Setting up a company in Vietnam

List Of Restricted Sectors In Which Foreign Investment In Vietnam

According to the Law on Investment (“LOI”), the list of restricted sectors details: 25 sectors where market access is not allowed; and 59 sectors where market access is conditional

I. Market access conditions applicable to foreign investors

The LOI introduces the concept of “market access conditions applicable to foreign investors.” Such conditions will be based the following:

1.  % foreign ownership in the enterprise;

2. Form of investment;

3. Scope of business activities;

4. Capability of investor(s);

5. Other conditions as prescribed in the relevant laws and international treaties to which Vietnam is a party.

II. Principles of Applying the market access conditions

Article 17 of Decree No. 31/2021/ND-CP ("Decree No. 31") provides for principles of applying market access conditions, which include the following:

  • Foreign investors will be entitled to market access conditions applicable to domestic investors for any sector not included in the List of Restricted Sectors;
  • Foreign investors conducting investment activities in sectors where market access is conditional must satisfy all market access conditions published on the NIIS by the MPI;
  • For the business lines that Vietnam has not committed to market access:
    • + If Vietnamese laws do not provide market access conditions, foreign investors will be entitled to market access conditions applicable to domestic investors;
    • + If Vietnamese laws provide market access conditions, Vietnamese laws will apply.
  • If there is a newly issued Vietnamese law that is applicable to business lines for which Vietnam has not committed to market access:
    • + Market access conditions applied to a foreign investor prior to the effective date of such new law will continue to apply;
    • + Market access conditions under LOI will apply in case of the establishment of a new company or investment project, acquiring an investment project, capital contribution, shares or capital contribution in another company, investment in the form of contract, amending or supplementing business lines that are subject to market access conditions. In this case, the competent authority should not reconsider market access conditions applicable to business lines that were previously approved;
  • Foreign investors who are subject to different market access conditions under different international treaties are able to choose to apply the market access conditions under one of the treaties for all of its registered business lines;
  • Foreign ownership limitation under international treaties will apply as follows:
    • + If multiple foreign investors contribute capital in, or acquire shares or capital contribution portion of, a company and the investors are subject to one or more international treaties, then the total ownership ratio of all foreign investors will not exceed the highest ratio in any of the international treaties regulating foreign ownership in a specific business line;
    • + If several foreign investors from one country or territory contribute capital in, or acquire shares or capital contribution portion of, a company, then the total ownership ratio of all foreign investors must not exceed the ownership ratio regulated under the international treaty applied for those foreign investors;
    • + Public companies, securities companies, securities investment fund management companies or securities investment funds, or securities investment companies will be governed by securities laws and regulations;
    • + If a company conducts several business lines that are subject to different ownership ratio, then the lowest foreign ownership ratio will apply.

III. List of sectors where market access is not allowed

1. Trade in goods and services on the list of goods and services under state monopoly.

2. Press activities and collection of news in any shape or form.

3. Catching or harvesting marine life.

4. Investigation and security services.

5. Administrative and judicial services, including judicial assessment services, bailiff services, property auction services, notary services, official receiver’s services.

6. Guest worker services.

7. Investment in construction of cemeteries for transfer of land use right and infrastructure thereon.

8. Direct collection of garbage from households.

9. Public survey services.

10. Blasting services.

11. Manufacture, sale of weapons, explosive materials and combat gears.

12. Import, dismantlement of used seagoing ships.

13. Public postal services.

14. Merchanting trade of goods.

15. Temporary import for re-export of goods.

16. Exercise of rights to export, import distribute goods on the list of goods to which foreign investors and foreign-invested business organizations do not have the right to export, import or distribute.

17. Collection, purchase, handling of public property at armed force units.

18. Manufacture of military equipment or materials; trade in military equipment, military weapons, specialized equipment and vehicles exclusively for used by the military and the police, specialized equipment and parts thereof, manufacture technology thereof;

19. Industrial property representative services and intellectual property assessment services.

20. Services that involve establishment, operation, sustainment and maintenance of maritime signals, water zones, water areas, public navigable channels and maritime routes; survey of water zones, water areas, public navigable channels and maritime routes serving the maritime announcements; survey, development and publishing nautical charts for water bodies, seaports, navigable channels and maritime routes; development and publishing of marine safety publications.

21. Maritime safety services in water zones, water areas and public navigable channels; electronic maritime information services.

22. Services that involve inspection (inspection and testing) and issuance of certificates to vehicles (including systems, assembled parts, devices and parts of vehicles); inspection and issuance of certificates of technical safety and environmental safety to vehicles, specialized equipment, containers, equipment for packaging dangerous goods used in transport; inspection and issuance of certificates of technical safety and environmental safety to vehicles and equipment used for exploration, extraction and transport of petroleum at sea; occupational safety inspection of equipment subject to strict occupational safety requirements on vehicles and equipment used for exploration, extraction and transport of petroleum at sea; fishing vessel inspection and registration services.

23. Services that involve survey, assessment and harvest of natural forests (including logging, hunting, trapping wild and rare animals, management of gene pools of plants, domestic animals and microorganisms used in agriculture.

24. Research or use of genetic resources of new domestic animals before evaluation by the Ministry of Agriculture and Rural Development.

25. Travel services, except international travel services for inbound tourists.

IV. Sectors where market access is conditional

1. Manufacture and distribution of media products, including video recordings.

2. Manufacture, distribute, and broadcast TV programs, stage performances, and cinematic works.

3. Provision of audio and television broadcasting services.

4. Insurance; banking, securities trading, and relevant services.

5. Postal and telecommunications services.

6. Advertising services.

7. Printing and publishing services.

8. Geodesy and cartography services.

9. Aerial photography services.

10. Education services.

11. Survey, extraction and processing of natural resources, minerals and petroleum.

12. Hydropower, offshore wind power and nuclear power.

13. Transport of goods and passengers by rail, air, road, river, sea, pipeline.

14. Fisheries.

15. Forestry and hunting.

16. Betting and casino business.

17. Security services.

18. Construction, operation and management of river ports, seaports and airports.

19. Real estate business.

20. Legal services.

21. Veterinary services.

22. Trade in goods and activities directly related to trade in goods of foreign service providers in Vietnam.

23. Technical analysis and inspection services.

24. Tourism services.

25. Health and social services.

26. Sports and entertainment services.

27. Paper production.

28. Manufacture of vehicles with more than 29 seats.

29. Development and operation of traditional markets.

30. Operation of Goods Exchanges

31. LCL consolidation services.

32. Audit, accounting and tax services.

33. Valuation services; valuation of enterprises serving equitization.

34. Services relevant to agriculture, forestry, aquaculture.

35. Manufacture of airplanes.

36. Manufacture of locomotives and railway carriages.

37. Manufacture, sale tobacco products, tobacco ingredients, equipment for tobacco industry.

38. Publisher’s activities.

39. Building and repair of seagoing ships.

40. Waste collection services, environmental monitoring services.

41. Commercial arbitration services, arbitration mediation services

42. Logistics services.

43. Coastal transport services.

44. Farming, manufacture or processing of rare and valuable plants, breeding of rare, valuable wild animals and processing thereof, including live animals and their products;

45. Manufacture of building materials.

46. Construction and relevant technical services.

47. Motorcycle assembly.

48. Services relevant to sports, fine art, performing art, fashion show, beauty pageant and other entertainment activities.

49. Auxiliary services for air transport; ground services at airports; catering services on aircraft; navigation information services, air navigation and control services, meteorological services.

50. Shipping agencies; towing services

51. Services relevant to cultural heritages, copyrights and related rights, photography, video recording, audio recording, art exhibitions, festivals, libraries, museums;

52. Services relevant to tourism promotion and advertising.

53. Representation, recruitment, scheduling, management services for artists and athletes.

54. Family-related services.

55. E-commerce activities.

56. Cemetery business, cemetery services and funeral services.

57. Aerial application.

58. Marine pilotage;

59. Business lines in which investment is under pilot mechanisms of the National Assembly, Standing committee of the National Assembly, the Government or the Prime Minister.

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