Vietnam has foreign ownership limits in a number of sectors. These sectors are outlined in Decree 31/2021/ND-CP which clarifies and adds detail to guidelines on foreign investment in Vietnam outlined in the Law on Investment 2020. All up there are 25 business lines in which no foreign investment is permitted and 59 business lines in which foreign investment is restricted.

The exact amount of foreign ownership in Vietnam in any particular sector is determined either by World Trade Organisation Most Favoured Nation rules, Vietnamese law, or by the multitude of free trade agreements Vietnam has signed.

Below the restricted and prohibited business lines, with respect to foreign ownership limits in Vietnam, have been roughly categorised by sector. Where possible details on foreign ownership limits have been added along with United Nations Central Product Classification (CPC) codes.

Foreign ownership limits in Vietnam by category

Agriculture

From small-hold farmers to cooperatives to commercial farming operations, farming is a key pillar of the Vietnamese economy. According to the General Office of Statistics as of the end of September 2023, there were over 33 million Vietnamese working in the agricultural sector. 

Restricted

• Aquaculture;
• Forestry and hunting;
• Veterinary services;
• Services relevant to agriculture, forestry, aquaculture;
• Farming, manufacturing, or processing of rare and valuable plants; Breeding of rare, valuable wild animals and processing thereof, including live animals and their products; and
• Sowing seeds or spraying chemicals using a plane.

Prohibited

• Catching or harvesting marine life;
• Services that involve the survey, assessment, or harvest of natural forests (including logging, hunting, and trapping wild and rare animals; or the management of the gene pools of plants, domestic animals, and microorganisms used in agriculture; and
• Research or use of genetic resources of new domestic animals before they are evaluated by the Ministry of Agriculture and Rural Development.

Banking and Finance

Banking and finance are the backbone of the economy and are under strict regulatory control and monitored closely by the State Bank of Vietnam.

Restricted

• Insurance, banking, securities trading, and relevant services.

Banks

Foreign ownership limits for banks are outlined in Decree No. 01/2004/ND-CP. This decree limits foreign ownership of a bank to:

• No more than 5 percent for a foreign individual;
• A maximum of 15 percent for foreign institutions;
• A total of 20 percent for ‘foreign strategic investors’; and
• No more than 20 percent combined in the case of multiple foreign investors.

That said, local banks can raise their foreign ownership limits with the approval of the SBV.

(A foreign strategic investor is a foreign organisation that: 1, has the means to support a local bank and its development over the long term; and 2, from which a key executive is willing to sign a declaration to that effect.)

See also: Banking in Vietnam: Industry Overview 2023

Securities

Regulations on foreign ownership limits in securities are outlined in Decree 155/2020/ND-CP. The key provisions are:

• Any international treaty Vietnam is a signatory to will apply first; and
• Any domestic laws on specific business lines will come second.
• For restricted business lines, if no limit is specified, the cap is 50 percent;
• If a business has multiple business lines, the cap is the lowest foreign ownership limit among the group.

See also: The Vietnam Stock Exchange: Quick Guide 2023 

Insurance

Foreign investors can own up to 100 percent of the charter capital in an insurance business per Article 68 of the Law on Insurance Businesses.

There are, however, a number of additional requirements for foreign insurance companies looking to contribute capital to an insurance firm in Vietnam. These include:

• Proof of no criminal proceedings against the company in the last three years;
• It must have provided experience in the last seven years providing the insurance services it intends to provide in Vietnam; and
• It must have had total assets of at least US$2 billion in the year preceding its application.

See also: Insurance in Vietnam: Industry Overview 2024

Culture

Vietnam is very proud of its cultural heritage and works hard to protect it. With this in mind, there are a number of restrictions on foreign firms looking to invest in Vietnam’s cultural industries.

Restricted

• Services relevant to cultural heritage, copyright, and related rights, photography, video recording, audio recording, art exhibitions, festivals, libraries, and museums;
• Representation, recruitment, scheduling, and management services for artists and athletes; and
• Cemetery businesses, cemetery services, and funeral services.

Prohibited

• Investment in the construction of cemeteries and infrastructure thereon.

Education

Vietnam’s education sector is popular among foreign education providers. From English language schools to universities a broad range of foreign educational institutions have established a presence in Vietnam.

Restricted

• Education services.

See also: How to Start an English Centre in Vietnam: Ultimate Guide 2024

Energy

Vietnam’s rapidly developing economy has given it a seemingly unquenchable thirst for energy. Whereas much of the sector is open to foreign investment there are still some sectors that have restrictions.

Restricted

• Hydropower, offshore wind power, and nuclear power.

Entertainment

Vietnam’s entertainment sector has historically been relatively limited compared to other more well-developed economies. As disposable incomes have risen, however, discretionary spending on entertainment services has increased too.

Restricted

• Sports and entertainment services; 
• Services relevant to sports, fine art, performing art, fashion shows, beauty pageants, and other entertainment activities; 
• Betting and casino business; and
• Online electronic games.

Online electronic games

Online electronic games have become very popular in Vietnam among consumers. Vietnam, however, with its abundant low cost labour has also become a popular location for making video games. Foreign game companies should note that:

• Under Vietnam’s World Trade Organisation commitments, foreign firms can own up to 49 percent of an online electronic game company; but
• CPTPP members states can own up to 100 percent from January 14, 2024.

Health

Interest in healthcare and healthy living in Vietnam is rising rapidly, as is the ability of Vietnam’s burgeoning consumer class to spend on their health and well-being. A number of foreign firms are already active in the area, however, there are some restrictions on what foreign healthcare firms can do.

Restricted

• Health and social services; and
• Social services i.e. domestic violence support services.

Manufacturing

Vietnam’s manufacturing sector has been the backbone of Vietnam’s economic development for the past two decades. This is largely because, comparatively speaking, the sector is much more open than some others. That said, there are still some limits on foreign firms in the manufacturing sector in Vietnam.

Restricted

• Paper production;
• Manufacturing vehicles with more than 29 seats;
• Motorcycle assembly; and
• The manufacture and/or sale of tobacco products, tobacco ingredients, or equipment for the tobacco industry.

Media and Communications

Perhaps the most restricted sector in terms of foreign investment in Vietnam is the media and communications sector. The dissemination of information is heavily regulated and controlled and as such, there is very little room within which foreign firms can operate.

Restricted

• Manufacturing and distributing of media products, including video recordings;
• Manufacturing, distributing, and/or broadcasting TV programs, stage performances, and/or cinematic works;
• Provisioning of audio and television broadcasting services;
• Advertising services;
• Post and telecommunications services;
  • Businesses without network infrastructure
    • Foreign investors can own up to 65 percent; however,
    • Foreign investors from ASEAN member states can own up to 70 percent.
  • Businesses with network infrastructure
    • Foreign investors can own a maximum of 50 percent.
• Printing and publishing services; and
• Publisher’s activities.

Prohibited

• Press activities and the collection of news in any shape or form; and
• Public postal services.

Telecommunications

Non-facilities based telecommunications services can have up to 65 percent foreign ownership. In the case of virtual private networks this can be up to 70 percent. For members of the CPTPP there are no foreign ownership restrictions.

Facilities-based telecommunications services can have foreign ownership up to 51 percent. However, members of the CPTPP can own up to 65 percent.

Mining

Vietnam has vast natural resources–its rare earth deposits are estimated to be the second biggest in the world. Whereas Vietnam is open to working with foreign firms in mining, there are still some restrictions.

Restricted

• Geodesy and cartography services;
• Aerial photography services; and
• Survey, extraction, and processing of natural resources, minerals, and petroleum.

Miscellaneous

In the Investment Law 2020 restricted and prohibited business lines are provided as simple lists. In the process of categorising these limits, there were a few leftover items. These are those leftovers.

Restricted

• 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.

Prohibited

• Trade in goods and services on the list of goods and services under state monopoly; and
• Guest worker services.

Professional Services

Vietnam’s heavily regulated business landscape has seen demand for professional services surge. There are, however, limits to how much a foreign firm or individual can participate in the sector.

Restricted

• Legal services
• Audit, accounting, and tax services
• Valuation services; valuation of enterprises serving equitization
• Commercial arbitration services, arbitration mediation services
• Technical analysis and inspection services (CPC 8676).
  • This is essentially any sort of laboratory work or technical testing of products or goods. Food quality and hygiene, road safety checks, or forensic analysis, for example.

Prohibited

• Administrative and judicial services, including judicial assessment services, bailiff services, property auction services, notary services, official receiver’s services
• Opinion polling
• Industrial property representative services and intellectual property assessment services

Retail

Vietnam’s retail sector can be highly lucrative for foreign firms but there are some restrictions on what can be bought and sold.

Restricted

• Buying and selling goods (retailing);
• Development and operation of traditional markets (wet markets);
• Operation of commodity exchanges; and
• E-commerce activities.

Real Estate and Construction

In recent years Vietnam’s real estate sector has seen huge demand. This has been met with rapid urban construction and a growing demand for construction materials.

Restricted

• Real estate business;
• Manufacture of building materials; and
• Construction and relevant technical services.

Prohibited

• Blasting services.

Security

It’s common for security services to come with some restrictions in most countries around the world. Here’s what they are in Vietnam

Restricted

• Security services

Prohibited

• Investigation and security services;
• Manufacturing and selling weapons, explosive materials, and combat gear;
• Collection, purchase, or handling of public property at units of the armed forces;
• Manufacturing military equipment or materials; trading in military equipment, military weapons, specialised equipment, and/or vehicles exclusively for the use of the military and the police.

Details

Foreign security firms that wish to operate in Vietnam’s security services sector are covered by the conditions outlined in Decree 96/2016/ND-CP. These include:

• They can only form a joint venture;
• They can only provide capital for equipment and machinery; and
• The minimum investment is US$1 million.

Tourism

Tourism in Vietnam has been a huge money spinner in recent years (excluding the COVID years, of course). In fact, in 2019 the country welcomed 19 million tourists from all around the world. Whereas the sector has garnered interest from foreign hospitality firms there are still some restrictions on foreign investment.

Restricted

• Tourism services; and
• Services relevant to tourism promotion and advertising.

Prohibited

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

Trade

Vietnam’s trade policy has been pivotal to its economic development. There are a few restrictions in the area, however, these should have little impact on most foreign firms importing to, and exporting from Vietnam.

Prohibited

• Operating border gates;
• Temporary import for re-export of goods businesses; and
• Businesses that export, import, or 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.

Transport and Logistics

With all of its billions of dollars of imports and exports, Vietnam’s economic development is hugely dependent on transportation and logistics. Foreign investment in the sector is popular but there are some limits in particular business lines and other business lines in which foreign investment is prohibited.

Restricted

• Transport of goods and passengers by rail, air, road, river, sea, pipeline;
• Construction, operation, and management of river ports, seaports, and airports;
• Less than Container Load consolidation services;
• Manufacturing airplanes;
• Manufacturing locomotives and railway carriages;
• Building and repairing ships;
• Logistics services;
• Coastal transport services;
• Auxiliary services for air transport; ground services at airports; catering services on aircraft; navigation information services, air navigation and control services, meteorological services;
• Shipping agencies and ship towing services; and
• Marine pilotage businesses.

Prohibited

• Import and/or dismantlement of used ships;
• Services that involve the establishment, operation, and maintenance of maritime signals, water zones, water areas, public navigable channels, and maritime routes; the survey of water zones, water areas, public navigable channels, and maritime routes; the survey, development and publishing of nautical charts for water bodies, seaports, navigable channels and maritime routes; development and publishing of marine safety publications;
• Maritime safety services in water zones, water areas, and public navigable channels; electronic maritime information services; and
• 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.

WTO regulations regarding logistics are codified in Vietnam in Decree 163/2017/ND-CP. 

Air navigation services

Per Decree 89/2019/ND-CP foreign firms or individuals can own no more than 30 percent of a business providing air navigation services–air traffic control businesses for example. These businesses must also be at least 65 percent state-owned.

Airlines and air transport

Foreign firms are limited to no more than 34 percent ownership of an airline in Vietnam. This is specified in Decree 92/2016/ND- CP which was amended by Decree 89/2019/ND-CP. Furthermore:

• Only a Vietnamese individual or Vietnamese legal entity can be the majority shareholder;
• Foreign ownership in Vietnamese legal entities that are majority shareholders is capped at 49 percent; and
• Two-thirds of a company’s executive-level positions must be occupied by Vietnamese citizens.

Marine transportation services

Foreign ownership limits for Vietnamese flagged ships are:

• For EVFTA members foreign ownership is capped at 70 percent; but
• For everyone else foreign ownership is capped at 49 percent.
• Two-thirds of sailors must be Vietnamese.
• The captain or the first mate must be a Vietnamese citizen.

Container handling services 

• Foreign ownership is capped at 50 percent.

Inland waterway or rail freight 

• For ASEAN states foreign ownership is capped at 51 percent; but
• For everyone else foreign ownership is capped at 49 percent.

Road transport services

• Foreign ownership is capped at 51 percent.
• The firm cannot employ foreign drivers.

Rail transport services

• For ASEAN states foreign ownership is capped at 70 percent.

Road transport services

• For ASEAN states foreign ownership is capped at 70 percent.

Utilities

There are limits to investing in utilities in Vietnam though these are relatively limited.

Restricted

• Waste collection services and environmental monitoring services.

Prohibited

• Direct collection of garbage from households.