According to the new Law on Investment, which came into force on 1 January 2021, Vietnam adopts a negative list approach to identify, on an exception basis, all business sectors to which market access are limited or excluded for foreign investors. Any business sectors that are not specifically included in the list will be open to foreign investors under the same market access conditions as Vietnamese investors.

On 26 March 2021, the Vietnam government issued Decree No. 31/2021/ND-CP. Appendix I of the said Decree released the foreign investment negative list, which is divided into two sections: (1) sectors in which market access by foreign investors are not yet permitted (prohibition list); (2) sectors in which foreign investors are subject to conditional market access (conditional access list).

25 business sectors are included in the prohibition list, for example, the trading of goods and services subject to a state monopoly; security and investigation services; fishing; media activities and information gathering; judicial administration services; overseas‑contracted employment agency services; the manufacture and trading of weapons, explosives and ancillary equipment; the import and dismantling of used seagoing vessels; goods transshipment; temporary importing for re‑exporting; and tourism services (other than those related to international tourists visiting Vietnam) etc.

The conditional access list, meanwhile, designates 59 business sectors as only suitable for foreign investment if certain specified conditions are met. The sectors that fall within this list include insurance, banking, securities brokerage and related services; the transport of goods and passengers; and betting/casino business; real estate; veterinary and legal services; auditing, accounting and bookkeeping services; e‑commerce; ship building and repair; and the sale and purchase of goods and activities directly related to the trading activities of overseas services providers in the country; hydropower, offshore wind power and nuclear energy; the production of construction materials; educational services; commodity exchange operations; aircraft manufacturing; commercial arbitration services; and sea and air transport services, etc.

For sectors where foreign investment is subject to certain conditions, market access conditions for foreign investors typically include restrictions on:

1. foreign ownership percentage;
2. form of investment;
3. scope of investment activities;
4. capacity of investors; and
5. other conditions as prescribed by the relevant regulators.  

Foreign investors that are planning to invest in Vietnam should check whether their target business operations are included in the negative list first.

KAIZEN Group is equipped with experienced and highly qualified professional consultants and is therefore well positioned to provide professional advices and services in respect of the formation and registration of company, application for various business licences and permits, company compliance, tax planning, audit and accounting in China. Please call and talk to our professional consultants for details.

See Also:
Vietnam WFOE Registration Procedures and Fees