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​ 

December 4, 2024
Thailand Legal Basics, a valuable primer for foreign investors, explores all aspects of living and doing business in Thailand. Written by specialists at Tilleke & Gibbins in Bangkok, it is the only comprehensive English-language guide to the Thai legal system with a focus on the concerns of foreign business and investment.
Read More
November 27, 2024
In Thailand, a business rehabilitation plan in court-supervised rehabilitation proceedings is a crucial element of the business rehabilitation process that outlines how a debtor’s assets will be managed. It also provides guidance for resolving a debtor’s business challenges so that the business can survive and continue to generate returns, increasing the likelihood that its creditors will be repaid. Key Plan Components The Bankruptcy Act B.E. 2483 sets forth the following components to be covered in a rehabilitation plan: The reasons for rehabilitation; Details about the debtor’s assets, liabilities, and other binding obligations at the time the court-ordered rehabilitation; Principles and methods of the rehabilitation; Redemption of collateral when there are secured creditors and guarantor liabilities; Ways to resolve problems arising from a temporary lack of liquidity during plan implementation; Action to be taken when a claim or debt is assigned; Name, qualifications, and letter of consent of the plan administrator, as well as information on compensation; Appointment and release of the plan administrator; Period in which the plan will be implemented (maximum of five years); and Refusal of the debtor’s assets or refusal of contractual rights if the debtor’s assets or contractual rights have obligations that exceed the benefits they yield. Considering the diverse nature and challenges of each debtor’s business, the details listed here are only general guidelines for what should be included in a rehabilitation plan. The planner has the flexibility to create a plan with different details or guidelines than those outlined above to best suit the nature and challenges of the debtor’s business. The planner can also omit some of the mentioned requirements if they are not relevant to the debtor’s business. Concerns of Relevance Court approval of the rehabilitation plan. Once the plan is approved by a meeting of the creditors, it is necessary
Read More
November 11, 2024
The Vietnamese government has demonstrated a strong commitment to building a digital government, digital economy, and digital society through its recently issued national strategy on digital infrastructure. Under Decision No. 1132/QD-TTg dated October 19, 2024, on “Digital Infrastructure Strategy to 2025 with Orientation to 2030,” the government will create supportive conditions for both domestic and international businesses to invest in digital infrastructure with cybersecurity as a priority. Recognized as vital to the economy, this digital infrastructure will consist of four main components: (i) telecommunications and internet infrastructure, (ii) data infrastructure, (iii) physical-digital infrastructure, and (iv) digital utility infrastructure, including digital technology as a service. Key goals for 2025 include universal fiber optic access for households, 100% 5G coverage across all provinces and cities, deployment of at least two new international undersea fiber optic cables, establishment of AI data centers, development of green-standard data centers, and platforms for IoT, AI, big data, blockchain, and cybersecurity. By 2030, goals include fiber access with speeds of at least 1 Gbps, 5G coverage for 99% of the population, readiness for 6G trials, six additional international undersea fiber optic cables, development of a hyperscale data center, and positioning Vietnam as a digital hub. To achieve these goals, the government has outlined some core tasks, creating significant opportunities for both foreign and domestic investors: Developing telecommunications and internet infrastructure for widespread fiber optic and 5G access, while preparing for emerging technologies like 6G, Open RAN, satellite, and IpV6. Telecommunication enterprises will jointly invest in and share the use of international fiber optic cable routes to ensure efficient capacity utilization and optimize investment capital. Attracting foreign and domestic investment to establish hyperscale data centers and cloud computing services that meet global standards. Creating physical-digital infrastructure by integrating technology across key sectors such as transportation, energy, healthcare,
Read More
October 24, 2024
On September 27, 2024, the Securities and Exchange Commission of Thailand (SEC) issued a circular clarifying reporting obligations in relation to listed company securities held by the company’s directors, executives, auditors, or persons related to them (“Key Persons”). The circular aimed to address growing concerns over transparency in shareholding, particularly when shares are used as loan collateral by company executives without sufficient public disclosure, which can lead to sudden share loss and executive departures, destabilizing the company. This circular is likely a stopgap measure, and a full overhaul of the reporting regulations may be needed. The current reporting obligations came into effect on March 16, 2024, and were designed to simplify reporting procedures while still maintaining transparency in the capital markets. The rules allow the Key Persons to consolidate multiple transactions and report them only when certain thresholds are crossed — such as when the total transaction value reaches THB 3 million or when six months have passed since the last report. The rules were intended to reduce the number of minor reports and limit penalties for missed deadlines. However, recent scandals have raised concerns about the reporting rules, particularly issues related to the enforcement of share collateral on executives’ or directors’ loans where the listed company may face a change of direction and management due to such forced sales. To ease these concerns, the SEC issued the new circular to reiterate the rules and lay out three key situations triggering a reporting duty: Force-Selling Due to Default: If shares are forcibly sold due to a loan default, this must be reported, and the transaction should be recorded with the Thailand Securities Depository (TSD). Transfer of Shares to Custodians: Under current rules, the transfer of shares to/from a custodian holding them on behalf of a beneficial owner does not
Read More