Forms of Investment for Foreign Investors in Vietnam and Their Basic Content

Forms of Investment for Foreign Investors in Vietnam and Their Basic Content

1. What is a Foreign Investor?

According to Clause 19, Article 3 of the Investment Law 2020, a foreign investor is an individual with foreign nationality or an organization established under foreign law that conducts investment and business activities in Vietnam.

2. Forms of Investment for Foreign Investors in Vietnam

According to Article 21 of the Investment Law 2020, forms of investment include:

• Establishing economic organizations
• Contributing capital, purchasing shares, purchasing capital contributions
• Implementing investment projects
• Signing Business Cooperation Contracts (BCC)
• Other forms of investment and types of economic organizations as stipulated by the Government

3. Basic Content of Each Form of Investment

(1) Establishing Economic Organizations According to Article 22 of the Investment Law 2020, foreign investors must meet the market access conditions stipulated in Article 9 of the Investment Law 2020. Before establishing an economic organization, foreign investors must have an investment project and carry out procedures for the issuance of an investment registration certificate, except for small and medium-sized innovative startups.

(2) Contributing Capital, Purchasing Shares, Purchasing Capital Contributions According to Article 24 of the Investment Law 2020, foreign investors have the right to contribute capital, purchase shares, or purchase capital contributions of economic organizations. Conditions include market access conditions, national defense and security assurance, and land law regulations.

(3) Signing Business Cooperation Contracts (BCC) According to Article 27 of the Investment Law 2020, BCC contracts can be signed between domestic investors or between domestic investors and foreign investors. The parties establish a coordination committee to implement the contract.

(4) Implementing Investment Projects According to Sections 2 and 3 of Chapter IV of the Investment Law 2020, the process of implementing an investment project includes selecting investors, submitting applications, appraising, issuing investment registration certificates, and implementing the project.

4. Investing in Insurance Business

According to Article 3 of Decree 73/2016/ND-CP, organizations or individuals wishing to engage in insurance business must obtain an establishment and operation license from the Ministry of Finance. License applications need to be submitted to the Ministry of Finance.