Are foreign investors required to open a Direct Investment Capital Account (DICA) in Vietnam?

1. What is a Direct Investment Capital Account (DICA)?

A Direct Investment Capital Account (DICA) is a demand-payment account opened in foreign currency or Vietnamese Dong (VND) at an authorized bank to conduct receipt and payment transactions related to foreign direct investment activities in Vietnam.

Through this account, investors carry out transactions such as:

• Transferring investment capital from abroad into Vietnam;

• Contributing charter capital;

• Increasing or reducing investment capital;

• Remitting profits abroad;

• Recovering investment capital, transferring investment projects, or liquidating investments;

• Other transactions as provided by foreign exchange management regulations.

Using the correct account type is an essential condition to ensure the legality of investment cash flows and to serve as the foundation for capital transfer transactions throughout the project implementation.

2. Cases where opening a DICA is mandatory

Pursuant to Article 5 of Circular No. 06/2019/TT-NHNN, the following entities are required to open and use a Direct Investment Capital Account:

(i) Foreign-invested enterprises:

Including enterprises established under the form of investment to establish an economic organization that are subject to the issuance of an Investment Registration Certificate in accordance with the Law on Investment. This is the most common scenario for newly established FDI enterprises in Vietnam.

(ii) Enterprises where foreign ownership ratio arises following a division, separation, merger, or consolidation:

Where an enterprise is reorganized through division, separation, consolidation, or merger resulting in foreign investors holding an ownership percentage that falls within the scope of direct investment regulations, the enterprise must open and use a DICA accordingly.

(iii) PPP project enterprises:

For project enterprises established to implement investment projects under the Public-Private Partnership (PPP) model, opening a DICA is also mandatory to manage investment capital flows.

(iv) Foreign investors participating in Business Cooperation Contracts (BCC):

In cases where a BCC does not involve establishing an economic organization, the parties involved are still required to open and use a DICA to execute capital transactions in accordance with regulations.

3. Why does the law require opening a DICA?

Regulations on DICAs are established to ensure transparency in managing foreign direct investment capital flows.

Through a DICA, regulatory authorities can monitor capital contributions, capital adjustments, profit remittances, and capital recoveries by foreign investors. Concurrently, it serves as a basis for authorized banks to conduct foreign exchange control in compliance with the regulations of the State Bank of Vietnam.

For enterprises, strict adherence to DICA regulations helps guarantee the legality of capital contribution transactions, facilitating smooth processes when remitting profits abroad or undertaking capital reductions, project transfers, and investment terminations.

4. When to open a DICA

Enterprises subject to the requirement should complete account opening procedures immediately after receiving the Enterprise Registration Certificate and Investment Registration Certificate (if subject to issuance), and prior to making any cash capital contributions.

Contributing capital out of order or without routing funds through the designated account as prescribed may result in difficulties when proving the validity of capital contributions or executing future capital-related transactions.

5. Important considerations for foreign investors

Under current regulations, an enterprise is permitted to open only one DICA corresponding to each foreign currency type at a single authorized bank. Should the enterprise wish to change its serving bank, it must close the existing account prior to opening a new one in full compliance with legal procedures.

In addition, investors must accurately determine the investment form and enterprise model right from the project preparation phase. In certain cases, foreign-invested enterprises may not be required to open a DICA, but will instead be subject to a different foreign exchange management mechanism under the regulations of the State Bank of Vietnam.

Therefore, properly assessing the account-opening obligation at the outset helps enterprises minimize legal risks and avoid potential complications during capital contribution, profit remittance, or subsequent investment transactions.

6. Conclusion

The Direct Investment Capital Account (DICA) plays a critical role in the foreign exchange control framework for foreign direct investment activities in Vietnam. However, not every enterprise with foreign capital is automatically required to open a DICA; this obligation arises strictly for entities falling within the regulatory scope of foreign exchange laws.

Before establishing an enterprise or executing capital contribution transactions, investors should thoroughly review their investment model, ownership ratio, and relevant legal provisions to correctly identify their obligations. Full compliance with DICA regulations from the initial stage will safeguard the legality of investment cash flows and support seamless business operations throughout the project's lifecycle.

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