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

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.

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

2. Approval Process for Capital Contribution or Share Acquisition

Foreign investors must obtain prior approval from the competent authority if:

• The acquisition leads to ownership of more than 50% of charter capital; or

• The target company operates in a conditional business sector for foreign investors.

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.

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

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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