At present, as international integration continues to deepen, investors in Vietnam are increasingly looking toward new and rapidly growing “markets” abroad. Trade promotion remains a top priority in the process of expanding into overseas markets. Accordingly, Vietnamese investors need to have a clear understanding of the available forms of outward investment to ensure a smooth initial entry.
Under the provisions of Vietnamese law on outward investment as set out in the Investment Law 2025 (effective from 1 March 2026), the forms of outward investment include[1]:
Establishing an economic organization in accordance with the laws of the host country;
Making investments under contractual arrangements overseas;
Contributing capital, purchasing shares, or acquiring capital contributions in an overseas economic organization in order to participate in its management;
Purchasing and selling securities and other valuable papers, or investing through securities investment funds and other intermediary financial institutions overseas; and
Other forms of investment as permitted under the laws of the host country.
In addition, this activity is further guided in detail by Decree No. 103/2026/ND-CP (effective from 3 April 2026), Decree No. 135/2015/ND-CP (effective from 15 February 2016), and the foreign exchange management regulations issued by the State Bank of Vietnam.
1. Establishing an economic organization in accordance with the laws of the host country
An economic organization is an entity established and operating in accordance with the laws of the host country. Depending on the jurisdiction receiving the investment, the applicable laws may prescribe different types of economic organizations[2]. Therefore, Vietnamese investors must select an appropriate structure and comply with the laws of the host country. Conducting prior research on the market and the legal framework of the host country is essential for the effective implementation of an outward investment project.
From the perspective of Vietnamese law, an economic organization includes enterprises, cooperatives, unions of cooperatives, and other entities engaged in investment and business activities[3]. On that basis, where a Vietnamese investor establishes an economic organization overseas, such activity is classified as a form of direct outward investment in accordance with Article 39 of the Investment Law 2025.
Accordingly, the investor is required not only to comply with the laws of the host country regarding the establishment and operation of the economic organization, but also to satisfy the conditions and follow the procedures for outward investment under Vietnamese law. These include, among others, obtaining an "Outward Investment Registration Certificate" (except in exempt cases[4]), registering foreign exchange transactions, etc. Given that this form allows investors to directly control and manage business operations, it is one of the most commonly adopted forms of outward investment in practice.
2. Making investments under contractual arrangements overseas
Investment in the form of overseas contracts is one of the forms of outward investment recognized under Vietnamese law. However, to date, Vietnamese legal instruments, including the Investment Law 2020, the Investment Law 2025, and their guiding decrees, have not provided a detailed definition or interpretation of this form of investment.
In practice, this form may be understood as an arrangement whereby a Vietnamese investor enters into a contract with a foreign partner to carry out investment activities without establishing a new legal entity in the host country. Common types of contracts may include business cooperation contracts (BCCs)[5], production sharing contracts (PSCs), or other cooperation agreements for investment, exploitation, and business operations with foreign partners[6]. In terms of legal nature, this form is based on the principle of freedom of contract under the Civil Code 2015 and is primarily governed by the laws of the host country.
This form of investment offers flexibility to investors as it does not require the establishment of a legal entity, thereby saving time and costs. However, the rights and obligations of the parties depend largely on the contractual terms, which may give rise to potential disputes if mechanisms for management, profit-sharing, and dispute resolution are not clearly defined. At the same time, investors should pay close attention to the legal requirements of the host country to ensure the validity and enforceability of the contract.
A practical point to note is that where cooperation between the parties results in the establishment of a new legal entity in the host country (e.g., a joint venture company), the licensing authority, the Ministry of Finance of Vietnam, generally takes the view that such an arrangement is no longer considered "investment in the form of overseas contracts". Instead, depending on the substance of the transaction, the project may be reclassified as the establishment of a new economic organization as analyzed in Section 1, or as capital contribution, share acquisition, or acquisition of capital contributions as discussed in Section 3. Therefore, accurately identifying the legal nature of the investment structure from the outset is crucial to ensure proper declaration of the form of outward investment.
3. Contributing capital, purchasing shares, or acquiring capital contributions in an overseas economic organization in order to participate in its management
Under the applicable regulations, Vietnamese investors may carry out outward investment by contributing capital, purchasing shares, or acquiring capital contributions in an overseas economic organization in order to participate in its management. This is one of the most common forms of direct investment, particularly in the context of increasingly active cross-border mergers and acquisitions (M&A).
In substance, this form allows investors to use their capital to participate in the ownership structure of an existing or newly established economic organization abroad, while also obtaining the right to be involved in its management and operations. Such management participation may be exercised through voting rights, the right to appoint management personnel, or participation in governing bodies such as the board of directors or members’ council, depending on the ownership ratio and the agreements between the parties.
Compared to indirect investment (such as the mere purchase of securities), the distinguishing feature of this form lies in the element of “participation in management”, which reflects a higher degree of involvement and control by the investor over the investee entity. However, the law does not automatically require the investor to hold a controlling interest. In practice, even where the ownership ratio is below 50%, the investor may still be deemed to participate in management if there are agreements or mechanisms that confer corresponding governance rights.
4. Purchasing and selling securities and other valuable papers, or investing through securities investment funds and other intermediary financial institutions overseas
Under the applicable regulations, Vietnamese investors may conduct outward investment through the purchase and sale of securities and other valuable papers, or by investing through securities investment funds and other intermediary financial institutions overseas. This constitutes a form of indirect outward investment[7], which is essentially financial investment in nature. In this form, the investor does not directly participate in the management or operation of the investee entity, but primarily seeks returns from fluctuations in the value of financial assets or from the performance of investment funds.
A key legal characteristic of this form is the strict control over eligible participants. Specifically, for individuals holding Vietnamese nationality, the law permits indirect outward investment only in the form of participation in overseas share-based incentive or stock award programs[8]. Meanwhile, institutional investors in Vietnam are permitted to undertake indirect outward investment through the following methods: (i) proprietary trading (self-investment) in indirect outward investment; and (ii) entrusted indirect outward investment.
In the case of proprietary trading, the investing organization uses its own capital to carry out investment transactions in foreign markets. Entities permitted to engage in such activities include[9]: (i) securities companies and fund management companies; (ii) securities investment funds through fund management companies (hereinafter referred to as securities investment funds), and securities investment companies; (iii) insurance enterprises; (iv) commercial banks; (v) general finance companies; and (vi) the State Capital Investment Corporation. Such limitations on eligible entities are intended to ensure the safety of the financial system and to control capital outflows associated with this form of investment.
Meanwhile, under the entrusted investment model, an economic organization does not directly conduct investment activities but instead allocates capital to entrusted entities (typically intermediary financial institutions) to carry out overseas investments on its behalf. However, the law also establishes a clear distinction between these two methods, whereby an organization that has been licensed to conduct proprietary indirect outward investment is not permitted to simultaneously engage in entrusted investment through another entity. This regulation aims to prevent overlaps, ensure effective control over capital flows, and clarify investment management responsibilities.
Overall, indirect outward investment offers advantages in terms of flexibility, portfolio diversification, and access to international financial markets without the need to establish a commercial presence abroad. However, due to the stringent controls on eligible entities, methods, and conditions of implementation, this form is, in practice, primarily suitable for financial institutions or professional investors with sufficient financial capacity and international investment experience.
5. Other forms of investment as permitted under the laws of the host country
In addition to the specific forms of investment listed above, Vietnamese law also recognizes an “open-ended” provision under which investors may carry out outward investment through other forms as permitted by the laws of the host country. This provision establishes a flexible legal basis, enabling Vietnamese investors to access and adopt diverse and modern investment structures in line with international practices.
However, as this form is not specifically regulated under Vietnamese law, its application requires investors to exercise particular caution in determining the legal nature of the transaction. The competent authorities of Vietnam will review the application dossier based on supporting documents evidencing the form of investment as recognized under the laws of the host country, and on that basis determine the corresponding legal obligations, including licensing procedures, foreign exchange management, and reporting requirements.
Accordingly, in order to properly identify this form of investment, the investor is required to submit supporting documents demonstrating such investment form in accordance with the laws of the country or territory receiving the investment.
Vietnamese
