MPI’s views on foreign investment in certain service sectors

From time to time, the Ministry of Planning and Investment (MPI) comments on applications by foreign investors who want to invest in service sectors in Vietnam. It is interesting to know the MPI’s views on these applications as the MPI can take the same view when it comes to the same application in the future. Below is a summary of the MPI’s views from various official correspondences issued by the MPI in November and December 2012:

  • “Services for construction of high-rise buildings (CPC 512) and for construction of civil construction works (CPC 513)” are permitted under the WTO Commitment;
  • A foreign invested company may only register for “maintenance and repair services” as an after-sale service for the goods that the company sells to its customers. This is because the WTO Commitments only cover maintenance and repair services for personal and household goods (CPC 663);
  •  “Freight transport agency service (including freight transportation brokerage services mainly making arrangements for transport or making schedules for transport on behalf of carrier or recipients), brokerage services for loading goods on to aircrafts, goods collection services, bulk goods transportation services; other supporting services for freight transportations; warehousing services; and road transportation services” are permitted in case the foreign investor only owns 51% of the charter capital of the project company;
  • “Management consulting services and market research services” are permitted; and
  • Foreign investment in “human resources consulting services” is not permitted but foreign investment in “human resources management consulting services” is permitted.
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Vietnam investment regulations – Direct investment v.s. indirect investment

Under the Investment Law, direct investment means a form of investment whereby the investor invests its invested capital and participates in the management of the investment activity. On the other hand, indirect investment means a form of investment through the purchase of shares, share certificates, other valuable papers or a securities investment fund and through other intermediary financial institutions and whereby the investor does not participate directly in the management of the investment activity.

The confusing point here is what “participating in the management” of investment activity. If having purchased shares of a listed company in Vietnam, a foreign investor attends the shareholders meeting of such company and exercises its voting rights then arguably the investor has “participated in the management” of the company in Vietnam. A more relevant example is a foreign investor purchases a minority stake in a domestic joint stock company and nominates its personnel to hold position in the Board of Directors of such company. In such case, it is not clear if the investor could be deemed to have “participated in the management” of the company in Vietnam.

The consequences of being treated as a direct investment and an indirect investment may be material. If an investment is an indirect investment then the parties may not need to obtain an Investment Certificate and must settle the transaction in Vietnamese Dong through a VND capital contribution account.  If an investment is a direct investment then the parties may need to obtain an Investment Certificate and could settle the transaction in foreign currency.

It would have been clearer if the Investment Law replaces the concept of “participating in the management” with “control”. In such case, an investor will be deemed to make a direct investment if it has “control” of the investment activity. In other cases, the investor will be deemed to make an indirect investment. 

Vietnam Business Law Blog
New Foreign Exchange Rules for Foreign Investment in Vietnam

The State Bank of Vietnam (SBV) officially issued Circular 38/2026/TT-NHNN dated 31 July 2026 on foreign exchange management for foreign investment activities in Vietnam (Circular 38/2026). Effective from 18 August 2026, Circular 38/2026 replaces Circular 06/2019/TT-NHNN (Circular 06/2019) as amended by Circular 03/2025/TT-NHNN (Circular 03/2025), which has governed the direct investment capital account (DICA) regime since 2019. Circular 38/2026 also terminates Articles 11.3 and 11.4 of Circular 03/2025 on opening and use of VND-denominated accounts for conducting foreign indirect investment in Vietnam and amends Circular 16/2014/TT-NHNN on the use of foreign currency and Vietnamese dong accounts of residents and non-residents.

When Does CIT Arise on a Foreign Seller’s Share Transfer — At Signing or at Closing?

A typical share sale agreement (SPA) takes effect on signing. Closing, when the buyer and the seller exchange money and title to the shares, usually comes later, once conditions have been met. One might expect tax on the sale to be imposed when the shares are sold, that is, at closing. But where a foreign enterprise with no permanent establishment (Foreign Seller) in Vietnam sells shares in an unlisted Vietnamese company to a resident buyer, Article 5.2(a) of Circular 20/2026 provides that revenue is taxed when the initial capital-transfer contract takes effect. On the face of that Article, the SPA can be that contract, and signing can be when it takes effect. The fact that closing has not yet occurred might not, by itself, defer the tax. Until Circular 20/2026, that was not so.

Whether a JSC may issue new voting preference shares to founding shareholders after ERC issuance?

Similar to the Enterprise Law 2005 and the Enterprise Law 2014, the Enterprise Law 2020 is silent on whether founding shareholders may hold voting preference shares newly issued after the issuance date of the enterprise registration certificate (ERC), and only provides at Article 116.1 that the voting preference of founding shareholders is effective for three years from that date. This blog will examine different views on this issue.

On the one hand, one may support the view that founding shareholders are entitled to hold voting preference shares issued after ERC issuance date because:

Major Reductions in Fire Safety and Environmental Administrative Procedures in Vietnam

Based on Resolution No. 206/2025/QH15 of the National Assembly on special mechanisms to address difficulties and obstacles arising from legal regulations, the Government has issued several Resolutions on administrative procedure reduction (such as Resolution 66.16/2026/NQ-CP, Resolution 66.18/2026/NQ-CP, etc.). Most of these provisions remain effective until 28 February 2027. If new provisions covering the same subject matter are promulgated to replace them during this period, the relevant provisions of these Resolutions will automatically cease to be effective.

Key Concerns In Draft Cyber & PDP Sanctions Decree On Personal Data Protection

On 16 March 2026, the Ministry of Public Security (MPS) issued the draft decree on administrative sanctions in the fields of cybersecurity and personal data protection (the Draft Decree) for public consultation. It is the first step to put concrete penalties behind the PDPL 2025, which took effect on 1 January 2026 but left the enforcement details to the Government. The Draft covers a wide range of sectors, such as cybersecurity, personal data, AI, telecommunications, and digital signatures. This post focuses on the personal data provisions (Articles 57 to 69 of the Draft Decree), which raise potential concerns for businesses.

New Decree on private bonds (Part 2)

On 5 June 2026, the Government issued Decree 200 on private placement and trading of corporate bonds on domestic market and offering of corporate bonds on international market (Decree 200/2026). Decree 200/2026 will replace Decree 153/2020 (as amended) on the same subject. We have discussed certain contents of Decree 200/2026 in New Decree on private bonds (Part 1) — Vietnam Business Law.

New Changes to Administrative Sanctions for Merger Control Violations

The Government officially issued Decree 102/2026/NĐ-CP (Decree 102/2026), which introduces critical amendments and supplements to Decree 75/2019/NĐ-CP (Decree 75/2019) regarding administrative penalties for violations in the competition sector. Effective from 20 May 2026, Decree 102/2026 provides clearer enforcement guidelines and adjusts penalty frameworks, particularly for economic concentrations.

Below is a summary of the key changes introduced by Decree 102 that will directly affect M&A transactions subject to merger control (economic concentration notification) requirements in Vietnam.

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Vietnam investment regulations – Definition of “Foreign investors”

There are more than one definition of foreign investors (nhà đầu tư nước ngoài) under Vietnamese law:

  • Foreign investors are defined under the Investment Law to mean … “foreign organization or individual using capital in order to carry out an investment activity in Vietnam”. The definition under the Investment Law seems to suggest that only companies incorporated outside Vietnam can be regarded as foreign investors.
  • However, in subsequent decisions of the Prime Minister (Decision 88/2009 and Decision 55/2009), foreign investors also include enterprises established in Vietnam with more than 49% of capital contributed by “foreign parties” (bên nước ngoài). It is not clear if the term “foreign parties” are the same as “foreign investors” in the Prime Minister’s decision.
  • The Ministry of Finance on the other hand consider foreign investors to include “enterprises established in Vietnam with 100% foreign contributed capital”.
  • The latest document (Decree 102/2001) does not provide a definition of foreign investors but provides that companies incorporated in Vietnam of which foreign investors own more than 49% will be subject to the same investment and business conditions as those  applicable to foreign investors.

In summary, there are overlapping and confusing definitions of “foreign investors” under Vietnamese law. However, it is reasonable to conclude that such term will cover, among others, companies incorporated outside of Vietnam and companies incorporated in Vietnam of which foreign investors own more than 49%. 

Vietnam Business Law Blog
New Foreign Exchange Rules for Foreign Investment in Vietnam

The State Bank of Vietnam (SBV) officially issued Circular 38/2026/TT-NHNN dated 31 July 2026 on foreign exchange management for foreign investment activities in Vietnam (Circular 38/2026). Effective from 18 August 2026, Circular 38/2026 replaces Circular 06/2019/TT-NHNN (Circular 06/2019) as amended by Circular 03/2025/TT-NHNN (Circular 03/2025), which has governed the direct investment capital account (DICA) regime since 2019. Circular 38/2026 also terminates Articles 11.3 and 11.4 of Circular 03/2025 on opening and use of VND-denominated accounts for conducting foreign indirect investment in Vietnam and amends Circular 16/2014/TT-NHNN on the use of foreign currency and Vietnamese dong accounts of residents and non-residents.

When Does CIT Arise on a Foreign Seller’s Share Transfer — At Signing or at Closing?

A typical share sale agreement (SPA) takes effect on signing. Closing, when the buyer and the seller exchange money and title to the shares, usually comes later, once conditions have been met. One might expect tax on the sale to be imposed when the shares are sold, that is, at closing. But where a foreign enterprise with no permanent establishment (Foreign Seller) in Vietnam sells shares in an unlisted Vietnamese company to a resident buyer, Article 5.2(a) of Circular 20/2026 provides that revenue is taxed when the initial capital-transfer contract takes effect. On the face of that Article, the SPA can be that contract, and signing can be when it takes effect. The fact that closing has not yet occurred might not, by itself, defer the tax. Until Circular 20/2026, that was not so.

Whether a JSC may issue new voting preference shares to founding shareholders after ERC issuance?

Similar to the Enterprise Law 2005 and the Enterprise Law 2014, the Enterprise Law 2020 is silent on whether founding shareholders may hold voting preference shares newly issued after the issuance date of the enterprise registration certificate (ERC), and only provides at Article 116.1 that the voting preference of founding shareholders is effective for three years from that date. This blog will examine different views on this issue.

On the one hand, one may support the view that founding shareholders are entitled to hold voting preference shares issued after ERC issuance date because:

Major Reductions in Fire Safety and Environmental Administrative Procedures in Vietnam

Based on Resolution No. 206/2025/QH15 of the National Assembly on special mechanisms to address difficulties and obstacles arising from legal regulations, the Government has issued several Resolutions on administrative procedure reduction (such as Resolution 66.16/2026/NQ-CP, Resolution 66.18/2026/NQ-CP, etc.). Most of these provisions remain effective until 28 February 2027. If new provisions covering the same subject matter are promulgated to replace them during this period, the relevant provisions of these Resolutions will automatically cease to be effective.

Key Concerns In Draft Cyber & PDP Sanctions Decree On Personal Data Protection

On 16 March 2026, the Ministry of Public Security (MPS) issued the draft decree on administrative sanctions in the fields of cybersecurity and personal data protection (the Draft Decree) for public consultation. It is the first step to put concrete penalties behind the PDPL 2025, which took effect on 1 January 2026 but left the enforcement details to the Government. The Draft covers a wide range of sectors, such as cybersecurity, personal data, AI, telecommunications, and digital signatures. This post focuses on the personal data provisions (Articles 57 to 69 of the Draft Decree), which raise potential concerns for businesses.

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Written by Nguyen Quang Vu On In ,

Vietnam investment regulations – Definition of “Investment project”

Under the Investment Law, an investment project means “…a collection of proposals for the expenditure of medium and long-term capital in order to carry out an investment activity in a specific geographical area and for a specified duration …”

There are various uncertainties from the definition of an “investment project”:

  • By using the word “proposal”, the law seems to suggest that an investment project is a plan not a physical thing. However, the definition does not make clear to whom and by whom the proposal should be made and how the proposal will be implemented or adjusted.
  • When the law refers to “transfer of an investment project” then it is not clear whether this means the transfer of the proposal or transfer of the underlying assets of such projects or transfer of the capital in the project company.  
  • It is not clear if a reference to “project location” at law is a reference to the geographical area in the definition of investment project or a reference to the head-quarter of the project company.
  • It is not clear if a reference to “foreign-invested project” a reference to an investment project of which the project company is owned by a foreign investor or to an investment project which is financed by foreign capital including funds from a foreign lenders.
  • The term “capital” could broadly include loan capital or equity capital. However, if the term capital includes “loan capital” then this would require all loan transactions to be subject to investment procedures under Vietnamese law.
  • There is no clear distinction between the implementation of an investment project and the activity of the project company. This often results in action by a project company to be subject to both provisions of the Enterprise Law regulating the activities of a company and the provisions of the Investment Law regulating the implementation of an investment project.
  • In an M&A transaction when an investor acquires shares in a project company from an existing investor then it is not clear whether the share purchase activity by the purchasing investor or the activities of the project company is considered an investment project.  

In short, the concept of investment project under Vietnamese law is far from clear. This results in unclear and overlapping procedures between the Investment Law and other laws. It would be better and clearer for potential investors if this concept is replaced with a more specific definition (e.g. concession or development rights). 

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Written by Nguyen Quang Vu On In ,