Investment Forms in Vietnam Under the Law on Investment 2025: The Latest Update

1. Investment forms in Vietnam

1.Investment to establish an economic organization.

2.Investment by capital contribution, purchase of shares, or purchase of capital contributions.

3.Execution of an investment project.

4.Investment in the form of a Business Cooperation Contract (BCC).

5.New forms of investment and types of economic organizations as prescribed by the Government.

2. Investment to establish an economic organization

This is the most common form, allowing investors to directly participate in the management and operation of the enterprise.

• For domestic investors: Establish an enterprise in accordance with the Law on Enterprises corresponding to the desired type, such as a Limited Liability Company, Joint Stock Company, Partnership, etc., according to the provisions of the law on enterprises and the law corresponding to each type of economic organization.
• For foreign investors: Foreign investors may establish an economic organization to execute an investment project before performing the procedures for issuance or adjustment of the Investment Registration Certificate, and must satisfy market access conditions for foreign investors as prescribed in Article 8 of the Law on Investment when performing the procedures to establish an economic organization.

3. Investment by capital contribution, purchase of shares, or purchase of capital contributions

1.Investors have the right to contribute capital, purchase shares, or purchase capital contributions of an economic organization.

2.Capital contribution, purchase of shares, or purchase of capital contributions of an economic organization by foreign investors must satisfy the following regulations and conditions:

• Market access conditions for foreign investors as prescribed in Article 8 of this Law;
• Assurance of national defense and security in accordance with this Law and relevant laws;
• Provisions of land law on conditions for receiving land use rights and conditions for land use on islands; in border communes, wards, and special zones; and in coastal communes and wards.

3.Foreign investors shall perform procedures for registration of capital contribution, purchase of shares, or purchase of capital contributions of an economic organization prior to changing members or shareholders if they fall into one of the following cases:

• The capital contribution, purchase of shares, or purchase of capital contributions increases the ownership ratio of foreign investors in an economic organization engaged in business sectors or trades with conditional market access for foreign investors;
• The capital contribution, purchase of shares, or purchase of capital contributions results in foreign investors or economic organizations prescribed in Points a, b, and c, Clause 1, Article 20 of this Law holding more than 50% of the charter capital of the economic organization in cases where: the ownership ratio of charter capital of foreign investors increases from less than or equal to 50% to over 50%; or the ownership ratio of charter capital of foreign investors increases when the foreign investors already owned over 50% of the charter capital in the economic organization;
• Foreign investors contribute capital, purchase shares, or purchase capital contributions of an economic organization that holds a Land Use Right Certificate for land on islands; in border communes, wards, and special zones; in coastal communes and wards; or other areas affecting national defense and security.

4. Investment in the form of a Business Cooperation Contract (BCC)

a. A BCC contract signed between domestic investors shall be performed in accordance with the provisions of civil law and relevant laws.

b. A BCC contract signed between a domestic investor and a foreign investor, or between foreign investors, shall perform the procedures for issuance of an Investment Registration Certificate in accordance with Article 26 of this Law.

c. Parties to a BCC contract shall establish a coordinating board to perform the BCC contract. The functions, tasks, and powers of the coordinating board shall be agreed upon by the parties.

d. During the performance of the BCC contract, the participating parties may agree to use assets formed from the business cooperation to establish an enterprise in accordance with the law on enterprises.

5. New forms of investment and types of economic organizations

To catch up with global trends, the Law on Investment 2025 also opens a legal corridor for new forms of investment as prescribed by the Government. This creates a premise for digital economic models, circular economies, and venture capital funds to develop strongly in the future.

6. Conclusion

Conclusion In summary, the Law on Investment 2025 has established a system of diverse and transparent investment forms, creating optimal conditions for both domestic and foreign investors. Mastering the regulations on establishing economic organizations, contributing capital, purchasing shares, or BCC contracts will help investors be proactive in their business roadmap and ensure legal compliance. In the context of constantly evolving new economic models, choosing the right form of investment not only protects interests but is also the key to effectively exploiting the dynamic potential of the Vietnamese market.

 

The information contained in this article is general and intended only to provide information on legal regulations. DB Legal will not be responsible for any use or application of this information for any business purpose. For in-depth advice on specific cases, please contact us.

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