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%.
When companies think about data protection, they usually focus on “visible” data like names, email addresses, or bank details. However, there is a hidden layer called metadata - essentially “data about data” - that often gets ignored.
Under Vietnam’s new personal data protection rules, overlooking metadata is a major risk. If metadata can be used to identify a specific person, it falls under the same strict rules as regular personal data.
What is Metadata? The “Digital Footprint”
Metadata is information that describes the context of a file or a message rather than the content itself. Even if you remove a person’s name from a file, the metadata can still point directly to them.
Vietnam is currently at a pivotal stage of infrastructure modernization. To meet the immense demand for capital, the State has moved to revitalize private sector participation, most notably through the “Build – Transfer” (BT) model.
In a typical BT arrangement, a private investor finances and constructs an infrastructure project, then transfers it to the State upon completion. In return, the State “pays” the investor with land funds, allowing them to develop a “reciprocal project” (dự án đối ứng) to recover their capital and generate profit. While this mechanism is essential to stimulate private sector participation, the recent new legal framework for BT projects may raise significant concern regarding the land access privileges granted to BT investors compared to their counterparts in the general real estate market. In particular,
The recently issued Case Law No. 81/2024/AL (CL 81) introduces a precedent that allows creditors to bypass the standard statute of limitations by re-characterizing an unpaid contractual debt as a property reclamation claim upon the mutual termination of the contract and an agreement on the payable amount. Below are a few of our observations regarding CL 81.
Summary of the Case
The dispute originated from a service contract between Company M (the Service Provider) and Company A (the Client). After the Service Provider performed its services, the parties mutually agreed to terminate the contract. Subsequently, the Client explicitly confirmed in writing the specific amount of the service fee it owed to the Service Provider and the late payment interest but ultimately failed to make the payment. When the Service Provider filed a lawsuit to recover the unpaid amount, the Client requested the court to dismiss the case, arguing that the 3-year statute of limitations for a contractual dispute had already expired.
For investors in Vietnam, "contributing capital" to a company can mean two very different things: becoming a legal owner (member/shareholder of a company) or simply being a business partner. A recent case law no. 78/2025/AL clarifies this distinction and indicates that several pieces of evidence may be considered to prove company member/shareholder status.
Case Summary
In this dispute, Mr. H, the plaintiff, provided significant funds to D Limited Liability Company, which was managed by his relatives. Although Mr. H received the profit distribution for over a decade and signed minutes acknowledging his contribution, Mr. H was never officially recorded as a member of the company in the enterprise registration certificates (ERC) or the company’s charter.
When partnering with government agencies (G2B), the risks often come from policy changes and the adoption of new legislation, causing obstacles, delays, and payment backlogs in PPP contracts (especially BT contracts). Following the establishment of Steering Committee 751 (Ban Chỉ Đạo 751) to resolve investment projects with pending legal issues, the Government has recently prepared a Resolution Draft (the Draft) to address approximately 160 transitional BT projects still facing legal obstacles (such projects, “Pending BT Project”).
Focusing specifically on Pending BT Projects where land-use rights serve as the State’s payment mechanism, the following analysis highlights critical issues arising from the proposed changes introduced by this Draft: