business services for foreign investors, the Real Estate Business Law clearly stipulates the scope and forms of real estate business for enterprises with foreign investment. 1. Legal Basis: Investment Law 2020; Enterprise Law 2020; Consolidated Document No. 12/VBHN-VPQH of 2020, consolidating the Real Estate Business Law, issued by the National Assembly Office. 2. Conditions for Real Estate Business of Enterprises with Foreign Investment: Must be legally established as a business entity under the regulations. The forms in which foreign-invested companies are allowed to conduct real estate business include: Renting houses and construction works and subleasing them; If the land is leased by the State, foreign investors are allowed to build housing for rent; build housing or construction works for sale, lease, or lease-purchase; Acquiring projects partially or fully to build housing, construction works for sale, lease, or lease-purchase; If the land is allocated by the State, foreign investors are allowed to invest in housing for sale, lease, or lease-purchase. 3. Procedures for Establishing a Foreign-Invested Real Estate Business Company: Step 1:  Submit an application for an Investment Registration Certificate to allow the foreign investor to establish a real estate business company. The application includes: A request letter to implement the real estate investment project, following the prescribed form; A project proposal with complete information about the project, according to the prescribed form; A copy of the legal documents proving the address of the company to be established for real estate business. A notarized copy of personal identification documents if the foreign investor is an individual, or a notarized copy of the valid business registration certificate or other documents proving the legal status if the foreign investor is an organization; a copy of the bank account balance confirmation corresponding to the registered investment capital of the foreign investor establishing the real estate business company, or financial statements or financial support commitments... A technology explanation document in case the real estate business project uses restricted technology transfer. Submit the application to the Department of Planning and Investment where the main office of the foreign-invested real estate business company is planned to be located. Step 2:  Submit the application for a Business Registration Certificate to establish the foreign-invested real estate business company. The application includes: A registration application form for establishing a foreign-invested real estate business company, according to the prescribed form; The company's charter, which includes the business sectors related to the foreign-invested real estate business and full information about the company; A list of all investors if the company type is a limited liability company with two or more members, or a list of founding shareholders if the company opts for the joint-stock company type; A notarized copy of the valid personal identification documents of all members if the foreign investor is an individual, or a notarized copy of the valid establishment license of all members if the foreign investor is an organization; A power of attorney if the foreign investor is not directly submitting the application; The investment registration certificate issued in Step 1 by the investment registration authority for the real estate business company. Submit the application to the Business Registration Division under the Department of Planning and Investment of the province where the foreign investor intends to establish the foreign-invested real estate business company. Step 3:  Carry out activities after company establishment, such as: Announcing the company's information; Making company seals and notifying the seal sample; Purchasing invoices, etc. For consultation on establishing a foreign-invested real estate business company, please contact us.

Forms of Investment Incentives: The forms of investment incentives are specifically regulated in Clause 1, Article 15 of the 2020 Investment Law, including the following: Corporate income tax incentives , including applying lower corporate income tax rates than the regular rate for a specified period or for the entire duration of the investment project; tax exemptions, tax reductions, and other incentives according to the law on corporate income tax. Exemption from import duties  on goods imported to create fixed assets; raw materials, supplies, and components imported for production according to the law on export and import duties. Exemption or reduction of land use fees, land rental fees, and land use taxes. Accelerated depreciation , increasing the deductible expenses when calculating taxable income. 2. Entities Eligible for Investment Incentives: According to Clause 2, Article 15 of the 2020 Investment Law, entities eligible for investment incentives include: Investment projects in industries, occupations eligible for investment incentives or special investment incentives (Appendix II of Decree 31/2021/ND-CP). Investment projects in areas with difficult socio-economic conditions or areas with particularly difficult socio-economic conditions (Appendix III of Decree 31/2021/ND-CP). Investment projects with a capital scale of VND 6,000 billion or more, disbursing at least VND 6,000 billion within three years from the date of receiving the investment registration certificate or investment policy approval, and meeting one of the following criteria: having total revenue of at least VND 10,000 billion per year by the latest three years from the year of revenue, or employing more than 3,000 workers. Investment projects for building social housing; investment projects in rural areas using 500 or more workers; investment projects employing disabled people as defined by the law on disabled persons. High-tech enterprises, scientific and technological enterprises, scientific and technological organizations; projects with technology transfer under the list of technologies encouraged for transfer as regulated by the law on technology transfer; technology incubators, scientific and technological enterprise incubators according to the laws on high technology, and the law on science and technology; enterprises producing, providing technologies, equipment, products, and services serving environmental protection as stipulated by the law on environmental protection. Investment projects for creative startups, innovation centers, research, and development centers. Investment in business distribution chains for small and medium-sized enterprises (SMEs); investment in business technical support facilities for SMEs, business incubators for SMEs; investment in co-working spaces supporting SMEs for creative startups as stipulated by the law on supporting SMEs. Clients interested in investment registration and consultancy services are welcome to contact us.