{"id":65635,"date":"2025-04-22T09:55:57","date_gmt":"2025-04-22T02:55:57","guid":{"rendered":"https:\/\/maisonoffice.vn\/en\/?p=65635"},"modified":"2025-11-12T14:58:51","modified_gmt":"2025-11-12T07:58:51","slug":"law-on-foreign-investment-in-vietnam","status":"publish","type":"post","link":"https:\/\/maisonoffice.vn\/en\/legal\/law-on-foreign-investment-in-vietnam\/","title":{"rendered":"Legal framework for foreign investment in Vietnam"},"content":{"rendered":"

Thanks to its stable economic growth, competitive labor costs, and proactive government policies, Vietnam continues to be a strategic destination for foreign direct investment (FDI). This article explores the current FDI landscape, provides a comprehensive overview for foreign investors looking to enter or expand their presence in Vietnam.<\/span><\/p>\n\n\n\n
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Current FDI inflow figures<\/b><\/h2>\n

The Law on Foreign Investment in Vietnam<\/a>, specifically Law No. 61\/2020\/QH14<\/a>, continues to shape the country\u2019s appeal as a top destination for foreign investment in Vietnam. Effective since January 1, 2021, this legislation has streamlined investment procedures and offered incentives, fueling impressive FDI inflows. As of March 2025, Vietnam recorded over $6.9 billion in FDI in the first two months<\/a> alone\u2014a 35.5% surge year-on-year, according to the Foreign Investment Agency. This figure reflects the law\u2019s success in attracting capital, with manufacturing accounting for nearly 78.5%<\/a> of inflows in recent years, followed by real estate and technology sectors.<\/span><\/p>\n

The Law on Foreign Investment in Vietnam supports diverse investment forms – such as wholly foreign-owned entities and joint ventures\u2014while ensuring legal protections for investors. This framework has positioned Vietnam as a manufacturing hub, with 2023 seeing a record $23.5 billion in FDI disbursements<\/a>.<\/p>\n

Lear more: How to Set Up a Manufacturing Company in Vietnam<\/a><\/em><\/strong><\/p><\/blockquote>\n

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Law on Foreign Investment in Vietnam supports diverse investment forms<\/em><\/figcaption><\/figure>\n

Rights and obligations of foreign investors<\/b><\/h2>\n

The Law on Foreign Investment in Vietnam, notably Law No. 61\/2020\/QH14<\/a> effective from January 1, 2021, establishes a robust framework to protect and empower foreign investors entering Vietnam\u2019s dynamic market. This legislation ensures that foreign investment in Vietnam thrives by balancing investor rights with clear obligations, fostering a transparent and attractive business environment.<\/span><\/p>\n

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Foreign investors in Vietnam are guaranteed rights in a transparent manner<\/em><\/figcaption><\/figure>\n

Protection of assets and investments from expropriation<\/b><\/h3>\n

Under the Law on Foreign Investment in Vietnam, foreign investors enjoy strong safeguards against expropriation. Article 9 of Law on Investment guarantees that legitimate assets\u2014whether capital, property, or intellectual property\u2014cannot be nationalized or seized through administrative measures. In rare cases where assets are requisitioned for national security or public interest, investors are entitled to fair compensation as mandated by law.\u00a0This protection builds confidence for businesses engaging in foreign investment in Vietnam, ensuring their investments remain secure.<\/span><\/p>\n

Rights related to business autonomy and labor recruitment<\/b><\/h3>\n

The law grants foreign investors significant autonomy in managing their operations. According to the Law on Enterprises 2020<\/a> and the Law on Foreign Investment in Vietnam, investors can freely conduct business in sectors not prohibited by law, make independent investment decisions, and establish operational structures. Regarding labor, investors have the flexibility to recruit both domestic and foreign workers, adhering to Vietnam\u2019s Labor Code<\/a>. They can also form labor unions and set wages, empowering businesses to tailor their workforce to specific needs while expanding foreign investment in Vietnam.<\/span><\/p>\n

Lear more: Vietnam Labor Law for Foreigners: Work Permits & Contracts<\/a><\/em><\/strong><\/p><\/blockquote>\n

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Investors can freely conduct business in sectors not prohibited by law<\/em><\/figcaption><\/figure>\n

Financial rights: Transfer of profits, access to credit, and capital flow<\/b><\/h3>\n

Financial flexibility is a cornerstone of the Law on Foreign Investment in Vietnam. Foreign investors can freely transfer profits, capital gains, and other lawful earnings abroad in VND or foreign currency, provided tax obligations<\/a> are met, as outlined in Article 21. The law also ensures access to credit from local and international sources, enabling investors to finance projects efficiently. With no restrictive capital flow policies, Vietnam supports seamless repatriation of funds, making foreign investment in Vietnam a compelling choice for global businesses.<\/span><\/p>\n

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Rights relating to the autonomy of enterprises and the recruitment of workers<\/em><\/figcaption><\/figure>\n

Conditional and restricted investment sectors<\/b><\/h2>\n

Under the law on foreign investment in Vietnam, certain sectors are subject to specific conditions or outright restrictions for foreign investors. These regulations are designed to align with Vietnam\u2019s international commitments, including those under the World Trade Organization (WTO), Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and EU-Vietnam Free Trade Agreement (EVFTA).<\/span><\/p>\n

Conditional investment sectors refer to industries where foreign ownership is allowed, but subject to licensing, equity caps, or special operational conditions. Examples include:<\/span><\/p>\n