Foreign Investors’ Capital Contribution and Share Acquisition in Conditional Sectors in Vietnam

Key information

Vietnam’s regulations on foreign investors’ capital contribution and share acquisition are primarily governed by the Law on Investment, Law on Enterprises, and specialized laws applicable to each conditional business line. Under Vietnamese law, “conditional business sectors” refer to industries where investment is subject to specific requirements due to national security, social order, public health, or other public-interest concerns.

1. Legal Basis and Market Access Conditions

Foreign investment in Vietnam’s conditional business sectors is regulated by the Law on Investment, Law on Enterprises, and relevant specialized laws. Conditional sectors impose restrictions to safeguard national security, public health, or social interests.
Key requirements may include:

• Foreign ownership caps in certain sectors (e.g., advertising, logistics, transportation, telecom).

• Joint venture requirements or restrictions based on Vietnam’s WTO commitments and international treaties.

• Specialised licenses that must be obtained before or after the transaction.

Before acquiring equity, foreign investors must satisfy the market access test, which evaluates whether the business line is subject to limitations or additional conditions.

2. Approval Process for Capital Contribution or Share Acquisition

Prior registration or approval must be assessed under current investment law. Relevant factors can include the target activities, foreign ownership changes and sensitive land-related circumstances; the transaction should not be assessed only against one ownership percentage.

The application typically includes investor documents, transaction agreements, and evidence of compliance with sector-specific conditions.
After receiving approval, the parties must update enterprise registration, complete capital transfer through the appropriate investment account, and fulfill reporting obligations.

3. Practical Considerations and Key Risks

Investing in conditional sectors involves heightened compliance requirements. Common risks include:

• Misinterpreting foreign ownership limits, which can invalidate the transaction.

• Unidentified sub-licenses or operational conditions, discovered only during due diligence.

• Potential review under competition or national security regulations, particularly in sensitive industries.

Foreign investors often adopt careful deal structuring - such as joint ventures or phased acquisitions - to navigate restrictions while ensuring regulatory compliance.

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