Vietnam Foreign Investment Law Explained (2026) — Market Access, IRC & Conditional Sectors
Vietnam is one of Asia's most open emerging markets for foreign capital — but "open" is sector-specific. This guide explains how the foreign investment regime works in 2026: the market-access buckets, ownership caps, the IRC/ERC pathway, and incentives. It's an orientation, not legal advice — and the law is actively changing, so confirm specifics with a licensed adviser.
⚖️ Law in transition. The new Law on Investment (No. 143/2025/QH15) replaces the 2020 law from 1 March 2026; the updated conditional-business-lines list takes effect 1 July 2026. A further amending law (No. 24/2026/QH16, reported as passed on 24 August 2026 and not yet checked against the gazette) is reported to replace the conditional-lines list from 1 March 2027. Details below reflect the framework as of October 2026.
The negative-list principle
Vietnam regulates foreign investment by exception: investors may do anything that isn't on a restricted list. Activities sort into open (foreigners treated like domestic investors), conditional (allowed subject to ownership caps, licenses, or local-partner rules), and prohibited. Everything downstream — ownership, licensing, structure — flows from which bucket your business line lands in.
Step-by-step
- 1
Check the market-access list for your sector
Vietnam applies a 'negative list' approach: foreign investors can do anything not restricted. Sectors fall into three buckets — open (treated like domestic investors), conditional (allowed with conditions such as ownership caps, licenses, or local-partner requirements), and prohibited. Confirming which bucket your activity sits in is the first and most important step.
- 2
Confirm the foreign ownership cap
Many conditional sectors cap how much foreigners may own — for example, 49% or 51% in certain logistics and telecoms services, lower in sensitive areas, and up to 100% in most manufacturing and many services. Caps come from the WTO commitments, sector laws, and trade agreements like the CPTPP and EVFTA.
- 3
Obtain an Investment Registration Certificate (IRC)
Foreign-invested projects have traditionally needed an IRC from the provincial investment authority before setting up the company. The 2025 overhaul streamlines this — including letting foreign investors establish an enterprise in some cases without an upfront project/IRC — but for most greenfield projects the IRC remains the gateway document.
- 4
Register the enterprise (ERC) and licenses
After the IRC, you register the company itself to get an Enterprise Registration Certificate (ERC), then any sub-licenses your conditional sector requires (e.g. trading, distribution, fintech, or education permits). The ERC is the equivalent of incorporation.
- 5
Use incentives where you qualify
Encouraged sectors and locations (high-tech, large manufacturing, disadvantaged areas, R&D) can access preferential corporate income tax rates and tax holidays. Structuring the project to fit an incentive category, where genuine, materially changes the after-tax economics.
Foreign ownership caps in practice
The foreign ownership limit is the number that decides whether you can build a wholly foreign-owned enterprise or need a local partner. Most manufacturing and many services allow 100%; conditional business lines such as certain logistics, telecoms, advertising, and distribution carry caps (often 49% or 51%) or extra licensing. Vietnam's commitments under the CPTPP and EVFTA can open sectors faster than the baseline for qualifying investors.
The IRC → ERC pathway
A foreign-invested greenfield project typically obtains an Investment Registration Certificate (IRC) recording its scope, capital, and location, then registers the company to receive an Enterprise Registration Certificate (ERC) — the equivalent of incorporation — followed by any sector sub-licenses. The 2025 reform streamlines this and, in defined cases, lets investors skip the upfront IRC, but for most projects the IRC is still the entry document. See the step-by-step in our company registration guide.
The legislative timeline
| Date | Instrument | What it does |
|---|---|---|
| 1 Jan 2026 | Railway-law amendments in Article 50.3 | The only part of Law 143/2025/QH15 that took effect before March. |
| 1 Mar 2026 | Law on Investment No. 143/2025/QH15 | Replaces the 2020 law; narrows investment-policy approval; allows setting up a company before the investment certificate in defined cases. |
| 31 Mar 2026 | Decree 96/2026/ND-CP | Implementing rules, reported to include revised conditional business lines (reported by DFDL; verify against the gazette). |
| 1 Jul 2026 | Article 7 and Appendix IV of Law 143/2025 | The conditional business-line list changes take effect. |
| 24 Aug 2026 | Law No. 24/2026/QH16 | Reported as passed; reported to replace Appendix IV with a new list, effective 1 March 2027 (some provisions 1 January 2027). Secondary summaries only; verify. |
| By 1 Mar 2027 | Sector ministries | Must issue management measures for sectors removed from the conditional list. |
Summaries disagree on the size of the conditional list (reported figures include 198, about 200 and 142 for the 2025 law, and 137 from 1 March 2027). Read the list in the legal text for your own business line.
Two routes to incorporation
-
Standard: IRC first, then ERC
Most greenfield projectsApply for the Investment Registration Certificate, then register the enterprise. Practitioners put the IRC review at about 15 working days from a complete dossier.
Gate: You cannot contribute capital through the project account until the IRC exists.
-
Establish-first: ERC, then IRC
Defined cases under the 2025 lawA foreign investor may set up the economic organisation first, provided the market-access conditions applying at establishment are met, and complete the IRC afterwards.
Gate: A draft implementing decree referred to a period of about six months to complete the IRC — verify against the final decree.
-
Then: licences and capital
CompanySector sub-licences and capital contribution follow whichever route you used.
Gate: Ask counsel how the 90-day capital deadline applies on your route; advisers flag it as unresolved for ordinary projects.
Summaries of the 2025 investment-law reforms by Forvis Mazars, DFDL and others; not the gazette text.
Market-access checklist
Classify
- Business line located on the current list (open, conditional or prohibited)
- Foreign-ownership cap or licence condition identified
- Treaty benefits (CPTPP, EVFTA) checked for your investor's country
Plan for change
- Status of your line after the 1 March 2027 list confirmed
- Management measures from the sector ministry monitored
- Incentive eligibility and the 15% global minimum tax modelled together
File
- Route chosen: IRC first or establish-first
- Dossier documents legalised and consistent
- Capital timeline agreed with the bank and adviser
Frequently Asked Questions
What law governs foreign investment in Vietnam?
The core framework is the Law on Investment together with the Law on Enterprises. Vietnam passed a major overhaul — the Law on Investment No. 143/2025/QH15 — which replaces the 2020 Law on Investment from 1 March 2026, with the updated list of conditional business lines (Appendix IV) taking effect from 1 July 2026. The reform narrows the projects needing investment-policy approval, removes dozens of conditional business lines, and in some cases lets foreign investors set up a company without first obtaining an Investment Registration Certificate. Because the regime is in transition, always confirm the current rule for your specific sector with a licensed adviser.
Can a foreigner own 100% of a company in Vietnam?
In many sectors, yes — most manufacturing and a wide range of services allow 100% foreign-owned enterprises (a WFOE). But 'conditional' sectors impose foreign ownership caps (commonly 49% or 51%) or require a local joint-venture partner. Whether 100% ownership is possible depends entirely on the specific business line, so the sector check comes before any structuring decision.
What are conditional business lines?
Conditional business lines are sectors where investment is allowed only if specific conditions are met — ownership limits, minimum capital, licenses, or approvals. They are listed in an appendix to the Law on Investment. Recent reforms have trimmed the list, but law-firm summaries disagree on the exact count (figures between about 137 and 198 are reported, depending on which instrument and date they describe), so check the legal text in force before relying on a number.
What is an IRC and do I still need one?
An Investment Registration Certificate (IRC) is the approval a foreign-invested project obtains from the provincial investment authority, recording the project's scope, capital, and location. It has been the standard first step before company registration. The 2025 Law on Investment streamlines the process and, in defined cases, allows establishing an enterprise without an upfront IRC — but for most greenfield foreign projects the IRC is still the gateway.
How do trade agreements affect foreign ownership?
Vietnam's commitments under the WTO, CPTPP, and EVFTA progressively open sectors and, in some cases, allow higher foreign ownership or faster liberalization than the baseline. Investors from CPTPP or EU member states may benefit from more favorable market access in specific services, which is worth checking alongside the domestic conditional-sector list.
Sources
- Law on Investment 143/2025/QH15: Invest Vietnam ("Starting from March 1, 2026…"), Forvis Mazars legal alert, DFDL, Vision & Associates, Vietnam Briefing
- Law No. 24/2026/QH16 (24 August 2026): LuatVietnam English summary; Decree 96/2026/ND-CP: DFDL
- Conditional-lines counts differ between summaries (Apolat Legal, Viet An Law, Global Law Experts); none is the official text
The law is changing quickly. Not legal advice; confirm each date and list entry in the current legal text.