Key legal considerations for FDI Enterprises executing outward investment from 3 April 2026

Corporate & Tax Advisory Doing Business in Vietnam Legal Articles

08/07/2026

On 3 April 2026, Decree No. 103/2026/ND-CP, detailing a number of articles of Law on Investment 2025 regarding outward investment activities, officially takes effect. Overall, this new regulation provides clearer procedural streamlining and promotes the comprehensive digitization of the licensing process. In the meantime, it concurrently imposes significantly stricter financial conditions, particularly for economic organizations in which foreign investors hold more than 50% of the charter capital – the FDI enterprises.

I. “Key” conditions that FDI enterprises must comply with when conducting outward investment

One of the most rigorous screening provisions of Decree No. 103/2026/ND-CP is stipulated in Article 15 – conditions for carrying out outward investment activities. This includes specific conditions applicable exclusively to economic organizations in which foreign investors hold more than 50% of the charter capital, namely:

Mandatory use of owner’s equity: Enterprises are only permitted to utilize sources from their owner’s equity to finance outward investment activities. This capital absolutely must not include the registered contributed capital designated for the implementation of projects in Vietnam. In other words, enterprises are strictly prohibited from utilizing borrowed capital to fund overseas projects.
Proof of profitability for 02 consecutive years: Enterprises are strictly required to demonstrate profitable business operations for 02 consecutive years immediately preceding the year of outward investment registration. This profit figure cannot merely rely on internal reporting but must be transparently determined in accordance with audited financial statements (if any).
Closed-loop capital increase procedure: In the event that an FDI enterprise intends to utilize additional contributed capital for outward investment, the enterprise must first complete the procedures to obtain an Outward Investment Registration Certificate. Subsequently, it must carry out the statutory procedures for capital increase and fully contribute the charter capital in Vietnam.

II. Classification mechanism for outward investment procedures based on capital scale

Decree 103 has established a classification mechanism for the administrative procedures that an outward investment project must fulfill based on its capital scale, specifically as follows:

Outward investment projects with a capital scale of under VND 7 billion (equivalent to approximately USD 280,000): Projects with a capital scale of less than VND 7 billion that do not engage in conditional business lines as stipulated in Article 11 of Decree 103 shall be exempt from the procedure of applying for an Outward Investment Registration Certificate. Accordingly, the Investor is not required to carry out the corresponding administrative procedures at the Ministry of Finance. Instead, they merely need to declare the project information on the National Information System on Investment to receive an automated dossier code. Subsequently, this code will be used to conduct the procedure for registering foreign exchange transactions at the regional branch of the State Bank of Vietnam.
Outward investment projects with a capital scale from VND 7 billion to under VND 1,600 billion: The investor is mandatorily required to carry out the procedure for applying for an Outward Investment Registration Certificate, and the authority to process the dossier rests with the Ministry of Finance. The processing time for the administrative procedure is 15 working days from the date the competent authority receives a valid dossier.
Projects with a capital scale of VND 1,600 billion or more: The Ministry of Finance shall be responsible for appraising and reporting to the Prime Minister for consideration and approval of the investment policy prior to officially issuing the Outward Investment Registration Certificate for the project. The capital scale threshold in this case has doubled from VND 800 billion (under Law on Investment 2020) to VND 1,600 billion.

III. New developments in regulations on the transfer of outward investment capital and profit repatriation

Decree 103 has introduced new frameworks that simultaneously offer flexibility and impose stringent controls regarding financial matters for outward investment activities:

Project preparation costs: Investors are permitted to transfer a portion of funds, goods, or machinery abroad prior to the issuance of the Outward Investment Registration Certificate (if required) to cover expenses related to the preparation of the investment project. This includes activities stipulated in Article 32.3 of Decree 103, such as market research, bidding participation, mergers and acquisitions (M&A), and field surveys. However, the ceiling for such fund transfers is strictly capped at no more than 5% of the total registered investment capital and a maximum of USD 300,000. In cases of large-scale overseas investment projects, this prescribed cap on capital transferred abroad may be insufficient to meet the investment needs during the initial phase.
Recognition of the Share Swap mechanism: This is a notable highlight, as Law on Investment 2025 and Decree 103 officially permit Vietnamese investors to utilize shares, contributed capital, or profits from an overseas economic organization or their investment project in Vietnam to pay or swap for the acquisition of shares, contributed capital, or an investment project of an overseas economic organization. Such swaps must ensure compliance with certain principles outlined in Article 6.4 of Decree 103. For instance, the swap transaction must be evaluated in accordance with market principles and must not be exploited for tax evasion, transfer of pricing, or money laundering purposes. Besides, if the foreign partner receives swapped shares in Vietnam, strict compliance with regulations on foreign investment into Vietnam is also mandatory.
Obligation to repatriate profits: Unless the investor intends to retain profits for reinvestment in outward investment activities, in all other cases, the investor is strictly required to repatriate all derived profits and other incomes from the overseas investment activities to Vietnam within 12 months from the date the profits are distributed. This time limit may be extended, but by no more than an additional 12 months, and the investor must provide prior written notification of this extension to the Ministry of Finance and the State Bank of Vietnam. Failure to fully repatriate profits upon expiration of the time limit without notifying the state management agencies as prescribed may subject the investor to administrative penalties.