Forms of Foreign Investment in Vietnam

From 01/01/2021, the Law on Investment 2020 in Vietnam came into force. According to the Vietnam Law on Investment 2020, there are five types of foreign investment in Vietnam.

• Investment in the establishment the economic organizations:

This type comprises two methods: Establishment of a company with 100% capital from foreign investors or establishment of a company between the domestic investors or the domestic government and foreign investors.  Before establishing the economic organizations, the investors must have the investment project, perform the procedures for issuance of the Investment Registration Certificate, satisfy the conditions on the percentage of charter capital ownership according to the Law on Securities, on equitization and transformation of state-owned enterprises, and the other conditions according to the international treaties that Vietnam signed (if any).

• Investment in the capital contribution, purchase shares, purchase contributed capital:

Capital contribution, purchase shares, purchase contributed capital are the types of indirect investment for foreign investors through the purchase of stocks, bonds, and other valuable documents. Investors must conform to the legal provisions on capital contribution, purchase share, and purchase contributed capital.

• Implementation investment project:

Foreign investors can sign the PPP contract. This is an investment method based on limited-term cooperation between the State and private investors through the signing of PPP contracts to attract private investors to participate in the implementation of investment PPP projects.

• Investment under the BCC contract:

BCC contract is signed between the domestic investors according to the Civil Law. BCC contract with at least one party being a domestic investor that performs the procedures for granting the Investment Registration Certificate.

• New forms of investment and economic organizations according to the Government’s rules.

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