info Vietnam’s Key Investment Laws

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Jun 25, 2020
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Vietnam has been carrying out economic reforms since 1986, with the encouragement of domestic and foreign private investment as one of its main points of focus. Some of the most important that has been enacted to establish a framework for investment laws include:

• The Law on Enterprises

• The Law on Investment

• The Commercial Law

The Law on Enterprises and the Law on Investment are the main legislation governing foreign direct investment (FDI) activities in Vietnam and apply to all enterprises established by foreign as well as Vietnamese investors.



The Law on Investment provides for three basic forms of direct investment by foreign investors: joint ventures enterprises (JVE), 100 percent foreign-owned enterprises (100 percent FOEs) and various contractual forms. The contractual forms include business cooperation contracts (BCCs), build-operate- transfer contracts (BOTs), build-transfer-operate contracts (BTOs) and build-transfer contracts (BTs).



According to the Law on Enterprises, a foreign-invested enterprise (i.e., JVE or 100 percent FOE) can be established as a limited liability company (LLC) consisting of a single member or multiple members, a joint-stock company (JSC), or a partnership.



The Commercial Law also allows foreign investors with ongoing business relations and interests in Vietnam to set up representative offices (ROs) and commercial branches in Vietnam and stipulates the necessary conditions and procedures for doing so.



Foreign investors operating in Vietnam for the first time are required to combine the establishment of an LLC or JSC with a legitimate investment project, the licensing of which takes place simultaneously with the incorporation of the Vietnamese company. Subsequent to the first project, foreign investors can carry out additional projects either using the established corporate vehicle or by setting up new corporate vehicles.