Why FDI and ODI in Vietnam are Different
Foreign direct investment in Vietnam differs from most jurisdictions because inbound and outbound capital are governed by separate, active regulatory systems and a single cross-border transaction often touches both at once.
On the inbound side, foreign investment is governed by the Law on Investment 2025 and the Decree 96/2026/ND-CP which together establish the market access framework, investment approval requirements, and procedures for foreign investors. The Ministry of Finance (MOF) and the relevant investment-registration authorities handle the applicable licensing and filing steps under the new framework, while sector-specific approvals may still be required depending on the business line. Where a sector is conditional, foreign access typically requires compliance with foreign ownership caps, a joint venture with a Vietnamese partner, or specialized operational licenses from the competent authorities.
On the outbound side, Vietnam’s outward direct investment (ODI) follows a separate procedure under the Law on Investment 2025 and Decree 103/2026/ND-CP, with the applicable requirements depending on whether the project is sensitive, large-scale, or falls within a simplified category. For certain projects, the MOF handles the approval and registration steps, while foreign exchange processing is carried out through authorized banks in accordance with State Bank requirements. The recent framework also introduces a more risk-based approach to outward investment management for eligible projects.
Beyond the formal regime, execution risk is shaped by negotiation norms and enforcement reality. Commitments made verbally may not survive into final documents; interpretations can differ slightly between provincial authorities; and capital-control practices can tighten or loosen with the macro cycle in ways the written rule does not fully predict. Investing in or out of Vietnam successfully depends on reading both the rules and how they are currently applied.
FDI in Vietnam: Market Entry & Opportunities
To invest in Vietnam, a foreign company first confirms whether its intended business line is open under Vietnam’s market access framework, then selects an entry structure. The principal vehicles are a wholly foreign-owned enterprise, a joint venture with a Vietnamese partner, and the acquisition of shares in an existing Vietnamese company. A wholly foreign-owned enterprise gives the investor full control and is typically the default where the sector is open; the joint venture is used where foreign ownership is capped or where a local partner is strategically valuable.
Regional investment climate varies: Industrial Zones (IZ), Export Processing Zones (EPZ), and High-Tech Parks offer their own statutory tax incentives (under the Law on Corporate Income Tax) and streamlined administrative procedures managed directly by their local Management Boards.
The practical challenges of foreign market entry are well known — administrative processing times, the necessity of specialized sub-licenses (e.g., retail/trading licenses where applicable under Decree 09/2018/ND-CP), and IP protection. For most inbound cross-border investments, the entry decision is where the later operational and international business expansion constraints are effectively locked in, so it is worth resolving carefully before incorporation.
Due Diligence & Regulatory Assessment
Legal due diligence on a Vietnam investment is built around the risks specific to Vietnamese targets and the local regulatory environment, not a generic checklist. In practice, it runs as several parallel workstreams, each delivering findings that the investor can price into the deal.
- Legal and corporate review — We examine corporate history (especially the strict 90-day capital contribution rule under the Law on Enterprises), share transfers, related-party transactions, operational licenses, Land Use Right Certificates (LURCs), and litigation exposure. Corporate governance of the target is reviewed against the statutory standards of the Law on Enterprises.
- Financial and regulatory review — Financial due diligence proceeds on the working assumption that headline statements may be one of several versions; we reconcile invoiced revenue against tax filings, verify customs declarations, and identify off-balance-sheet exposure. Regulatory compliance checks cover enterprise registration, mandatory reporting on the National Foreign Investment Information System (NFIIS), and labor law compliance.
- Data and cybersecurity review — Where the target handles personal information, we assess compliance under Vietnam’s personal data protection framework and cybersecurity rules, including cross-border data transfer arrangements where applicable. This is especially relevant for tech, e-commerce, fintech, and data-driven businesses.
The recurring practical limitation is data reliability. Vietnamese private companies may keep inconsistent records across corporate, tax, and operational files, especially where compliance has been handled informally. This is why FDI investment due diligence in Vietnam relies on independent verification rather than the seller’s data room, and why each finding is delivered as a priced risk — a price adjustment, a condition to closing, or an indemnity — rather than a descriptive note.
ODI: Vietnamese Companies Investing Abroad
Vietnam outbound direct investment is governed by the Law on Investment 2025 and detailed by Decree 103/2026/ND-CP, which introduced a tiered, highly pragmatic system for capital outflow. Depending on the scale and nature of the project, the procedure may be simplified for smaller or non-sensitive investments, while larger or conditional projects remain subject to more formal approval and registration requirements.
Where registration is required, investors must complete the prescribed licensing steps and foreign exchange procedures before remitting capital overseas. The MOF and the authorized banking system play key roles in monitoring the flow of funds, including the use of the direct investment capital account where applicable. Decree 103/2026/ND-CP also supports more efficient processing for eligible projects through the National Investment Information System.
Capital controls remain an important practical factor. The timing and structure of funding should be planned carefully, because outbound capital must move through the proper legal and banking channels. Vietnamese investors commonly use overseas subsidiaries, joint ventures, or M&A structures, but the chosen structure must still fit the permitted ODI form and the laws of the destination market. Profits generated abroad should also be managed in line with Vietnam’s foreign exchange rules, tax requirements, and reporting obligations.
Investment Compliance & Risk Management
Investment compliance for a foreign-invested enterprise in Vietnam continues long after the capital lands. The ongoing obligations run across several tracks, each with its own authority and cycle.
- Ongoing FIE obligations — Mandatory periodic reporting through the relevant investment information system, tax compliance, annual audited financial statements, foreign exchange compliance, labor compliance, and alignment with any continuing market access or sector-specific conditions. Depending on the project, the investor may also need to maintain approvals related to land use, construction, environment, or technology transfer.
- Anti-corruption and AML — Foreign-invested operations are subject to Vietnam’s anti-corruption and anti-money laundering framework, and for multinational groups this often needs to be aligned with parent-company compliance standards as well. A single gifts, hospitality, and third-party intermediary policy should be drafted with both Vietnam law and group policies in mind.
- Tax and transfer pricing — Corporate income tax, value-added tax, personal income tax, and transfer pricing obligations must all be managed on their own cycles. Intercompany transactions between the foreign-invested company and its parent or affiliates must comply with Vietnam’s transfer pricing documentation and disclosure requirements where applicable.
Deal Structure & Execution
The investment vehicle determines what the investor can do after closing. The wholly foreign-owned enterprise is the most common FDI structure where the sector is open, giving full control and cleaner governance; the joint venture is used where foreign ownership is capped or where a local partner is strategically valuable; capital contribution or share acquisition is used to acquire an existing operating business with its licenses and history intact; and a holding structure may be used to centralize regional investments and manage tax and exit flexibility.
Contract negotiation in Vietnam carries its own dynamics. Business terms may be agreed early, but the binding structure must still be aligned with the regulatory filings, especially where investment registration, enterprise registration, or sector approvals are required. Legal documentation and the regulatory steps that follow have to be sequenced so that title, capital, and control move in the right order.
Timeline and closing coordination with the authorities is the practical work of execution: parallel filings on different clocks, converging on a closing where the investor’s money and control move together, with documentary evidence that holds up under later regulatory review.
Our Role as FDI and ODI Advisor in Vietnam
As a foreign direct investment law firm with a resident Vietnam practice, we advise on both directions of the flow at once. Our locally licensed lawyers in Ho Chi Minh City and Hanoi handle the local filings and regulator interactions; our European and broader Asian network, across Italy, China, India, and the UAE, handles the home-jurisdiction and destination-market questions that any cross-border investment sits on top of.
For inbound investors, we run market selection, structuring, and entity setup through to operational launch. For Vietnamese outbound investors, we coordinate the licensing process with the relevant authorities at home and the inbound screening and structuring in the destination market, so a single team holds both ends of the deal.
Our advisory is integrated by design: legal, tax, and corporate-structure capability under one engagement, so an investment-structure question never bounces between three providers before it gets answered. For most clients, this means being served — from the first market decision, through the regulatory process, to post-investment integration — by one firm, which delivers greater continuity and consistency end-to-end.
