In the context of increasing integration and fierce competition, legal regulations on investment licenses in Vietnam have been continuously improved with the main aim of facilitating investors while ensuring sustainable development and socio-economic stability. Below, NPLaw would like to provide key legal aspects relating to investment licenses in Vietnam.
I. Current situation of investment licenses
The current status of investment licenses in Vietnam has witnessed significant improvements, particularly due to reforming administrative procedures and applying information technology. The process of obtaining Investment Registration Certificates (IRC) has become faster and more simplified in many provinces, thereby contributing to an improved investment market and attracting strong capital inflows both domestically and internationally.
However, in practice, overlaps in legal regulations, inconsistent coordination among State management authorities, and difficulties in assessing investment conditions for sectors involving foreign elements or conditional business lines still exist. Additionally, some localities remain confused in applying planning frameworks or lack transparent criteria for investor selection. These issues request the need for further refinement of the legal framework and enhance implementation capacity to ensure procedures for investment licenses are conducted transparently, effectively, and fairly.
II. Legal provisions on investment licenses
1. What is an investment license?
An investment license refers to the process through which a competent State authority considers, appraises, and approves a domestic or foreign investor to implement an investment project in Vietnam by issuing an Investment Registration Certificate.
2. Conditions for obtaining investment licenses
According to Clause 3, Article 36 of Decree No. 31/2021/NĐ-CP, for investment projects not subject to investment policy approval, investors must satisfy the following conditions to be granted an Investment Registration Certificate:
- The project must not fall under prohibited business lines as prescribed in Article 6 of the Investment Law and international treaties to which Vietnam is a member;
- A clear project location must be available and evidenced by legal documents such as a land use rights certificate, lease agreement, or other documents proving the investor’s lawful right to use the location;
- The project must align with the planning frameworks in accordance with Clause 7, Article 31 of Decree No. 31/2021/NĐ-CP;
- Meet the conditions on investment rate per land area as prescribed by the Provincial People's Committee, based on the actual conditions of the locality, and approved by the Standing Committee of the Provincial People's Council, and at the same time meet the requirements on the number of employees;
- The investor must meet market access conditions for foreign investors in accordance with Vietnam’s international commitments.
Thus, for projects not requiring investment policy approval, the investor must fully meet all of the above conditions to obtain an investment license in Vietnam.
3. Procedures for investment licenses
Step 1: Identifying the project type
- Investors must determine whether the project is subject to investment policy approval as per Articles 30, 31, and 32 of the Investment Law 2020. If requested, they must first complete such procedures before applying for an Investment Registration Certificate.
Step 2: Preparing a dossier for the Investment Registration Certificate
Pursuant to Article 33 of the Investment Law 2020, an application dossier includes:
- For investor-initiated projects:
+ Written request for project implementation;
+ Legal status documents of the investor;
+ Proof of financial capacity (e.g., financial statements, funding commitment);
+ Project proposal (objectives, scale, capital, location);
+ Land use right documents (if not requesting land allocation by the State);
+ Technology explanation (if required);
+ BCC contract (if applicable);
+ Other relevant documents as required by law.
- For projects proposed by competent authorities:
+ Submission requesting investment policy approval;
+ Detailed project proposal with similar contents as above.
Step 3: Submitting the dossier
According to Article 39 of the Investment Law 2020, the dossier must be submitted to the appropriate authority:
- Department of Planning and Investment for:
+ Projects outside industrial zones, export processing zones, high-tech parks, and economic zones;
+ Projects inside such zones in localities without a management Board;
+ Projects spanning multiple provinces/cities or located both inside and outside zones.
- Management Boards for:
+ Projects entirely located within zones that already have a management Board.
Step 4: Appraising the dossier and issuing the Investment Registration Certificate
- If the dossier is complete and valid, the investment registration authority will issue the Investment Registration Certificate. If incomplete, the authority will request supplements or corrections.
Step 5: Applying for an Enterprise Registration Certificate (ERC)
- After obtaining the Investment Registration Certificate, the investor must submit an application to the Department of Planning and Investment to obtain an Enterprise Registration Certificate (e.g., for forming Limited Liability Companies or Joint Stock Companies).
III. Questions about investment licenses
1. What is the processing time for investment licenses?
According to Article 38 of the Investment Law 2020:
- For projects subject to investment policy approval: 05 working days from the date of receiving the approval decision and investor approval.
- For projects not subject to approval: 15 working days from the date the valid application is received.
2. Which business sectors require investment licenses?
Under Articles 37 and 23 of the Investment Law 2020, investment licenses are required for:
- Projects implemented by foreign investors;
- Projects by economic organizations with foreign ownership in one of the following:
+ Foreign investors hold 51% of charter capital or more;
+ Foreign investors indirectly hold 51% through other entities or more;
+ Total foreign ownership reaches 51% or more.
These investors must obtain the Investment Registration Certificate especially when investing in conditional business sectors listed in Annex IV of the Investment Law 2020.
3. Which authorities have the power to approve investment projects?
Articles 30–32 of the Investment Law 2020 assign the following approval powers:
- National Assembly: Projects with serious environmental impact; land conversion of 500 ha of rice fields or more; projects requiring relocation of 20,000 people in mountainous areas or more, or more than 50,000 in others; or requiring special mechanisms/policies.
- Prime Minister:
+ Projects involving relocation of 10,000 people in mountainous areas or more or more than 20,000 elsewhere;
+ Large-scale infrastructure for airports, ports, industrial parks, export processing zones;
+ Projects with international elements for foreign investments in telecoms, forestry, press or have special scale in other industries;
+ Projects spanning multiple provinces for projects requiring approval from two or more provincial People's Committees.
- Provincial People’s Committee:
+ Land projects: Projects that request the State to allocate land, lease land or change land use purposes (not through auction or bidding).
+ Housing construction projects, small urban areas: Projects with a scale of less than 50 hectares and a population of less than 15,000 people in urban areas, or a scale of less than 100 hectares and a population of less than 10,000 people in non-urban areas.
+ Projects with special factors: Investment projects in border areas, coastal areas, islands, or areas that affect national defense and security.
+ Projects in industrial parks, export processing zones: Projects in industrial parks, export processing zones, high-tech zones, economic zones, if consistent with the planning approved by competent authorities, the Management Board of these areas will approve the investment policy.
4. Are foreign investors required to apply for the investment license?
Pursuant to Clause 1, Article 37 of the Investment Law 2020, foreign investors must obtain the Investment Registration Certificate before implementing a project, including:
- Direct foreign investors;
- Investment projects of economic organizations with foreign investment capital as prescribed in Clause 1, Article 23 of the Investment Law 2020 (i.e. economic organizations with 50% foreign capital or more, or with foreign investors holding controlling rights...).
5. In what cases will investment licenses be denied?
According to Clause 3, Article 36 of Decree No. 31/2021/NĐ-CP, Investment Registration Certificates will be denied if any of the following conditions are not met:
- The project falls under prohibited sectors as prescribed in Article 6 of the Investment Law 2020 and international treaties on investment to which Vietnam is a member;
- No clear or valid project location is submitted, that is failure to present valid copies of documents proving land use rights, such as Land Use Rights Certificate, lease contract/agreement, or equivalent legal documents;
- The project is inconsistent with applicable planning prescribed in Clause 7, Article 31 of the same Decree;
- The investment rate per land area or labor usage is inadequate as prescribed by the Provincial People's Committee and approved by the Standing Committee of the Provincial People's Council;
- Market access conditions for foreign investors are not satisfied per Vietnam’s international commitments.
IV. Legal consulting services on investment licenses
The above article from NPLaw outlines the legal framework and procedures for investment licensing in Vietnam. With a team of experienced lawyers and legal consultants, NPLaw is always ready to provide consultation and assist clients with legal matters related to investment licensing. For further support, please contact:
