The document summarizes key points from Decree No. 118/2015/ND-CP issued by the Vietnamese government guiding foreign investment law. It outlines new procedures where foreign investors can apply for an investment registration certificate and business registration certificate simultaneously. It also defines investment conditions for foreign investors, including ownership limits and sector restrictions. The decree recognizes precedent where earlier approved foreign investments in uncommitted sectors will not require further ministry approval. It details new deposit requirements for securing investment projects and acquisition registration requirements when foreign ownership in a Vietnamese company reaches certain thresholds.

1. Lawyer in Vietnam Oliver Massmann New Decree guiding the Law on
Investment What you must know:
On 12 November 2015, after months of delay, the Government has finally issued Decree No.
118/2015/ND-CP (“New Decree”) on detailing and guiding the implementation of certain provisions
of the Law on Investment.
Set out below are major worth-noting points in this New Decree:
Investment conditions for foreign investors
Investment conditions for foreign investors are defined as conditions that foreign investors must
satisfy when investing in conditional business sectors applicable for foreign investors pursuant to
Vietnam‟s laws, ordinances, decrees and international treaties on investment.
These conditions include:
- Conditions on foreign ownership of charter capital in an economic organization;
- Conditions on investment form;
- Conditions on scope of investment activities;
- Conditions on a Vietnamese partner participating in investment activities; and
- Other conditions pursuant to laws, ordinances, decrees and international treaties on
investment.
The above conditions must be satisfied when foreign investors:
- Making investment to establish an economic organization;
- Contributing capital, purchasing shares, capital contribution portion in an economic
organization;
- Investing in the form of business cooperation contract;
- Receiving investment projects transferred from another investor or other cases of receiving
transferred investment projects; or
- Amending or supplementing investment business lines or sectors of foreign invested
economic organizations.
Conditional business sectors applicable for foreign investors as well as the corresponding conditions
are not included in the New Decree but will be published on the National information gate on foreign
investment. For business sectors whose conditions are not specified anywhere in Vietnam‟s WTO
Commitments and other international treaties on investment or not yet committed (“Uncommitted
Sectors”), the investment registration authority must seek approval of the Ministry of Planning and
Investment and other specialized ministries on the foreign investment.
It is worth noting that the New Decree recognizes „licensing precedent‟, meaning where foreign
investment in Uncommitted Sectors has been approved and such Uncommitted Sectors have been
published on the National information gate on foreign investment, any later foreign investors making
investment in the same Uncommitted Sectors will no longer need the approval of the specialized
managing ministry.
Licensing procedures on investment registration and enterprise registration by foreign investors
Instead of go through 2 different steps, namely (1) applying for issuance of an Investment
Registration Certificate; and (2) applying for issuance of an Enterprise Registration Certificate when
establishing an enterprise in Vietnam, foreign investors now can apply for these two certificates at the
same time. Specifically:
- Foreign investors submit the applications for issuance of an Investment Registration
Certificate and an Enterprise Registration Certificate to the investment registration authority;
- Within 01 working day from the receipt of the applications, the investment registration
authority sends the application for enterprise establishment registration to the Business

2. Registration authority for review and notifying the investment registration authority of its
decision;
- If there is any request for amendments or supplements to either the application for investment
registration or enterprise establishment, the investment registration authority will provide the
investors a single response within 5 working days from the receipt of the applications.
The coordination regime between the investment registration authority and the business registration
authority will be detailed by the Ministry of Planning and Investment later.
Securing the implementation of an investment project
Investors that are granted, or leased land by the Government, or allowed by the Government to change
the land use purpose, with certain exceptions, must make a deposit from 1-3% of the total investment
capital recorded in a document approving the investment plan or in the Investment Registration
Certificate based on a progressive basis, in particular:
- For capital part of up to VND300 billion, the deposit rate is 3%;
- For capital part from VND300 billion to VND1,000 billion, the deposit rate is 2%;
- For capital part from VND1,000 billion, the deposit rate is 1%.
M&A procedures
There is explicitly no requirement of application for Investment Registration Certificate in
acquisitions of target companies by foreign investors.
However, foreign investors must register its acquisition of the target company if:
- They contribute capital to, purchase shares or capital contribution portion of an economic
organization doing business in conditional sectors which are applicable for foreign investors;
- The capital contribution, shares and capital contribution portion result in F1, F2 and F2‟
mentioned in the graph above holding 51% or more of the target company:
o Increasing foreign ownership rate from below 51% to more than 51%; and
o Increasing the existing foreign ownership rate of 51% to a higher ownership rate.
After completion of the acquisition, the target company must carry out procedures to change its
members or shareholders at the business registration authority.
For investment of foreign investors other than F1, F2 and F2‟, the target company only needs to carry
out procedures to change its members or shareholders at the business registration authority without
the foreign investors having to register the acquisition transaction with the investment authority.
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3. Please do not hesitate to contact Oliver Massmann under omassmann@duanemorris.com if you have
any questions or want to know more details on the above. Oliver Massmann is the General Director of
Duane Morris Vietnam LLC.