You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

September 10, 2019

Vietnam Issues New Circular on Foreign Exchange Control of Foreign Direct Investment Activities

Subscribe to Updates

The State Bank of Vietnam on June 26, 2019, issued Circular No. 06/2019/TT-NHNN on foreign exchange control of foreign direct investment activities in Vietnam (Circular 06). On September 6, 2019, Circular 06 replaced Circular No. 19/2014/TT-NHNN on the same matter, while also amending Circular No. 05/2014/TT-NHNN on opening and using foreign indirect investment capital accounts and Circular 16/2014/TT-NHNN on the use of foreign currency and Vietnamese dong accounts for residents and non-residents. Below are some notable points of Circular 06.

Entities Subject to Requirements on Direct Investment Capital Accounts

Although the current Vietnamese investment law (the Law on Investment of 2014) abolished the term “foreign direct investment” (FDI), Circular 06 still uses this term for the purpose of opening direct investment capital accounts (DICA) in certain forms of foreign investment in Vietnam. In particular, Circular 06 requires the following FDI enterprises, as well as foreign investors (individuals and entities), to open and maintain a DICA:

FDI Enterprises

(i) Foreign-invested enterprises established in accordance with investment regulations and granted an Investment Registration Certificate;

(ii) Enterprises not falling into (i) but having foreign ownership of 51% or more of the charter capital, including:

  • Enterprises in which foreign investors have acquired shares or contributed capital;
  • Enterprises formed as a result of restructuring (i.e., merger, demerger, consolidation, or separation); and
  • Enterprises newly established in accordance with specialized legislation (e.g., credit institutions, insurance companies, law firms, etc.).

(iii) Enterprises established by foreign investors for the purpose of operating public-private partnership (PPP) projects in accordance with investment regulations.

Foreign Investors

(i) Foreign investors participating in business cooperation contracts (BCCs); and

(ii) Foreign investors engaging in PPP projects but not establishing project companies.

Under Circular 06, if a foreign investor owns 51% or more of the charter capital of a company (F1) by setting up F1 or acquiring shares in a local company, then F1 is required to open a DICA. However, even if F1 owns 51% or more of the charter capital of another company (F2), F2 is not required to open a DICA.

Clearer Guidance on Opening and Using DICAs

The FDI enterprises and foreign investors mentioned above are required to open a DICA in a foreign currency (and a DICA in VND if they wish to do so) at a licensed bank in Vietnam.

Foreign investors participating in more than one BCC or PPP project must open a DICA for each respective BCC or PPP project.

For foreign loans made in a foreign currency other than the currency of the DICA, FDI enterprises are allowed to open another “bank account for taking and paying foreign loans” in such foreign currency at the same bank at which the DICA was opened.

If changing the bank at which the DICA was opened, FDI enterprises and foreign investors must close the current DICA at the current bank after transferring the balance in the current DICA to the new DICA opened at the new bank.

Transactions Required to be Routed via DICA

The below transactions, among others, must be routed via DICA:

(a) Capital contributions in cash (i.e., bank transfers) made by foreign investors to the charter capital of the relevant FDI enterprise;

(b) Payments for capital transfer transactions between a local seller and a foreign purchaser;

(c) Payments for investment project transfer transactions in BCCs and PPP projects between a local seller and a foreign purchaser, and between a foreign seller and a foreign purchaser;

(d) Profit repatriation to foreign investors; and

(e) Transactions relating to foreign loans of FDI enterprises (i.e., loan drawdown and repayment).

It is important to note that under Circular 06, payments for capital transfer transactions in FDI enterprises between a foreign seller and a foreign purchaser, and between a local seller and a local purchaser, are not required to be routed via DICAs.

Transitional Provisions

Within 12 months from the effective date of Circular 06 (i.e., by September 6, 2020), FDI enterprises and foreign investors under the following circumstances must convert their bank accounts into the appropriate types:

(a) For FDI enterprises currently having foreign ownership of 51% or more but maintaining a foreign indirect investment capital account, they must open a DICA instead.

(b) Enterprises which currently maintain a DICA must close the DICA, and each foreign investor must open an indirect investment capital account in the following circumstances:

  • Local enterprises having foreign ownership of less than 51%;
  • [Local] enterprises not required to have an Investment Registration Certificate, but already holding one based on their discretionary request; and
  • FDI enterprises having shares listed or registered to be traded on a Vietnam stock exchange.

In case the above enterprises maintain their DICAs for transactions relating to foreign loans, they are allowed to continue maintaining the DICAs for this purpose.

For more details on Circular 06, please contact us at [email protected].

Related Professionals

Practices

Banking and Finance

Corporate/M&A

Location

RELATED INSIGHTS​ 

December 26, 2025
The Bank of Thailand (BOT) has released the Guidelines for Digital Fraud Management, which took effect on December 17, 2025, incorporating certain amendments to the draft guidelines issued in March 2025. These official guidelines aim for end-to-end digital fraud prevention, with a particular focus on mule accounts, to enhance trust and security in Thailand’s financial system. The guidelines apply to “financial service providers,” including: Financial institutions and special financial institutions under the Financial Institution Business Act; and Operators of Inter-institutional Fund Transfer System e-money services and e-fund transfer services under the Payment Systems Act. Besides commercial banks and e-money operators that offer fund-transfer services, other providers may adopt requirements based on risk proportionality and baseline standards set out in the guidelines (for instance, an e-money operator that does not offer e-fund transfer services could consider implementing a fraud monitoring and detection system according to the risk level of its service). The guidelines establish the following key requirements: Policy and oversight. Directors and senior executives of financial service providers must adopt appropriate “end-to-end” fraud management policies and KPIs to manage digital fraud, covering prevention, monitoring, detection, management, resolution, and support for affected customers. The fraud management policy must be regularly reviewed, and whenever there is a situation or change that significantly affects the efficiency of the fraud management. Any significant update to the policy must first be approved by the board of the financial service provider. The BOT also encourages providers to collaborate in establishing industry standards aligned with applicable laws and regulations to ensure consistency and best practices across the sector. Fraud management processes. Financial service providers must establish a clear framework for managing digital fraud throughout the customer lifecycle—from customer onboarding to service termination—covering at least the following processes: Know your customer (KYC) and customer due diligence (CDD):
Read More
December 19, 2025
Prior to the dissolution of the House of Representatives, Thailand’s cabinet approved a draft amendment to the Administrative Procedure Act, following review by the Council of State. If enacted, this reform will fundamentally change how state agencies process business applications and appeals by imposing enforceable timelines and legal consequences for inaction. The draft directly targets a longstanding commercial frustration: applications and appeals that vanish into administrative silence, stalling investment and foreclosing judicial review across sectors ranging from real estate and manufacturing to healthcare and finance. The “Silence Means Yes” Rule for Applications At the core of the reform is a new automatic “approval by implication” for applications subject to statutory processing deadlines. If an official fails to notify an applicant of a decision within the legally prescribed period, the application will be deemed approved as a matter of law. This presumption shifts the costs of delay from businesses to the bureaucracy and gives applicants a definitive legal position once time expires. The mechanism applies to routine licensing and registration matters governed by explicit consideration periods in existing statutes or ministerial regulations. Officials may extend the decision period by up to thirty days, but only if they notify the applicant before the original deadline and substantiate that the delay arises from genuinely exceptional circumstances beyond their control. Certain sensitive applications are expressly excluded from automatic approval, including those that may significantly affect national security or defense, public safety and health, the environment or natural resources, or national cultural heritage. Once the deadline passes without a decision, businesses can proceed with deployment of capital and operations—construction, hiring, procurement, and market entry—without waiting for formal permission that may never arrive. For time-sensitive projects, this materially reduces regulatory timing risk. The “Deemed Rejection” Rule for Appeals The draft introduces a parallel “deemed rejection”
Read More
December 15, 2025
Thailand is taking steps to energize its startup scene by drafting the Startup Promotion Law. This draft law aims to remove obstacles, open new funding opportunities, and provide coordinated government support. The goal is to make it easier for Thailand-based startups to grow and compete on a global stage. Why Is This Law Needed? For many years, Thai startups have operated under traditional company law frameworks that were not designed with high-growth businesses or with fundraising opportunities in mind. Restrictions on issuing bonds, offering shares to outside investors, and repurchasing shares for employee incentive programs made it challenging for emerging companies to access capital and accelerate their growth. The draft Startup Promotion Act seeks to remove these obstacles and foster a more competitive, entrepreneur-friendly environment in Thailand. Who’s in Charge? Two main organizations will oversee the startup ecosystem: Startup Promotion Committee: This group, to be appointed by the National Science, Research, and Innovation Policy Council, will set national strategies, policies, and budget; design promotional campaign and incentives; and propose further legislative amendments to promote startups. National Innovation Agency (NIA): Under the draft act, the NIA will be the main contact for startups and will serve as the secretariat office of the Startup Promotion Committee, coordinating data, advising startups, maintaining the public registry, and providing funding and investment (grants, repayable grants, loans, and equity) under committee criteria and, where applicable, cabinet approval. What Startups Are Eligible for Benefits? To be officially recognized and access benefits, a company must: Be a private limited company less than 10 years old at the time of application. Existing companies that already exceed the 10-year threshold may still apply for startup statues within one year of the law’s enactment, as long as they otherwise still qualify for the new regime. Have average annual revenue not
Read More
December 4, 2025
Thailand has expanded the circumstances under which state agencies may bypass competitive bidding procedures to address urgent security challenges. On November 28, 2025, Thailand’s Ministry of Finance published the Ministerial Regulation Determining Cases of Procurement by Specific Method (No. 6) B.E. 2568 in the Royal Gazette, introducing a new pathway for procuring supplies and services needed to address cyber and military threats that may affect the stability of government agencies or the nation. For technology vendors, cybersecurity firms, and defense contractors, this regulatory change creates immediate opportunities to engage directly with government buyers facing urgent security challenges. New Fast-Track Category for Security Threats The regulation amends Thailand’s Public Procurement and Supplies Management Act B.E. 2560 (2017) to add a new category of procurement that qualifies for the “specific method”—a noncompetitive, direct selection process. Previously, agencies could use this expedited method only in limited circumstances, such as emergencies, cases with proprietary technology requirements, or national security operations. The new provision explicitly covers procurement of supplies related to preventing or resolving cyber or military threats that could impact the stability of a state agency or the country. This addition recognizes the urgent nature of modern security challenges, where competitive bidding timelines may leave agencies vulnerable during critical threat windows. State agencies dealing with active cyberattacks, preparing defensive measures against anticipated threats, or responding to military security concerns can now move directly to negotiate with qualified vendors rather than conducting lengthy public tender processes. Vendor Considerations Vendors offering cybersecurity solutions now have a regulatory avenue to work directly with government clients when stability concerns are present. These solutions include threat detection systems, anti-ransomware tools, incident response services, firewalls, and security consulting. Similarly, defense contractors providing military equipment or specialized security supplies can pursue direct engagement channels where traditional procurement methods would create
Read More