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

June 30, 2025

Vietnam’s New Foreign Indirect Investment Regulations Explained

Subscribe to Updates

On April 29, 2025, the State Bank of Vietnam (SBV) issued Circular No. 03/2025/TT-NHNN (Circular 03), which provides detailed guidance on the opening and use of Vietnamese dong (VND) accounts by non-resident foreign investors engaging in indirect investment activities in Vietnam. Circular 03, which took effect on June 16, 2025, amends Circular No. 06/2019/TT-NHNN of the SBV on the management of foreign exchange for foreign direct investment activities in Vietnam (Circular 06) and replaces Circular No. 05/2014/TT-NHNN of the SBV guiding the opening and use of indirect investment capital accounts for implementation of foreign indirect investment activities in Vietnam (Circular 05).

Below are some of the key points of Circular 03.

Change of Account Name

Circular 03 renames “indirect investment capital account” to “indirect investment account” (IIA). This change aligns with the terminology used in other legislation, ensuring consistency across Vietnam’s legal framework governing foreign exchange and investment activities. Additionally, by removing the word “capital,” the new term better encompasses the full range of transactions that may be conducted through these accounts, such as share transfer and other forms of indirect investment-related activities. This helps prevent misinterpretation and facilitates compliance for foreign investors operating in Vietnam.

Account Types

Circular 03 clearly delineates account types and investor residency status as follows:

  • For non-resident foreign investors: The opening and use of investment accounts in VND is for carrying out transactions related to indirect investment activities.
  • For resident foreign investors: Credit and debit transactions are made through payment accounts in VND in accordance with relevant laws.

Additional Permitted Uses of IIAs

In addition to the cash inflows and outflows authorized under Circular 05, Circular 03 introduces more cash transactions that can be conducted via IIAs. These include:

  • Receiving interest and other legal income when conducting stock purchase transactions that do not require sufficient funds when placing orders by foreign institutional investors under the securities law.
  • Receiving funds for deposits or collateral related to stock purchases, as well as refunds of such deposits.
  • Receiving transfers from previously opened IIAs at other licensed banks.
  • Payment of losses and other expenses incurred from purchasing securities that do not require sufficient funds when placing orders by foreign institutional investors.
  • Payment of fees, charges, taxes, administrative penalties, and other expenses associated with foreign indirect investment activities in Vietnam.

These changes aim to improve transparency for foreign investors by clearly defining the purposes of money transfer orders, as well as enable authorized banks to verify, document, and process transactions more effectively.

Fixing Mismatch

Circular 03 updates Circular 06 to align with the foreign ownership thresholds provided in the current Law on Investment. Specifically, it changes references from “51% or more” to “more than 50%,” and from “below 51%” to “equal to or below 50%,” fixing a mismatch in the classification of foreign ownership thresholds.

Additionally, Circular 03 introduces a 12-month transitional period from its effective date (i.e., by June 16, 2026), allowing companies previously exempt under Circular 06 time to open a Direct Investment Capital Account (DICA). During this period, foreign investors may continue using their existing IIAs to carry out capital contributions and share acquisition transactions until the new DICA is officially opened.

Simplified IIA Opening Procedures

Under the prevailing law, documents issued in foreign countries must be legalized for use in Vietnam. However, Circular 03 removes this legalization requirement for documents submitted by foreign investors to open IIAs for investment in the Vietnamese securities market, allowing them to submit notarized and certified documents under Vietnamese law or foreign law within 12 months of the submission date of the IIA opening application.

The translation of foreign-language documents into Vietnamese is also no longer required, but is subject to mutual agreement between licensed banks and foreign investors. However, licensed banks must ensure the accuracy and compliance with Circular 03 of foreign-language documents, and provide certified or notarized translations if requested by the competent authorities.

These reforms aim to streamline the administrative process and shorten the timeline for the document preparation of foreign investors to open IIAs.

Opening Multiple IIAs

Under Circular 05, foreign investors were only allowed to open one IIA for their indirect investment activities. This could cause difficulties for foreign investors (especially investment funds or organizations managed by many fund management companies) to separately manage their investment portfolios.

To address this issue, Circular 03 permits multiple IIAs to be opened by foreign investors corresponding to the different issued securities trading codes, subject to regulatory conditions and applicable to the following subjects:

  • Foreign securities companies;
  • Foreign investment funds;
  • Foreign organizations managed by many foreign fund management companies; and
  • Investment organizations under foreign governments, or financial or investment organizations under an international financial organization of which Vietnam is a member.

These amendments will facilitate foreign investors in monitoring and managing their investment portfolios on the Vietnamese stock market.

Other Changes

Circular 03 adds the following new principles:

  • Opening a joint IIA by two or more foreign holders is not
  • All money transfer orders related to foreign indirect investment in Vietnam must specify the purpose of the transfer. This requirement enables commercial banks to verify, compare, and retain relevant documentation, thereby ensuring proper execution of the transaction in accordance with regulatory guidelines.

Circular 03 also removes the list of indirect investment forms in Vietnam (e.g., capital contribution and acquisition, bonds or other securities trading, etc.) that was specified in Circular 05.

Outlook

Circular 03 aims to significantly modernize Vietnam’s foreign exchange management, address evolving challenges in foreign indirect investment, and promote the country’s appeal to foreign investors. This is expected to be a catalyst for further reforms in Vietnam’s financial and investment sectors.

Related Professionals

Practices

Banking and Finance

Corporate/M&A

Location

RELATED INSIGHTS​ 

January 5, 2026
Resolution No. 222/2025/QH15 dated June 27, 2025, of the National Assembly of Vietnam (the “IFC Resolution” – see our previous article) set out the foundational legal framework for the establishment and development of Vietnam’s first-ever International Financial Centers (IFC). In furtherance of this framework, on December 18, 2025, the government of Vietnam issued eight implementing decrees to provide detailed regulatory guidance and to operationalize the IFC Resolution in practice. The Eight Implementing Decrees: An Integrated Regulatory Ecosystem The new decrees governing the IFC include the following: Decree No. 323/2025/ND-CP on the establishment of the IFC. Decree No. 324/2025/ND-CP on financial policies applicable within the IFC. Decree No. 325/2025/ND-CP on labor, employment, and social security within the IFC. Decree No. 326/2025/ND-CP on land and environmental matters within the IFC. Decree No. 327/2025/ND-CP on entry, exit, and residence of foreign nationals in the IFC. Decree No. 328/2025/ND-CP on the International Arbitration Center of the IFC. Decree No. 329/2025/ND-CP on banking licensing, foreign exchange management, and anti-money laundering and combating the financing of terrorism (AML/CFT) within the IFC. Decree No. 330/2025/ND-CP on the establishment and operation of commodity exchanges within the IFC. Taken as a whole, these eight decrees translate the IFC Resolution into a coherent and fully operational legal regime governing the establishment, organization, and functioning of Vietnam’s IFC. Collectively, they demonstrate that Vietnam’s IFC framework is best understood not as a collection of isolated incentives, but as a deliberately designed and integrated regulatory system. The Legal Architecture of the IFC: Four Interlocking Pillars Read together, the decrees seem to be designed to address four core regulatory questions from the outset: (i) what the IFC is, from a legal and institutional perspective; (ii) who may participate in the IFC and what activities are permitted; (iii) how people, capital, and projects operate
Read More
December 30, 2025
On December 17, 2025, Laos’ Ministry of Industry and Commerce (MOIC) issued a notice introducing a new digital system that allows e-commerce businesses to obtain required certificates and licenses through an online, application-based platform. Notice No. 3988, which will take effect on February 1, 2026, introduces the E-Trust platform, a downloadable application that allows e-commerce businesses to remotely obtain acknowledgement certificates and business operating licenses. New Digital Registration Options Under the previous framework established by the Decree on E-commerce (2021), businesses were required to complete registration exclusively through paper-based submissions. The new system now offers businesses two registration options: Traditional paper-based process at the Division of E-commerce Management within the MOIC; or Electronic registration and renewal through the E-Trust platform. This change is expected to streamline procedures, reduce administrative burdens, and enhance accessibility for businesses operating outside Vientiane. The E-Trust platform facilitates compliance for both individuals and legal entities required to submit applications and renewals for required certificates and licenses. The development is particularly beneficial for businesses located in remote provinces, as it eliminates the need for physical travel and significantly accelerates processing times. Compliance Requirements and Penalties Businesses must obtain or renew the required certificates and licenses to avoid sanctions under the Decision on Fines and Other Measures for Violation of the Decree and Regulations on E-commerce (No. 2828/MOIC, dated November 11, 2025). Penalties for noncompliance may include monetary fines and other enforcement measures.
Read More
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