Circular 06/2019 / TT-NHNN of the State Bank of Vietnam dated June 26, 2019 guiding on foreign exchange management for foreign Direct Investment Activities in Vietnam, regulating a number of changes related to the opening and use of investment accounts of foreign investors, as follows:

DIRECT INVESTMENT foreign-owned enterprises have to open a DIRECT investment account 

According to this circular, DIRECT INVESTMENT foreign-owned enterprises DO NOT ONLY INCLUDE “enterprises established, managed and carry out investment activities in Vietnam, BUT ALSO INCLUDE THE FOLLOWING CASES:

a) Enterprises are set up under the investment form “establish an enterprise” and foreign investors being members or shareholders and must carry out procedures for granting Investment Registration Certificates according to regulations of Investment Law;

b) Enterprises not falling into the cases specified at point a have foreign investors owning 51% or more of their charter capital, including:
(i) Enterprises with foreign investors fund capital, buy shares, or stakes of the enterprises cause to the result that foreign investors owning 51% or more of their charter capital;
(ii) Enterprises established after splitting, merging or merging lead to foreign investors owning 51% or more of their charter capital;
(iii) Newly established enterprises in accordance with specialized laws;

Thus, enterprises under following cases:
– Enterprises with foreign investors owning less than 51% of the charter capital of the enterprise, except for enterprises established under investment form “establishing an enterprise”;
– Enterprises do not have to carry out procedures to issue investment registration certificates but the enterprises request and are granted Investment Registration Certificates by competent agencies;
– Foreign direct investment enterprises have stocks listed on the stock exchange or registered for trading on the Stock Exchange;

(1) close an INDIRECT investment account (if any) and
(2) open a DIRECT investment account to use, instead of using an INDIRECT investment account as before.
* Exception: If these enterprises are borrowing and repaying foreign loans through a direct investment account, they can continue to maintain this account to borrow and repay foreign loans.

INDIRECT foreign investment can open and use the INDIRECT investment account 

Also according to this regulation, the INDIRECT foreign investment activities in Vietnam of foreign investors only remain the following scope, and these investors are allowed to open and use the INDIRECT investment account:

a. Contributing capital, buying and selling shares, capital contribution of foreign investors into enterprises is not in the case of the above-mentioned direct investment scope, UNLISTED and not registered for trading on the Stock Exchange.
b. Contributing capital, buying, selling shares, contributed capital of foreign investors into enterprises with LISTED stocks or registered to trade on the Stock Exchange.
c. Buying and selling bonds and other securities on Vietnam stock market.
d. Buying and selling other valuable papers in Vietnam dong issued by residents who being licensed organizations in the Vietnamese territory.
e. Entrusting investment in Vietnam dong through fund management companies, securities companies and organizations authorized to conduct investment entrustment operations in accordance with the law on securities; entrusted investment in Vietnam dong via credit institutions and foreign bank branches are allowed to perform investment entrustment operations in accordance with the regulations of the State Bank.
f. Capital contribution and transfer of contributed capital of foreign investors in securities investment funds and fund management companies in accordance with the law on securities.
g. Other forms of indirect investment in accordance with the law.

Circular 06/2019 / TT-NHNN takes effect from September 6, 2019

Note: The content of advice and legal provisions referenced in the article is at the time of consulting and may no longer be effective at the time readers read this article. Therefore, for detailed advice and implementation support, please contact Law Plus via email or phone number +84 2862 779399.




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