Procedures for investing or starting a business in Vietnam as a foreigner have been greatly simplified in recent years. Starting a business in Vietnam is now fast and simple for investors and creators of foreign companies.
The new Law on Investment No. 61/2020/QH14 was passed by the National Assembly of Vietnam on June 17, 2020 and will come into effect from January 1, 2021 (“LOI 2020”).
Through this reform, the National Assembly of Vietnam aims to (i) promote the consistency between the investment laws and other laws, (ii) better attract and manage the foreign investment into Vietnam and at the same time (iii) maintain the national defense and security.
We summarize below the major changes of the LOI 2020.
A foreign investor when making investment into Vietnam must satisfy two sets of conditions: (i) the market access conditions and (ii) the sectoral regulatory conditions if applicable. However, since there is no consolidated list for such conditions, it has been challenging to determine applicable market access conditions for any specific sectors. In order to address this issue, the LOI 2020 introduces a new approach to the market access conditions for foreign investors to enter the Vietnamese market.
Under the LOI 2020, all sectors with market access restrictions on foreign investors will be consolidated into an official list to be issued by the Government (“List of Restricted Sectors”). The List of Restricted Sectors will be classified into two groups: (i) a group of sectors which are not opened to foreign investors and (ii) another group of sectors in which the market access of foreign investors are subject to conditions. Foreign investors who wish to invest in sectors falling outside of this List of Restricted Sectors will be treated in the same way as the Vietnamese investors are.
- Apply for investment license (certificate) for investors who are individuals, organizations and foreign companies in Vietnam;
- Apply for investment license (certificate) associated with the establishment of projects, enterprises and foreign affiliates for individual investors, institutions, foreign companies in Vietnam;
- Registration of business lines, operation contents for investment projects, enterprises, branch associated with investment projects for private investors, institutions, foreign companies in Vietnam;
- Registration of application for import and export, distribution, wholesale, retail;
- Registration for examination of investment projects.