Foreign investors are one of the key focuses of Vietnamese law, especially in investment and business activities. Therefore, not all industries or professions in Vietnam are open for foreign investors to invest or do business, and some are restricted in their access. ACCESS TO VIETNAM MARKET
With many years of experience in investment consulting both domestically and internationally, LawPlus would like to provide our customers with important information regarding the conditions for foreign investors to access the Vietnamese market. ACCESS TO VIETNAM MARKET
FOREIGN INVESTORS INVESTING IN VIETNAM
Table of Contents/Mục lục
1. What is a foreign investor?
According to Clause 19 Article 3 of the Law on Investment 2020, a foreign investor is a foreign individual or organization established under foreign law that carries out investment and business activities in Vietnam. Therefore, foreign investors can be foreign individuals or foreign organizations with investment projects or businesses in Vietnam.
2. Restricted industries and professions for foreign investors access to the market and conditional industries and professions for foreign investors
According to Article 15 of Decree 31/2021/NĐ-CP guiding the Law on Investment 2020, “Industries and professions that are restricted for foreign investors to access the market and restrictions on access to the market for these industries and professions are provided for in-laws, resolutions of the National Assembly, laws, resolutions of the Standing Committee of the National Assembly, decrees of the Government, and international treaties on investment.” Currently, the government has published a list of restricted industries and professions for foreign investors, including: [list of restricted industries and professions.
Group 1: Industries and professions that have not yet accessed the market;
Group 2: Industries and professions that have conditional access to the market.
2.1. Industries and professions that have not yet accessed the market
Industries and professions that have not yet accessed the market are understood as industries and professions that Vietnamese law and international investment agreements do not allow foreign investors to carry out investment and business activities; it have an impact on national defense and security; and state-exclusive industries and professions. According to Decree 31/2021/NĐ-CP, there are 25 industries and professions that have not yet accessed the market. Specifically:
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Business of goods and services that fall under the category of goods and services exclusively controlled by the state in the commercial sector.
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Press activities and news collection in all forms.
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Fishing or exploitation of marine resources.
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Investigation and security services.
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Judicial administrative services, including legal appraisal services, inheritance services, asset auction services, notary services, and services of a liquidator.
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Services for sending laborers to work abroad under contract.
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Investment in the construction of cemetery and burial infrastructure for transferring land use rights attached to the infrastructure.
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Direct waste collection services from households.
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Public opinion polling services (public opinion surveys).
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Demining services.
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Production and business of weapons, explosives, and support tools.
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Importation and dismantling of used ships.
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Public postal services.
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Business of transit goods.
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Temporary import and re-export business.
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Exercise the right to export, import, and distribute goods belonging to the list of goods of foreign investors, and economic organizations with foreign invested capital that are not allowed to exercise the right to export, import, and distribute.
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Acquisition, purchase, and handling of public assets in units of the armed forces.
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Production of military materials or equipment; the business of military uniforms, military supplies for the armed forces, military weapons, technical and specialized equipment, military and police vehicles, components, parts, supplies, and special equipment, and specialized manufacturing technologies for them.
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Business of industrial property representation and intellectual property appraisal services.
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Services for establishing, operating, maintaining, and repairing maritime signals, water areas, public shipping lanes, and shipping routes; surveying water areas, public shipping lanes, and shipping routes to publish maritime notices; surveying, building, and publishing marine charts of water areas, ports, shipping lanes, and shipping routes; construction and publication of maritime safety documents and publications.
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Services for regulating and ensuring maritime safety in water areas, public shipping lanes, and shipping routes; electronic maritime information services.
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Providing inspection (testing, trial) services and issuing certificates for vehicles (including systems, components, equipment, and parts of the vehicles); inspection and certification services for technical safety and environmental protection of specialized vehicles, containers, and dangerous goods packaging used in transportation; inspection and certification services for technical safety and environmental protection of oil and gas exploration, exploitation, and vehicles and equipment at sea; technical inspection services for occupational safety of machines and equipment with strict occupational safety requirements installed on vehicles and vehicles and equipment for oil and gas exploration, exploitation, and transportation at sea; and registration inspection services for fishing vessels.
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Investigation, evaluation, and exploitation services for natural forests (including timber harvesting and hunting, trapping of rare and endangered wildlife, and management of genetic resources for agriculture, livestock, and microorganisms).
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Research or use of new animal breeding genetic resources before being appraised and evaluated by the Ministry of Agriculture and Rural Development.
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Providing domestic tourism services, excluding international tourism services that serve international tourists traveling to Vietnam.
2.2. Conditionally Accessible Professions
Unlike professions that are not accessible, conditionally accessible professions allow foreign investors to invest and conduct business, but they must meet all the specific conditions set for each profession. Based on Appendix I of Decree No. 31/2021/ND-CP, the list of conditionally accessible professions for foreign investors includes:
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Production and distribution of cultural products, including recordings.
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Production, distribution, and screening of television programs and works of music, dance, theater, and film.
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Broadcasting and television services.
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Insurance; banking; securities business and other services related to insurance, banking, and securities business.
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Postal and telecommunications services.
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Advertising services.
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Printing services, publishing product distribution services.
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Surveying and mapping services.
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Aerial photography services.
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Education services.
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Surveying, exploiting and processing natural resources, minerals, oil, and gas.
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Hydroelectricity, offshore wind power, and nuclear energy.
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Freight and passenger transport by rail, air, road, river, sea, and pipeline.
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Aquaculture
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Forestry and hunting.
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Betting and casino businesses.
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Security services.
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Construction, operation, and management of river ports, seaports, and airports.
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Real estate business.
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Legal services.
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Veterinary services.
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Trading activities of goods and activities directly related to the purchase and sale of goods of foreign service providers in Vietnam.
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Technical inspection and analysis services.
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Tourism services.
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Health and social services.
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Sports and entertainment services.
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Paper production.
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Production of vehicles with more than 29 seats.
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Development and operation of traditional markets.
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Activities of the Commodity Exchange.
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Collection services for retail goods in the domestic market.
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Audit, accounting, accounting bookkeeping, and tax services.
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Valuation services; consulting to determine the value of enterprises for equitization.
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Services related to agriculture, forestry, and fisheries.
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Production and manufacture of aircraft.
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Production and manufacture of locomotives and railway cars.
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Business, production, and equipment related to tobacco.
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Activities of publishing houses.
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Shipbuilding, repair, and maintenance services.
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Collection services for hazardous waste.
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Commercial arbitration services, arbitration conciliation services.
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Logistics services.
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Coastal shipping.
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Cultivation, production, or processing of rare crops, breeding of rare wild animals, and processing of these animals or crops, including live animals and products derived from them.
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Production of construction materials.
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Construction and related technical services.
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Assembly of motorbikes.
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Services related to sports, arts, performing arts, fashion shows, beauty pageants and models, and other entertainment activities.
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Air cargo support services; ground handling services at airports and seaports; in-flight catering services; air traffic monitoring and meteorological services.
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Ship agency services; ship towing services.
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Services related to cultural heritage, author’s rights and related rights, photography, filming, recording, art exhibitions, festivals, libraries, museums.
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Services related to promotion and advertising of tourism.
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Agent, recruitment and scheduling services, management for artists, athletes.
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Services related to family.
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E-commerce activities.
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Cemetery business, cemetery and funeral services.
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Seeding and spraying of chemicals by airplane.
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Sea burial services.
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Sectors and professions invested under the pilot mechanism of the National Assembly, the Standing Committee of the National Assembly, the Government, and the Prime Minister.
3. Market access conditions for foreign investors
Based on Article 3, Section 10 of Law on Investment 2020, market access conditions for foreign investors are the requirements that foreign investors must meet to invest in industries and occupations listed in the Restricted Market Access List for Foreign Investors as stipulated in Article 9, Section 2 of the 2020 Investment Law. The market access conditions for foreign investors listed in the Restricted Market Access List include:
- The percentage of foreign investor’s charter capital ownership in the economic organization;
- Forms of investment;
- Investment activities scope; ACCESS TO VIETNAM MARKET
- Investor’s capacity and partners participating in investment activities;
- Other conditions as stipulated by laws, resolutions of the National Assembly, ordinances, resolutions of the National Assembly’s Standing Committee, decrees of the Government, and international treaties to which the Socialist Republic of Vietnam is a member.
In addition, according to Article 3 of Decree 31/2021/ND-CP, foreign investors and foreign-invested economic organizations, when conducting business investment activities in Vietnam, must meet the following conditions (if any): ACCESS TO VIETNAM MARKET
- Use of land, labor, natural resources, and minerals;
- Production and supply of goods, public services, or goods and services subject to state monopoly;
- Ownership and business of houses, real estate;
- Application of support forms and subsidies by the state for some industries, sectors, or for the development of regions or territories;
- Participation in state-owned enterprise equitization programs;
- Other conditions as stipulated in laws, resolutions of the National Assembly, ordinances, resolutions of the National Assembly’s Standing Committee, decrees of the Government, and international treaties on investment that prohibit or restrict access to foreign-invested economic organizations.
ACCESS TO VIETNAM MARKET
Depending on the nature of the industry or profession, Vietnamese law regulates which ones are subject to restrictions on market access for foreign investors. Therefore, foreign investors need to choose to invest and do business in industries and professions that are permitted by Vietnamese law and must demonstrate compliance with the conditions set for special industries. These are important pieces of information related to market access conditions for foreign investors in Vietnam provided by LawPlus. To better understand this issue, you can contact LawPlus at hotline 02862 779 399, 03939 30522, or email info@lawplus.vn for advice and answers to your questions.
