This article reflects Vietnamese law in force as of September 2026.

Key Takeaways (30-Second Summary)

  • A new Investment Law is in force: Law on Investment No. 143/2025/QH15 took effect on 1 March 2026 and largely repealed the 2020 law. Company formation and governance remain under the Law on Enterprises No. 59/2020/QH14, as amended by Law No. 76/2025/QH15.
  • Five forms of investment (Article 18): establishing a new company; acquiring shares or equity in an existing enterprise; implementing an investment project; a Business Cooperation Contract (BCC); and new forms prescribed by the Government.
  • 100% foreign ownership is permitted in businesses outside the restricted market-access list — the old classification limited to "joint venture or wholly foreign-owned enterprise" no longer reflects current law.
  • A BCC lets you invest without setting up a company, but a BCC involving a foreign investor requires an Investment Registration Certificate (IRC).
  • M&A registration thresholds: a share acquisition must be registered before closing where foreign ownership rises above 50%, increases in a conditional sector, or the target holds land in a border, coastal, island or national-security-sensitive area.
  • No general 30% minimum capital rule: the former requirement that foreign investors contribute at least 30% of project value no longer exists. Capital must flow through a Direct Investment Capital Account (DICA).

1. Which Laws Govern Foreign Investment in Vietnam in 2026?

Vietnam permits foreign investors to invest through various forms, including establishing a new company, entering into a joint venture with Vietnamese investors, acquiring shares in an existing enterprise, entering into a business cooperation contract, and participating in public-sector projects. Nevertheless, investors must examine market-access restrictions, shareholding ratios, business licenses, and the specific conditions applicable to each business before investing.

The principal law currently in force is the Law on Investment No. 143/2025/QH15, which took effect on 1 March 2026 and largely repealed the Law on Investment 2020. The establishment and administration of companies are governed by the Law on Enterprises No. 59/2020/QH14, as amended by Law No. 76/2025/QH15.

2. The Five Forms of Investment under Article 18

Article 18 of the Law on Investment 2025 prescribes the principal forms of investment as follows:

  • Establishment of an economic organization or a new company
  • Purchase of shares, acquisition of transferred shares, or acquisition of an equity interest in an existing enterprise
  • Implementation of an investment project
  • Investment under a Business Cooperation Contract (BCC)
  • New forms of investment or economic organizations as prescribed by the Government

Therefore, the former classification limited to a "joint venture" and a "wholly foreign-owned enterprise" does not fully encompass the forms recognized under current law.

Legal source: Law on Investment No. 143/2025/QH15, Articles 18–22.

3. Business Cooperation Contract (BCC): Investing Without Establishing a Company

A BCC is a contract between two or more investors to conduct business activities and share benefits without being required to establish a new company. The parties may determine the scope of work, investment capital, allocation of revenue or profits, responsibility for expenses, project management, and termination of the contract with considerable flexibility.

Pursuant to Article 22 of the Law on Investment 2025:

  • A BCC between Vietnamese investors is governed by civil law and other relevant laws.
  • A BCC between a Vietnamese investor and a foreign investor, or between foreign investors, requires an Investment Registration Certificate (IRC).
  • The parties must establish a coordination committee, whose powers and duties shall be as prescribed in the contract.
  • The parties may use assets arising from the cooperation to establish a company at a later stage.
  • A foreign investor participating in a BCC may establish an operating office, open bank accounts, use a seal, employ workers, and execute contracts within the scope authorized by the Government.

The advantage of a BCC is its flexibility and the absence of a requirement to establish a new company. Its disadvantage is that there is no separate legal entity to assume liabilities. The parties must therefore specify in detail their liabilities, accounting controls, taxation, intellectual property, and the procedures for handling disputes.

4. Establishing a New Company in Vietnam

Foreign investors may establish an economic organization in Vietnam. Commonly used forms include:

  • Single-member limited liability company
  • Limited liability company with two or more members
  • Joint-stock company
  • Partnership in a business permitted by law

Such a company may be wholly owned by foreign investors or jointly owned by foreign and Vietnamese investors.

The establishment of a company requires consideration of both the shareholding ratio and the business activities. If the business is not included in the list of restricted market-access sectors, foreign investors will, in principle, receive the same treatment as Vietnamese investors. If the business is conditional, requirements may apply to the shareholding ratio, type of legal entity, business scope, investor qualifications, or the participation of a Vietnamese partner.

A significant procedural change: Article 19 of the 2025 Law permits a foreign investor to establish an economic organization to implement a project before completing the procedure to apply for or amend an IRC. During the establishment process, the investor must still comply with the applicable market-access conditions, and a project subject to such requirements must still obtain an IRC or the relevant approval before actual operations commence.

4.1 Wholly Foreign-Owned Enterprise (100% Foreign Ownership)

A wholly foreign-owned company is not a special type of legal entity. It is a company established under Vietnamese law in which all shares or equity interests are held by foreign investors.

The company has a legal personality separate from its shareholders. Shareholders’ liability is generally limited to the capital they have agreed to contribute, and the investors have authority to control the business in accordance with the corporate structure and articles of association. Nevertheless, 100% foreign ownership is permitted only in businesses allowed by Vietnamese law and Vietnam’s international commitments.

4.2 Joint Ventures: The Old Rules No Longer Apply

A joint venture (JV) is no longer a form of investment governed by a special administrative regime as it was under the former law. It generally refers to a Vietnamese company whose shareholders include both foreign and Vietnamese investors, administered according to its type of legal entity, articles of association, and shareholders’ agreement. There is no general rule requiring that:

  • A foreign investor must hold at least 30% of the shares.
  • The board must include at least two Vietnamese representatives.
  • The director or deputy director must be Vietnamese.
  • All decisions must be approved unanimously.

These requirements derive from the former foreign-investment legal regime and should not be cited in relation to companies established under current law.

Nevertheless, in practice, a joint venture agreement and shareholders’ agreement should clearly prescribe important matters such as capital increases, issuance of new shares, appointment of directors, signing authority, loan financing, dividend payments, share transfers, competition with the company, and deadlock-resolution mechanisms.

Legal sources: Law on Enterprises No. 59/2020/QH14 and Law No. 76/2025/QH15.

5. M&A in Vietnam: Acquiring Shares in an Existing Company

A foreign investor may invest by:

  • Purchasing newly issued shares
  • Purchasing shares from existing shareholders
  • Acquiring an equity interest in a limited liability company
  • Accepting a transfer of an equity interest from an existing member
  • Merging with or acquiring an enterprise, or acquiring an investment project

Under Article 21 of the Law on Investment 2025, the investment must not contravene market-access conditions, land law, or national security and defense requirements.

An investor must register the transaction before changing the shareholders in significant circumstances, such as:

  • The acquisition increases the foreign shareholding ratio in a business subject to conditions applicable to foreign investors.
  • The acquisition increases the foreign shareholding ratio from 50% or less to more than 50%.
  • Foreign investors already hold more than 50% of the target company, and the transaction further increases the foreign shareholding ratio.
  • The target company has land-use rights on an island, in a border area, in a coastal area, or in an area that may affect national security.

This method may be faster than commencing a new project, but a share purchaser assumes both the existing assets and the existing risks of the company. The purchaser should therefore conduct due diligence on tax, land, licenses, labor, environmental matters, contracts, and litigation before acquiring the shares.

6. Public–Private Partnership (PPP) Projects

Infrastructure or public-service projects may be undertaken in the form of a Public–Private Partnership (PPP) under the Law on Public–Private Partnership Investment No. 64/2020/QH14, as amended, including by Law No. 90/2025/QH15.

Contractual forms may include BOT, BTO, BOO, O&M, BTL, BLT, or a combined form as prescribed by law. An investor must undergo the selection process and establish a PPP project company unless an exemption applies.

The former information referring to a BT arrangement, under which the State granted another project to the investor as consideration, should not be used to describe a generally available form, because PPP structures and the use of State assets are now subject to stricter specific laws and procedures.

Legal sources: Law on PPP Investment No. 64/2020/QH14 and Law No. 90/2025/QH15.

7. Representative Offices and Branches: What They Can and Cannot Do

A foreign company may establish a representative office in Vietnam to coordinate activities, conduct market research, promote trade, and monitor the parent company’s operations. However, a representative office is generally not entitled to sell goods, issue tax invoices, or directly receive income from business operations.

The establishment of a branch is permitted only for certain businesses and must comply with international commitments and specific laws, such as those applicable to banking, insurance, securities, legal services, and certain professional services. Therefore, a representative office or branch cannot replace a subsidiary company in every business sector.

8. Which Business Sectors Are Restricted for Foreign Investors?

The current system does not require every telecommunications, media, transportation, tourism, or consulting business to invest only through a BCC or JV, as stated in former information. Instead, it applies the List of Sectors Restricted from Market Access for Foreign Investors.

Under Article 8 of the Law on Investment 2025, the List is divided into:

  • Sectors in which foreign investors are not yet permitted market access
  • Sectors in which foreign investors are permitted market access subject to conditions

The conditions may relate to the foreign shareholding ratio, the form of investment, the scope of services or area of operation, investor capability and experience, the participation of a Vietnamese partner, or conditions under specific laws or international agreements.

Businesses that commonly require further examination include media and broadcasting, telecommunications, transportation, logistics, retail, advertising, education, tourism, banking, insurance, securities, real estate, and businesses related to natural resources.

Lists of conditional businesses from former information should not be applied directly. Each activity must be examined individually under the specific laws, the List of Sectors Restricted from Market Access, and Vietnam’s commitments under the WTO or the relevant free trade agreements.

9. Investment Capital Rules: The 30% Myth and the DICA Account

The former explanation that "Registered Capital" means the total value of the project and that "Legal Capital" must be at least 30% of the project value is inconsistent with the current legal framework. The following terms should be distinguished:

  • Total investment capital: the total capital used for the project, including the investor’s capital and funds raised from other sources.
  • Contributed capital or charter capital: money or assets that shareholders agree to contribute to the company.
  • Legal capital or minimum capital: the minimum capital prescribed by specific laws only for certain businesses.

At present, there is no general rule requiring foreign investors to contribute at least 30% of the total investment capital, nor is there a general rule limiting a company’s long-term borrowings to no more than 70% of the project value. Nevertheless, the proportion of investors’ capital may be imposed as a specific condition for certain projects, such as land, real estate, or PPP projects, or businesses governed by specific laws.

Capital from abroad must be remitted through an appropriate account in accordance with foreign-exchange-control laws. A company classified as a foreign direct investment enterprise may be required to open a Direct Investment Capital Account (DICA), separate from the account used for receipts and payments in ordinary business operations. Payment for shares, share transfers, capital reductions, and the repatriation of investment capital or profits must be conducted through the channels prescribed by law.

10. Investment Incentives under Articles 14–17

Articles 14–17 of the Law on Investment 2025 provide that incentives may take the following forms:

  • A corporate income tax rate lower than the general rate
  • Corporate income tax exemption or reduction
  • Import-duty exemption for machinery or goods used to create fixed assets
  • Exemption from or reduction of land-use fees or land rent
  • Accelerated depreciation and an increase in tax-deductible expenses
  • Support for infrastructure, personnel, technology, research, green transition, and digital transformation

Eligibility for incentives does not depend solely on foreign-investor status, but is determined by the type of business, location, project size, employment, technology, and conditions relating to the disbursement of investment capital.

A project must maintain its qualifications throughout the period in which the incentives are claimed. If the project cannot be implemented or the capital cannot be disbursed in accordance with the applicable conditions, the incentives may be withdrawn, and taxes may be assessed retroactively.

Frequently Asked Questions (FAQ)

Can a foreign investor own 100% of a company in Vietnam?

Yes, in most sectors. A company established under Vietnamese law may be wholly owned by foreign investors, provided the business is not on the List of Sectors Restricted from Market Access and complies with Vietnam’s international commitments. If the sector is conditional, requirements may apply to the shareholding ratio, the form of investment, or the participation of a Vietnamese partner. The old rule of thumb that foreign investors must choose between a joint venture and a special "WFOE" regime no longer reflects the law in force since 1 March 2026.

What is a BCC, and do I need an Investment Registration Certificate for it?

A Business Cooperation Contract (BCC) is a contract between two or more investors to conduct business and share profits without establishing a new company. Under Article 22 of the Law on Investment 2025, a BCC between a Vietnamese investor and a foreign investor, or between foreign investors, requires an Investment Registration Certificate (IRC). The trade-off: a BCC is flexible and quick, but there is no separate legal entity to absorb liabilities, so the contract must allocate responsibilities, accounting, tax, and dispute resolution in detail.

When must a foreign share acquisition be registered with Vietnamese authorities?

Registration before closing is required in significant cases: where the acquisition increases foreign ownership in a conditional sector; where foreign ownership rises from 50% or below to more than 50%; where foreign investors already hold more than 50% and increase their ratio further; or where the target company holds land-use rights on an island or in a border, coastal, or national-security-sensitive area. Buyers should also complete tax, land, license, labor, environmental, contract, and litigation due diligence before closing.

Is there a minimum capital requirement for foreign investors in Vietnam?

There is no general minimum. The former rule that foreign investors must contribute at least 30% of the total project value no longer exists, and there is no general 70% cap on long-term borrowings. Minimum capital applies only where a specific law prescribes it for particular businesses (for example, real estate or certain licensed sectors), and capital ratios may be imposed as project-specific conditions. Foreign capital must be remitted through the prescribed channels, typically a Direct Investment Capital Account (DICA).

Can a representative office sell goods or earn income in Vietnam?

Generally no. A representative office may coordinate activities, conduct market research, promote trade, and monitor the parent company’s operations, but it may not sell goods, issue tax invoices, or directly receive business income. A branch is available only in certain sectors (such as banking, insurance, securities, and legal services) under specific laws and international commitments. For most trading or service businesses, a subsidiary company remains the operating vehicle.

What investment incentives can foreign investors receive in Vietnam?

Under Articles 14–17 of the Law on Investment 2025, incentives include reduced corporate income tax rates, tax exemptions or reductions, import-duty exemption for fixed-asset machinery, land-rent reductions, accelerated depreciation, increased deductible expenses, and State support for infrastructure, personnel, technology, and green or digital transformation. Eligibility depends on the sector, location, project size, employment, and capital-disbursement conditions — and the project must maintain its qualifications, or incentives may be clawed back with retroactive tax assessment.

How Louis Group Can Help

Louis Group maintains offices in Bangkok, Hanoi, Ho Chi Minh City, Taipei, Hsinchu, and Taichung, with Vietnamese, Thai, and Taiwanese lawyers working as one team. For Thai investors entering Vietnam, we advise on market-access review and investment structuring, IRC and enterprise registration, M&A due diligence and share-purchase agreements, joint-venture and shareholders’ agreements, DICA and foreign-exchange compliance, and applications for investment incentives. Contact Louis & Partners Thailand in Bangkok to structure your Vietnam investment before you commit capital.

This article provides general legal information only and does not constitute legal advice on any specific matter. Please consult qualified counsel and verify the latest announcements of the Vietnamese authorities before making investment decisions.

Legal Sources

  • Law on Investment No. 143/2025/QH15 (effective 1 March 2026), Articles 8, 14–22
  • Law on Enterprises No. 59/2020/QH14, as amended by Law No. 76/2025/QH15
  • Law on Public–Private Partnership Investment No. 64/2020/QH14, as amended by Law No. 90/2025/QH15