Investment Restrictions

Article 6 of the IL lists the following sectors in which investments are prohibited:

• certain drugs;
• certain chemicals and minerals;
• business in specimens of endangered and rare wild fauna or flora;
• prostitution
• human trafficking;
• purchase or sale of human tissues or parts of the human body; and
• activities relating to asexual reproduction.

Appendix No. 4 attached to the IL lists the 267 sectors in which investments are conditional. These conditions are generally applicable to both domestic investors and foreign investors. However, there are several conditions that are only applied to foreign investors. To invest in a conditional investment sector, the investors must satisfy the specific requirements for that sector. These requirements will vary from sector to sector and may include cooperation with a Vietnamese partner, the legal capital amount, specific additional licences, a specified financial capacity, specific experiences, specific facilities or special permission from the competent authorities.

Of note is that conditional investments must comply with the international commitments (e.g. in accordance with WTO accession) given by Vietnam to open the market in accordance with the transition schedule. For example, from 1 January 2009, Vietnam committed to allow 100% foreign owned companies to carry on import, export and distribution businesses as agreed in the transition schedule. However, distribution is still considered as a conditional investment in other legal aspects.

With the exception of sectors where 100% foreign participation is not allowed (e.g. banking, etc.), there are no specific rules which stipulate local participation.

There are no other investment restrictions in Vietnam.