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
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:
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:
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.