Direct Investment

Direct investment projects can belong to one of the following investment types:

§         Establishment of economic organizations in the form of 100% domestic owned or 100% foreign owned

§         Investment under contractual forms of BCC, BOT or BT contracts

§         Investment for business development (expansion of production capacity or for technology renovation..)

§         Purchasing shares or to contribute capital in order to participate in management of investment activities

§         Investment in the carrying out of a merger and acquisition of an enterprise

§         Other direct investments.

Economic organisations can consist of limited liability companies with multiple members, limited liability companies with one member, shareholding companies, private companies, cooperative companies or joint economic cooperation.

The following projects will be considered for approval and granted with investment certificates by the Prime Minister:

1.  Investment projects regardless of capital sources, investment scale in the following areas:

§         Construction and doing business of airports, air transportation

§         Construction of and doing business of national habours

§         Exploration, exploitation and processing of oil and natural resources

§         Broadcasting and television

§         Casino

§         Tobacco production

§         Establishment of tertiary education institutions (universities)

§         Develop industrial, export processing, hi-tech and economic zones

2.  Investment projects which are not listed in the Category (1), regardless of capital sources and have investment scale of more than 1,500 billion dong shall belong to the following areas:

§         Business in electricity, processing of natural resources and metallurgy

§         Construction of basic infrastructure for railways, roads, domestic shipping routes

§         Production and doing business of alcohol and beer

3.  Investment projects with foreign capital:

§         Shipping business

§         Installation and provision of postal, express, telecommunication and internet network; development of broadcasting and telecommunication networks

§         Printing, publication and press

§         Development of independent scientific research institutes

Provincial People’s Committee shall grant investment certificates to investment projects which are located outside the industrial, processing, hi-tech and economic zones including projects which are under approvals of the Prime Minister for their investment direction or projects investing in infrastructure development of industrial, processing, hi-tech zones in locations where the Management boards of the industrial, processing and hi-tech zones are not yet established.

Management board of the industrial, processing, hi-tech and economic zones shall grant investment certificates to investment projects located in the industrial, processing, hi-tech and economic zones, including investment projects approved by the Prime Minister in terms of investment direction, and including investment projects in development of infrastructure for the industrial, processing, hi-tech zones.

Indirect investment

Indirect investment can include the following areas:

§         Purchase of shareholding, shares, bonds and other valuable papers

§         By way of securities investment funds;

§         By way of other intermediary financial institutions

Liable entities including foreign capital enterprises regardless of registered locations for their headquarter offices, and individuals regardless of nationalities and residency shall be entitled to capital share or buying unlimited share from enterprises as regulated in the Enterprise Law, except the following cases:

1.  Proportion of foreign party’s participation in the stock market of Vietnam following laws on securities shall be a maximum of 49% of the total listed shares, registered transactions of a listing organisation, registered transaction at an stock exchange center or a maximum of 49% of the total listed fund in the certificate, registered transaction of an securities investment fund.  For the listing organisations, registered transaction of the foreign investment companies transferred to shareholding companies, the total number of listed stocks will be the total of publicly issued stocks with an approval of the government competent office.

2.  Proportion of the foreign party in exceptional cases shall follow regulations on investment laws, international conventions, foreign legislative documents and customs of international investments and other legislative documents of the associated sectors

3.  Proportion of the foreign party in enterprises with 100% of state owned capital which have been equitised or transferred to other forms following law on equitisation and law on enterprise transfer of the 100% state owned capital.

4. Proportion of foreign party in service enterprises following index of Vietnam’s commitment to business and services (Appendix of Protocol on Vietnam joining WTO). For instance, in banking areas, the current commitment to services stipulates that the total shares owned by foreign parties (either organisation or individuals) in joint stock commercial banks of Vietnam can not exceed 30% of the total registered capital of the banks or in telecommunication areas, the commitment to services stipulates that in areas of basic telecommunication services with network, foreign parties shall be entitled to invest under forms of maximum joint capital of 49%.

Foreign organisations, individuals shall not be limited in the proportion of owning bonds if they buy or sell bonds from a listed organisation or registered organisations at a stock exchange center. In case foreign investors own transferable bonds of an issuance organisation, after the transfer of bonds into shares, the issuance organisations must ensure that the shareholding proportion of foreign parties do not exceed 49% of the total listed or registered shares of that organisation.

Investors carry out their investment through securities fund by purchasing fund certificates from an investment fund. Fund certificate is a certified paper for ownership or benefit from profit for shares or capital proportion which is listed in the securities markets. Investment fund are set up from fund management companies which shall be entitled to set up many investment funds in different sectors with different operation scales and objectives.