In the context of globalization and international economic integration, Vietnam is increasingly becoming an attractive destination for foreign investors. In order to establish a clear, transparent, and favorable legal framework for investment activities, Vietnam’s legal system has continuously been improved and refined. The current legal regulations governing foreign investment in Vietnam not only demonstrate the Government’s strong commitment to attracting investment capital but also ensure the necessary level of control over sensitive sectors. In the following article, NPLaw will clarify the current legal regulations relating to investment activities conducted by foreign investors in Vietnam.

I. Current demand for investment regulations by investors

The demand for investment regulations by foreign investors in Vietnam is continuously increasing, reflecting significant interest in the Vietnamese market within deep international economic integration. Vietnam has become an attractive destination due to its stable political environment, competitive labor costs, and extensive network of free trade agreements (FTAs). According to reports issued by the World Bank, Vietnam is currently among the most attractive emerging markets in Southeast Asia.

To meet this demand, Vietnam’s legal framework has been continuously updated and improved. Regulations such as the Law on Investment 2020, Decree No. 31/2021/ND-CP, Decree No. 69/2025/ND-CP regarding share acquisition in credit institutions, and Circular No. 20/2025/TT-BTC on indirect investment capital accounts have been promulgated to establish a clear and transparent legal basis for foreign investors.

II. Regulations on investment by foreign investors in Vietnam

1. Regulations on whether foreign investors are permitted to invest in Vietnam

Foreign investors are permitted to invest in Vietnam; however, they must comply with legal regulations regarding investment sectors, ownership ratios, and licensing procedures in accordance with the Law on Investment 2020.

2. Regulations on forms of investment by foreign investors in Vietnam

Pursuant to Article 21 of the Law on Investment 2020, the forms of investment include:

  • Investment through the establishment of economic organizations;
  • Capital contribution, purchase of shares, or acquisition of capital contributions;
  • Implementation of investment projects;
  • Investment under Business Cooperation Contracts (BCCs);
  • New forms of investment and new types of economic organizations as prescribed by the Government.

3. Regulations on sectors in which foreign investors are prohibited from investing in Vietnam

Prohibited sectors refer to sectors in which market access has not yet been granted. Section A, Appendix I of Decree No. 31/2020/ND-CP sets out sectors in which foreign investors are not permitted market access, including:

  • Trading in goods and services subject to the State monopoly in the commercial sector;
  • Press activities and news collection activities in all forms;
  • Fishing and exploitation of aquatic resources;
  • Investigation and security services;
  • Judicial administrative services, including judicial expertise services, bailiff services, property auction services, notary services, and services provided by asset managers and liquidators.

III. Questions regarding investment regulations

1. Regulations on whether foreign investors may invest in Vietnam using U.S. Dollars

Pursuant to Article 4 of Circular No. 06/2019/TT-NHNN, foreign investors are permitted to contribute investment capital in foreign currencies or Vietnamese Dong in accordance with the capital contribution amount stated in the Investment Registration Certificate or the Establishment and Operation License under specialized laws (for enterprises with foreign direct investment established and operating under specialized legislation).

Accordingly, foreign investors are permitted to invest in Vietnam using U.S. dollars.

2. Regulations on authorities competent to issue investment licenses

The authority to issue Investment Registration Certificates is specifically guided under Article 34 of Decree No. 31/2021/ND-CP as follows:

- The Department of Finance where the investor implements the investment project or where the operating office is or is expected to be located shall issue Investment Registration Certificates for the following projects:

  • Investment projects implemented in two or more provincial-level administrative units;
  • Investment projects implemented both inside and outside industrial parks, export processing zones, high-tech zones, and economic zones;
  • Investment projects in industrial parks, export processing zones, high-tech zones, or economic zones where the management board has not yet been established or where the project does not fall within the management authority of such management board.

- The Management Boards of industrial parks, export processing zones, high-tech zones, and economic zones shall issue Investment Registration Certificates for the following projects:

  • Investment projects involving the construction and business operation of infrastructure for industrial parks, export processing zones, high-tech zones, and functional areas within economic zones;
  • Investment projects implemented within industrial parks, export processing zones, high-tech zones, and economic zones.

3. Regulations on conditions for foreign investors to invest in Vietnam

Pursuant to the Law on Investment 2020, the conditions applicable to foreign investors investing in Vietnam include:

  • The foreign investor’s ownership ratio in the charter capital of an economic organization;
  • Forms of investment;
  • Scope of investment activities;
  • Vietnamese partners participating in the investment activities;
  • Other conditions in accordance with international treaties and Vietnamese law.

4. Regulations on tax incentives for foreign investors investing in Vietnam

The forms of investment incentives prescribed under Clause 1, Article 15 of the Law on Investment 2020 include:

  • Corporate income tax incentives, including the application of lower tax rates than ordinary tax rates for a definite or indefinite period during the implementation of the investment project; tax exemption, tax reduction, and other incentives in accordance with the law on corporate income tax;
  • Import duty exemptions for imported goods used to create fixed assets, and imported raw materials, supplies, and components used for production in accordance with the laws on export and import duties;
  • Exemption or reduction of land use fees, land rental fees, and land use taxes;
  • Accelerated depreciation and increased deductible expenses for taxable income calculation purposes.

5. Regulations on ownership limits and capital transfer by foreign investors in vietnam

Pursuant to Clause 10, Article 17 of Decree No. 31/2021/ND-CP, restrictions on foreign ownership ratios under international investment treaties shall apply as follows:

  • Where multiple foreign investors contribute capital, purchase shares, or acquire capital contributions in an economic organization and are subject to one or more international investment treaties, the aggregate ownership ratio of all foreign investors in such economic organization must not exceed the highest ownership ratio stipulated in any applicable treaty for a specific sector or profession;
  • Where multiple foreign investors from the same country or territory contribute capital, purchase shares, or acquire capital contributions in an economic organization, the total ownership ratio of all such investors must not exceed the ownership ratio prescribed under the applicable international investment treaty;
  • For public companies, securities companies, fund management companies, securities investment funds, and securities investment companies governed by securities laws, where securities laws provide different regulations on foreign ownership ratios, such regulations shall prevail;
  • Where an economic organization operates in multiple business sectors subject to different foreign ownership limits under international investment treaties, the foreign ownership ratio in such organization must not exceed the lowest foreign ownership cap applicable to any restricted sector or profession.

IV. Legal consultancy services on investment regulations

The above information is provided by NPLaw to support clients in understanding investment regulations. Should you have any questions relating to the above matters or other legal issues, please contact NPLaw immediately for direct consultation and guidance.