“Attracting foreign investors to participate in business investment activities in Vietnam is always interesting, and there are mechanisms and policies to ensure that their investment activities take place smoothly. Within the scope of this article, we will only mention some policies to ensure investment with foreign investors being applied.”

Assurance of the property ownership

Foreign investors are guaranteed property ownership rights when conducting business investment activities in Vietnam. The legal assets of foreign investors are not nationalized or confiscated by administrative measures.

In case the State of Vietnam expropriates or requisitions property for reasons of national defense and security or in the national interest, in a state of emergency, for prevention and control of natural disasters, foreign investors shall be paid and compensated by regulations of law on asset expropriation or requisition and other relevant laws. As such, foreign investors also enjoy the same guarantees of property ownership as domestic investors. This content has been codified in Article 10 of the Investment Law 2020, creating a clear mechanism to ensure the ownership rights of foreign investors.

Assurance of the right to offshore transfer assets

For assets being investment capital, investment liquidations, income from business investment activities, money, and other assets legally owned by foreign investors shall be entitled to offshore transfer if such foreign investors have fully fulfilled their financial obligations to the State of Vietnam in accordance with relevant laws. It is considered an important assurance for foreign investors to attract investment by the State of Vietnam.

Fair treatment

Foreign investors are treated equally to Vietnamese investors, freedom to choose business lines that are not prohibited by Vietnamese law is an assurance of the State of Vietnam in investment activities.

This policy of ensuring equal treatment is recorded in Article 5 of the Law on Investment 2020 and in the Ordinance on Most Favored Nation Treatment and National Treatment in International Commerce 2002.

However, please note that, in necessary cases such as to ensure national defense and security interests, to protect the cultural and spiritual values of the nation, to protect human health, to protect wildlife, animals, plants, and the environment, preventing fraudulent trade, this principle of equal treatment shall not be applied. In addition, in the case of Vietnam and countries in which foreign investors are nationalities have international treaties that record agreements related to business investment activities, foreign investors from such countries shall apply under the agreements in those international treaties.

Interests’ assurance on the law variation

If new legal documents stipulate a new level of investment incentives higher than the level currently being enjoyed by foreign investors, such foreign investors shall be entitled to enjoy the new level of incentives for the remaining period of the project, except for the following cases:  an investment project has been granted an investment certificate, an investment registration certificate or an investment policy decision before January 1, 2021.

If new legal documents stipulate a new level of investment incentives lower than the current level of incentives enjoyed by foreign investors, such foreign investors shall be entitled to continue enjoying the current preferential rate for the rest of the time of the project, except for changing provisions of legal documents is for reasons of national defense, national security, social order and safety, social ethics, community health, and environmental protection. However, in this case, such foreign investors shall be considered for compensation in one of the following measures:

  • Deduct direct losses from taxable income
  • Adjusting the operational objectives of the investment project
  • Other support to help foreign investors overcome damages

Please note that these measures are only applied when requested in writing by foreign investors within 3 (three) years from the effective date of such new legal documents.

Freedom to choose investment dispute resolution agencies

The State of Vietnam assures foreign investors the right to freely choose a jurisdiction to resolve disputes. Accordingly, foreign investors can choose one of the following jurisdictions:

  • Vietnam Court
  • Vietnamese arbitration
  • Foreign arbitration
  • International arbitration
  • Ad hoc arbitration established by agreement of the parties

In conclusion, to attract foreign investment and promote global economic integration, the State of Vietnam has made relevant policies to ensure the investment activities of foreign investors in Vietnam. It opens up prospects for the Vietnamese economy, as well as creates favorable conditions for the business expansion of foreign organizations and individuals.

The article is based on laws applicable at the time noted as above and may no longer be appropriate at the time the reader approaches this article as the applicable laws and the specific cases that the reader may wish to apply may have changed. Therefore, the article is for referencing only.


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