Investment Law 2014 – Some disappearing concepts

Some concepts which have existed for more than 20 years no longer exist under Investment Law 2014. These disappearing concepts include:

  • Indirect investment and direct investment: The concepts of direct or indirect investment are used to determine, among other things, whether an investment by a foreign investor (1) is subject to the Investment Law 2005 and needs an Investment Certificate or (2) is subject to Securities Law and does not need an Investment Certificate. Investment Law 2014 now clearly exclude all investments under the Securities Law. Therefore, there is no need for these concepts. That said, the concepts of indirect investment and direct investment still exist in foreign exchange regulations.
  • Joint venture and 100% foreign-invested economic organisation: The Investment Law 2014 also removes reference to joint venture and 100% foreign-invested economic organisation which are used in Investment Law 2005. The concepts of joint venture and 100% foreign-invested enterprises date back to the first foreign investment law of Vietnam in 1987. Now these concepts no longer exist. However, the lack of these concepts may make it more difficult to interpret or apply other laws which still use these concept (e.g. the WTO Commitments of Vietnam, Law on Land, Law on Advertising or Law on Cinemas).