Foreign Investment Licenses (FIL) in Vietnam

Foreign direct investment (FDI) in Vietnam is regulated by the Department of Planning and Investment (DPI) at the local level and the Ministry of Planning and Investment (MPI) at the central level, through related implementing regulations, decrees, and circulars.

Current FIL rules delegate more authority over investment licensing to provinces, municipalities, and investment zones than was the case in the past. However, larger investments (usually above $100 million), and those requiring complex licensing approval often require extensive consultations between the provincial DPI and MPI – a process that can take many months.

The Prime Minister’s office retains authority over larger projects and projects deemed sensitive. MPI remains the principal government agency acting as an advisor for the Prime Minister with regard to approving licenses.

Primary forms of direct investment include:

  • To establish economic organizations in the form of 100 percent capital of domestic investors or 100 percent capital of foreign investors.
  • To establish joint venture economic organizations between domestic and foreign investors.
  • Under (1) and (2) investors shall be permitted to make an investment to enable the establishment of the following economic organizations:
  • Enterprises organized and operating in accordance with the Law on Enterprises; credit institutions, insurance enterprises, investment funds and other financial organizations in accordance with various laws;
  • Medical service, educational, scientific, cultural, sports and other services;
  • Establishments which conduct investment activities for profit-making purposes;
  • Other economic organizations in accordance with law.
  • To invest in the contractual forms of Business Cooperation Contract (BCC); Build- Operate-Transfer (BOT); Build-Transfer-Operate (BTO); and BT (Build-Transfer).
  • To invest in business development. Investors shall be permitted to invest in business development through expanding scale, increasing output capacity and business capability, renovating technology, improving product quality, and reducing environmental pollution.
  • To purchase shares or to contribute capital in order to participate in management of investment activities. Investors shall be permitted to contribute capital to and to purchase shareholding in companies and branches operating in Vietnam. The ratio of capital contribution and purchase of shareholding by foreign investors in a number of sectors is regulated by the government.
  • To invest in the carrying out of a merger or acquisition of an enterprise. Investors shall be permitted to merge with and to acquire companies and branches. The conditions for the acquisition of companies and branches are largely regulated by the 2014 Investment Law and the Law on Competition, among others.

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