VIETNAM Law and Practice Contributed by: Minh Duong, Phong Nguyen and Justin Gisz, Asia Counsel Vietnam Law Company Limited
• other factors – large investment capital, contribu - tion to social issues or innovative start-ups. The final decision on granting incentives rests with the authorities after reviewing the investment proposal. If approved, the chosen incentives will be officially listed on the Investment Licence. 7.4 National Security Review Enforcement Reasons for Rejection During Review of a Project The authorities have the right to reject an investment proposal if there is evidence it could pose a threat to national security, cultural heritage or the environment. If they have doubts about the investor’s ability to fulfil their commitments (eg, lack of sufficient funds), they may also request additional documentation or even reject the application. Grounds for Termination After Investment Once an investment is approved, the authorities have the power to terminate it under various circumstanc - es, such as: • irreversible harm to national security, cultural treas - ures or the environment; • unresolved violations of environmental or labour safety regulations; • persistent non-compliance with the Investment Licence, despite the imposition of fines; • failure to rectify conditions imposed by a court or arbitration ruling; • an unregistered change in project location beyond the permitted timeframe; • land-use violations, including revoked permits or unauthorised use; • unfulfilled guarantees for project completion; • the investment is based on fraudulent transactions; or • termination is ordered by a court or arbitration rul - ing. Consequences of Non-Compliance Investors must strictly adhere to the terms of their Investment Licence and all applicable regulations. Any violations can result in administrative sanctions against the investor and/or the investment itself. These sanctions may include:
• fines; • the suspension of operations; or • the revocation of the Investment Licence and forced termination of the investment. Unauthorised Investments Investments undertaken without an Investment Licence are subject to administrative sanctions and a mandatory application for the necessary licence. If the investment fails the review process, the authorities will require its immediate termination. 8. Other Review/Approvals 8.1 Other Regimes Market Access Conditions Vietnamese law divides market access for foreign investors into three categories. • Restricted sectors – these industries are closed to foreign investment due to national security concerns, state monopolies or international trea - ties. Examples include investigation and security services and news media. • Conditional sectors – these sectors have limitations on foreign ownership or require specific approvals for investment. Examples include banking, insur - ance and advertising. Details on these conditions can be found in treaties like Vietnam’s WTO com - mitments, AFAS, EVFTA, and the CPTPP. A notable change in market access conditions in 2025 is the part opening of market access to foreign investors in the sectors of manufacturing of weapons, explo - sives, military materials, and equipment. • Unrestricted sectors – in most other industries, for - eign investors enjoy equal treatment with domestic investors and can freely invest through the Law on Investment. However, authorities may still review financial capacity and operations before approval. Bank Accounts Foreign investment activities in Vietnam require spe - cific accounts based on the investment form and size: • a Direct Investment Capital Account (DICA) is used for direct investments like establishing subsidiaries; and
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