ESTABLISHMENT OF FOREIGN-INVESTED ENTERPRISES IN VIETNAM (FDI ESTABLISHMENT) 2026: ONCEPT AND LEGAL CHARACTERISTICS OF FOREIGN-INVESTED ENTERPRISES (FDI ENTERPRISES) UNDER THE CURRENT INVESTMENT LAW
In the context of increasingly deep international economic integration, Vietnam has become an attractive destination for foreign investors thanks to its stable investment environment, abundant workforce, and continually improving legal framework. When investing in Vietnam, one of the first issues that foreign investors seek to understand is the concept and legal status of foreign-invested enterprises under Vietnamese law.
In practice, many investors still confuse the concepts of a foreign-invested enterprise, a foreign-invested economic organization, and a wholly foreign-owned enterprise. A proper understanding of these concepts is essential for determining applicable investment conditions, the scope of business activities, and the legal procedures that must be followed.
To provide clients with a comprehensive overview of foreign-invested enterprises in Vietnam, Dai Quang Minh Company presents this article analyzing the current legal regulations governing the concept, legal characteristics, and key issues that investors should be aware of when establishing and operating this type of enterprise.
If you are interested in the reporting procedures applicable to enterprises engaged in the business of cybersecurity products and services, please contact Dai Quang Minh Company via Hotline: 0932.191.299; Zalo: 0932.191.299; Email: info@quangminhlawfirm.com; Viber: (+84) 337 926 405; WhatsApp: (+84) 337 926 405; WeChat: (+84) 337 926 405 (ID: pouniverse) for free, comprehensive, prompt, and accurate assistance..
In addition, Dai Quang Minh Company provides a wide range of legal services, including sublicenses and specialized permits, enterprise registration, investment advisory services, foreign labor and work permit services, as well as ongoing legal consultancy for both domestic and foreign-invested enterprises.
Contact us:
- Zalo: 0932.191.299
- Gmail: info@quangminhlawfirm.com
- Viber: (+84) 337926405/ (+84) 869672216
- WhatsApp: (+84) 337926405/ (+84) 869672216
- Wechat: (+84) 337926405 (ID: _pouniverse)/ (+84) 869672216 (ID: DQM_Verna)
- Telegram: (+84) 337926405/ (+84) 869672216
I. Legal Basis for Foreign-Invested Enterprises in Vietnam
The legal framework governing the operation of foreign-invested enterprises in Vietnam is primarily set out in the following regulations:
- Law on Investment No. 61/2020/QH14;
- Law on Enterprises No. 59/2020/QH14;
- Decree No. 31/2021/ND-CP;
- International treaties to which Vietnam is a party;
- Relevant sector-specific legal regulations.
Under the provisions of the 2020 Law on Investment, foreign investors are entitled to invest in and establish economic organizations in Vietnam, or to contribute capital, purchase shares, or acquire capital contributions in Vietnamese enterprises for the purpose of carrying out investment and business activities in accordance with applicable laws.
II. Definition of Foreign-Invested Enterprises (FDIs) Under Current Laws
Under the provisions of the Law on Investment 2020, current Vietnamese legislation no longer uses the term “foreign-invested enterprise” as it did previously, but instead adopts the concept of an “economic organization with foreign investment capital.”
An economic organization with foreign investment capital is defined as an economic organization whose members or shareholders include foreign investors.
Accordingly, in practice, a foreign-invested enterprise may be understood as an enterprise established and operating in Vietnam with the participation of foreign investors through capital contributions, regardless of the percentage of foreign ownership.
Common forms of foreign-invested enterprises include:
- Wholly foreign-owned enterprises;
- Joint venture companies between Vietnamese investors and foreign investors;
- Vietnamese enterprises in which foreign investors contribute capital or acquire shares;
- Enterprises established by economic organizations with foreign investment capital.
Why Choose Dai Quang Minh Company?
Highly Qualified Human Resources: Our team comprises experienced corporate legal experts and project legal consultants who have worked for many years with leading domestic private economic groups and major foreign-invested enterprises operating in Vietnam.
Complimentary Legal Consultation Policy: Clients are entitled to a comprehensive legal consultation package free of charge when using our services.
Professionalism and Extensive Experience: Our professionals possess in-depth knowledge of business establishment and corporate legal matters, ensuring prompt, accurate, and effective advisory services.
Time-Saving Solutions: By engaging our services, clients can save valuable time as we handle all procedures and documentation on a turnkey basis.
Strict Legal Compliance: We ensure that every process is carried out in full compliance with applicable laws and regulations.
Tailored and Flexible Services: Our consulting services are customized to meet the specific needs of each client, enabling businesses to select the most suitable and effective solutions.
A Trusted Partner: Dai Quang Minh Company has established a strong reputation for providing reliable business establishment and legal consulting services at reasonable costs to individuals and enterprises nationwide.
Confidentiality Assurance: We are committed to maintaining the highest level of confidentiality regarding our clients’ personal information and business data.
Comprehensive Guidance and Support: We provide detailed instructions on procedures and legal requirements, helping clients clearly understand every stage of the business establishment process.
Process Optimization: Our team streamlines business registration procedures, minimizing risks and reducing potential legal and administrative challenges.
Client-Centered Experience: We are dedicated to delivering the best possible client experience through professional advice and responsive, personalized support.
Focus on Business Growth: By entrusting legal procedures to us, clients can concentrate on their core business activities without concerns about legal formalities and compliance matters.
III. Legal Characteristics of Foreign-Invested Enterprises
Participation of Foreign Investors
This is the most fundamental characteristic used to identify a foreign-invested enterprise (FIE). A foreign investor may be an individual holding foreign nationality or an organization established under foreign law that carries out investment activities in Vietnam. The ownership ratio of foreign investors may range from a very small percentage to 100% of the charter capital, depending on the relevant business sector and Vietnam’s market access commitments.
Subject to Both Investment and Enterprise Laws
Unlike domestic enterprises, foreign-invested enterprises are generally governed by both the Law on Enterprises and the Law on Investment. In many cases, before establishing an enterprise, foreign investors are required to obtain an Investment Registration Certificate (IRC) and subsequently complete the enterprise registration procedure to obtain an Enterprise Registration Certificate (ERC).
Subject to Market Access Conditions for Foreign Investors
For certain investment and business sectors, foreign investors must satisfy specific conditions relating to charter capital ownership ratios, investment forms, scope of business activities, financial capacity, participation of Vietnamese partners in the project, and other requirements prescribed by international treaties and Vietnamese law. This constitutes a significant distinction between foreign-invested enterprises and wholly domestic enterprises.
Subject to a Separate Investment Management Regime
During their operation, many foreign-invested enterprises are required to fulfill investment-related obligations, including submitting investment reports, investment supervision reports, and carrying out procedures for amending investment projects when there are changes to the project’s objectives, scale, investment capital, or investors. Therefore, strict compliance with investment regulations is essential to ensure stable business operations and minimize potential legal risks.
IV. The Significance of Correctly Determining the Status of a Foreign-Invested Enterprise
Accurately determining whether an enterprise is classified as a foreign-invested enterprise has a direct impact on:
- Market access conditions;
- Enterprise establishment procedures;
- The obligation to obtain an Investment Registration Certificate (IRC);
- The right to contribute capital to, purchase shares in, or acquire capital contributions of Vietnamese enterprises;
- Business conditions applicable to conditional business sectors;
- Investment reporting and investment management obligations.
Investors should carefully assess the ownership structure and intended business activities to select the most appropriate investment model from the outset, thereby avoiding complex amendment procedures and potential legal complications in the future.
A thorough understanding of the concept and legal characteristics of foreign-invested enterprises is an essential first step for any investor entering the Vietnamese market. With an increasingly comprehensive investment legal framework and a favorable business environment, Vietnam continues to be an attractive destination for international investment capital. However, to ensure that investment activities are conducted in compliance with applicable regulations and achieve optimal efficiency, investors should carefully study the relevant legal provisions or seek advice from professional legal consulting firms.
Should you require assistance in establishing a foreign-invested enterprise in Vietnam or legal advice on investment-related matters, Dai Quang Minh Company is ready to accompany and support you throughout the entire process, helping to ensure legal compliance while saving valuable time and resources.
If you are interested in the reporting procedures applicable to enterprises engaged in the business of cybersecurity products and services, please contact Dai Quang Minh Company via Hotline: 0932.191.299; Zalo: 0932.191.299; Email: info@quangminhlawfirm.com; Viber: (+84) 337 926 405; WhatsApp: (+84) 337 926 405; WeChat: (+84) 337 926 405 (ID: pouniverse) for free, comprehensive, prompt, and accurate assistance..
In addition, Dai Quang Minh Company provides a wide range of legal services, including sublicenses and specialized permits, enterprise registration, investment advisory services, foreign labor and work permit services, as well as ongoing legal consultancy for both domestic and foreign-invested enterprises.
Contact us:
- Zalo: 0932.191.299
- Gmail: info@quangminhlawfirm.com
- Viber: (+84) 337926405/ (+84) 869672216
- WhatsApp: (+84) 337926405/ (+84) 869672216
- Wechat: (+84) 337926405 (ID: _pouniverse)/ (+84) 869672216 (ID: DQM_Verna)
- Telegram: (+84) 337926405/ (+84) 869672216
During the course of your business operations, if you have any questions or require further assistance, please do not hesitate to contact Dai Quang Minh Company. We are always ready to support and accompany you throughout the establishment, operation, and growth of your business.
We wish you sustainable growth, continued success, and remarkable achievements in your business endeavors.
Sincerely,
Dai Quang Minh Company. /.
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