In the context of deep economic integration, Vietnam has increasingly become an attractive destination for foreign investors. Establishing business partnerships between domestic enterprises and foreign partners not only creates opportunities for growth but also requires strict compliance with legal regulations. This article provides an overview of the legal framework governing business partners in Vietnam.

I. Current demand for business partners in Vietnam

With stable economic growth, an improved investment environment, and market liberalization policies, Vietnam continues to attract significant interest from international enterprises.

Foreign investors are seeking local partners to expand operations, access domestic markets, leverage abundant labor resources, and optimize operating costs. This has generated strong demand for establishing and maintaining business partnerships with enterprises in Vietnam.

II. Legal provisions on business partners in Vietnam

1. What is a business partner in Vietnam?

In practice, a business partner in Vietnam generally refers to foreign organizations or individuals engaging in commercial, investment, or service activities with Vietnamese enterprises under legally recognized cooperation structures. Common forms include joint ventures, investment cooperation, business cooperation contracts (BCC), capital contributions, share acquisitions, or establishment of new enterprises.

2. What conditions must foreign investors meet to do business in Vietnam?

Depending on the investment structure, foreign investors are required to satisfy certain conditions:

  • Establishing an Economic Organization (Article 22, Law on Investment 2020):
  • Investors must comply with market access conditions applicable to foreign investors under Article 9 of the Law;
  • Prior to establishment, investors must have an investment project and complete procedures for issuance or amendment of the Investment Registration Certificate, except in cases involving startups or venture capital funds as provided by laws supporting small and medium-sized enterprises.
  • Capital contribution, share purchase, or acquisition of capital contribution (Clause 2, Article 24, Law on Investment 2020):
  • Investors must comply with market access conditions under Article 9;
  • Investors must ensure compliance with national defense and security interests;
  • Investors are required to comply with land regulations relating to land use rights in islands, border communes/wards/towns, and coastal areas.
  • Investment Projects (Clause 1, Article 25, Decree 31/2021/ND-CP):
  • Unless exempted under Points a, b, c and d, Clause 1, Article 43 of the Law on Investment, investors are required to make a deposit or obtain a guarantee from a licensed credit institution in Vietnam to secure the implementation of projects involving land allocation, land lease, or land-use conversion.
  • Business Cooperation Contracts (BCC) (Article 27, Law on Investment 2020):
  • A BCC between domestic investors follows the provisions of civil law;
  • A BCC between domestic and foreign investors, or between foreign investors, must undergo procedures for obtaining an Investment Registration Certificate under Article 38;
  • Parties must establish a coordinating board to implement the BCC, with roles and responsibilities determined by mutual agreement.

3. What sectors are restricted for foreign investors in Vietnam?

Pursuant to Point b, Clause 2, Article 9 of Law on Investment 2020, foreign investors are subject to the same market access conditions as domestic investors, except for sectors on the restricted or prohibited list.

Under Appendix I, Section A of Decree 31/2020/ND-CP, restricted sectors include some following forms:

  • Trading of goods/services subject to state monopoly in commerce;
  • Conducting press and news-gathering activities in any form;
  • Fishing and exploiting marine resources;
  • Providing investigation and security services.

Accordingly, foreign investors are prohibited from engaging in sectors not yet open to market access.

III. Questions on business partners in Vietnam

1. Can foreign investors establish a 100% foreign-owned company in Vietnam?

Current regulations allow foreign investors to establish wholly foreign-owned companies in Vietnam. It is a common and encouraged form of investment in many sectors, except those prohibited or restricted under the Law on Investment 2020 and applicable international treaties.

2. Can foreign investors own real estate in Vietnam?

  • Under Clause 1, Article 17 of Law on Housing 2023: Foreign-invested enterprises developing housing projects; foreign-invested enterprises, and their branches and representative offices; foreign investment funds; and foreign bank branches operating in Vietnam, as well as foreign individuals lawfully entering Vietnam, are eligible to own residential properties.
  • Under Clause 1, Article 28 of the 2024 Land Law, the recipients of land use rights include:
  • Foreign-invested economic organizations and overseas Vietnamese who are permitted to enter Vietnam may receive land use rights by transfer within industrial zones, industrial clusters, and hi-tech zones;
  • Foreign-invested economic organizations may receive transferred investment capital in the form of land use rights value, as prescribed by the Government;
  • Economic organizations and foreign-invested economic organizations may receive contributed capital in the form of land use rights;
  • Foreign-invested economic organizations may be allocated land by the State for the implementation of housing construction projects for sale or for sale combined with lease;
  • Foreign-invested economic organizations and foreign organizations with diplomatic functions may be leased land by the State. 

Thus, foreign-invested enterprises are permitted to own housing and hold land-use rights in accordance with the above provisions.

3. How can business partners as foreign investors repatriate funds?

Pursuant to Clause 3, Article 8, Circular 06/2019/TT-NHNN on foreign exchange management for foreign direct investment:

  • If an investor is not granted an Investment Registration Certificate or decides not to proceed with an investment project, they may transfer abroad the remaining foreign currency or purchase foreign currency for remittance, including accrued profits (if any), after deducting lawful expenses incurred during the process of implementing investment procedures in Vietnam.

Accordingly, foreign investors are entitled to repatriate remaining funds and profits in compliance with these provisions.

IV. Legal advisory services on business partners in Vietnam

The foregoing provides NPLaw’s overview on business partners in Vietnam. With an experienced team of lawyers and legal specialists, NPLaw delivers professional and reliable legal services, ensuring the best protection of clients’ lawful rights and interests. For legal support, please contact NPLaw directly.