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The FDI approval hierarchy in Vietnam distinguishes between national-level and provincial-level investment projects based on scale, sector, and geographical scope. Provincial-level projects — which encompass the majority of foreign investments — are processed by the Department of Planning and Investment (DPI) in the province where the project is located. National-level projects, including those with capital exceeding VND 5,000 billion, those affecting multiple provinces, or those in sensitive sectors such as banking, aviation, and telecommunications, require approval by the National Assembly or the Prime Minister through the Ministry of Planning and Investment. Understanding which level of approval applies to a given project is essential for accurate timeline estimation and resource planning, as national-level approvals involve additional procedural layers and consultation requirements.
Investment incentive categories are governed by the Law on Investment 2020 and its implementing decrees, which establish a hierarchy of incentives based on project location, sector, scale, and technology content. The most significant incentives include corporate income tax (CIT) holidays of up to four years and reduced CIT rates of 10% for up to fifteen years for projects in encouraged sectors or disadvantaged locations. Land rent exemptions and reductions are available for projects in industrial zones, export processing zones, and specially designated economic zones. Import duty exemptions apply to machinery, equipment, and materials that cannot be domestically sourced. Eligibility for each incentive category requires specific documentation and compliance with performance conditions, including capital contribution schedules, implementation timelines, and operational benchmarks.
Land use rights for foreign investors are governed by the Land Law 2013 (as amended), which distinguishes between land allocated by the State, land leased with annual rent payments, and land leased with one-time rent payments for the entire lease term. Foreign-invested enterprises generally access land through lease arrangements with industrial zone management boards or provincial people's committees, as direct land allocation is restricted. Lease terms typically extend up to fifty years, with possible extensions in certain circumstances. The process of obtaining land use rights certificates involves multiple administrative steps, including land use planning approval, environmental impact assessment, and payment of land rent and related fees. We coordinate these steps to ensure that land use rights are secured in a manner consistent with the overall project timeline.
Technology transfer requirements apply to foreign investments involving the import of technology, know-how, or technical services into Vietnam. The Law on Technology Transfer 2017 establishes a framework for technology transfer contracts, including registration requirements with the Ministry of Science and Technology and restrictions on the transfer of certain categories of technology. Technology transfer agreements must comply with pricing regulations that limit royalties and technical service fees to reasonable percentages of net sales or other agreed bases. The law also imposes localisation requirements in certain sectors, mandating progressive transfer of technology to Vietnamese partners or employees. We advise on structuring technology transfer arrangements that comply with regulatory requirements while preserving the licensor's intellectual property rights and commercial interests.
Post-establishment compliance obligations represent an ongoing commitment that extends far beyond the initial licensing phase. Foreign-invested enterprises must satisfy periodic reporting requirements to the DPI, including annual investment progress reports and semi-annual operational reports. Tax compliance involves monthly VAT declarations, quarterly provisional CIT payments, annual tax finalisation, and statutory financial statement audits for certain categories of enterprise. Labour compliance requires registration of internal labour regulations, work permit applications for foreign employees, and social insurance contributions for all employees. Environmental compliance may include periodic environmental monitoring reports and renewal of environmental licences. We provide structured compliance programmes that organise these obligations into manageable workflows with clear deadlines and accountability.
Entry Strategy — We assess entry modes, sectoral opportunities, and regulatory requirements for your specific investment.
Incentive Negotiation — We maximize corporate income tax holidays, land rent exemptions, import duty preferences, and other incentives.
Regulatory Filing — We prepare and submit IRC applications and all supporting documentation with DPI and relevant authorities.
Ongoing Compliance — We conduct periodic compliance audits and manage government relations to maintain good standing.
FDI projects must comply with the Law on Investment 2020 and sector-specific regulations throughout their lifecycle. The Law on Investment introduced the negative list approach, which specifies sectors where foreign investment is prohibited or conditional. Projects in conditional sectors must satisfy additional requirements, including proof of financial capacity, professional qualifications, and technical standards.
Investment incentives vary by location, sector, and project scale and require proper documentation to secure and maintain. Incentives granted in the Investment Registration Certificate are legally binding, but their continued availability depends on the investor's compliance with the conditions specified in the certificate. Non-compliance with capital contribution schedules, implementation timelines, or operational conditions can result in revocation of incentives and potential claw-back of benefits already received.
Provincial investment promotion agencies have different capabilities and incentive packages that should be compared. While the national legal framework sets the baseline for incentives, provincial people's committees have discretion to offer additional benefits within their authority. The quality of administrative support, infrastructure, and logistics varies significantly across provinces and should be evaluated alongside the incentive package.
Reinvestment incentives may be available for expansion and additional project phases. Under the Law on Investment 2020, profits reinvested in encouraged sectors or disadvantaged locations within a specified period may qualify for CIT exemption or reduction on the reinvested amount. Claiming reinvestment incentives requires proper documentation of the reinvestment decision and the source of reinvested profits.
Periodic compliance audits help avoid penalties and maintain eligibility for ongoing incentives. The DPI and other regulatory agencies conduct inspections of foreign-invested enterprises to verify compliance with investment registration conditions, tax obligations, labour regulations, and environmental standards. Preparing for these inspections through periodic internal audits reduces the risk of adverse findings and penalties.
Foreign exchange management is a critical ongoing consideration for FDI enterprises. The State Bank of Vietnam regulates capital account transactions, profit repatriation, foreign currency borrowing, and cross-border service payments. Compliance with foreign exchange regulations requires maintaining proper documentation for all cross-border transactions and understanding the withholding tax implications of profit distributions, interest payments, and royalty remittances.
