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 8, 2022
The rapidly growing middle class in Southeast Asia is bringing with it increased household wealth, increased consumption, and increased investment. As a result, the commercial banking sector has seen a boom in the more economically developed countries of the region—especially in Thailand. A select few foreign banks have also been very successful in Cambodia, Laos, Myanmar, and Vietnam for many years, but as other banks seek to replicate their Thai success in these new markets, the field looks likely to become much more crowded in coming years. Six major Thai banks are active in at least one other jurisdiction in mainland Southeast Asia, with some already operating across them all, and many larger international banks also beginning to take note. Amid that background, this guide examines the legal frameworks for foreign banks seeking to operate in these jurisdictions, and addresses some current and upcoming developments that investors should note. The full guide is available as a PDF through the button below.
Read More
November 14, 2022
On November 8, 2022, the Act Amending the Civil and Commercial Code B.E. 2565 (No. 23)—which Tilleke & Gibbins wrote about last month as the law was poised for enactment—was published in the Government Gazette, completing a lengthy process that had been under scrutiny for over two years. The act is expected to come into effect on February 6, 2023 (i.e., 90 days after the date of publication). New M&A Option The new amendments contain a number of important changes, but perhaps the most notable is the introduction of a new type of business combination. The Civil and Commercial Code (CCC) previously only allowed “amalgamation,” which is a consolidation of two or more companies resulting in the formation of a new entity, with all the amalgamating companies being dissolved. The amended CCC provides more options by introducing “merger” as another possible type of business combination. A merger occurs when two or more companies merge and one of the companies continues to exist while the others companies are dissolved. Like the newly created company in an amalgamation, the surviving entity in a merger assumes the property, liabilities, rights, obligations and responsibilities of all the dissolved entities. Some important considerations for the merger process (which also apply to amalgamations) are specified in the amended CCC as follows: Purchase of shares from dissenting shareholders. The amended CCC allows minority shareholders who disagree with the merger (or amalgamation) to sell their shares to the other existing shareholders at the agreed price. Alternatively, the price may be determined by an appointed valuer if the parties cannot reach an agreement on the purchase price. If the share purchase does not occur within 14 days of the offer date, the shareholder who rejects the offer will become a shareholder of the surviving (or newly created) company
Read More
November 3, 2022
On October 31, 2022, the Department of Trade in Myanmar’s Ministry of Commerce announced that payments for importation at the border are to be made via bank transaction. This announcement comes into force with Import/Export Newsletter No. 10/2022, dated October 31, 2022, issued by the Department of Trade, with the purpose of implementing a systematic payment system for import and export at the border, in accordance with a suggestion made by the Financial Action Task Force (FATF), an international financial watchdog. (This follows the recent news that the FATF has blacklisted Myanmar.) This requirement means that only bank transactions will be accepted for import payments in the border trade. Initially, this system will be applied to trade at the Myanmar-Thailand border only. The new requirement to pay for imports only via bank transaction states that export earnings and other types of foreign currency earnings (including salary and income remitted by Myanmar workers overseas) will be allowed to be used for imports. Importers are required to make the payments for import goods—using these earnings—via their banks. That is, Importers operating in the border trade must have foreign currency earnings received through official banking channels and must make import payments abroad through official banking channels using those earnings. In contrast to previous practices, they are unable to use other sources of income and are not able to make other payment arrangements that do not involve bank transactions. The procedures for importation at the Myanmar-Thailand border are as follows: Companies applying to the Department of Trade for an import license must produce credit advice and original bank statements that prove the receipt of export earnings or other earnings into their bank account. The Department of Trade will scrutinize the reported export earnings or other earnings, and approve the import license for an
Read More
October 31, 2022
On October 21, 2022, the Financial Action Task Force (FATF) added Myanmar to the list of high-risk jurisdictions having significant deficiencies to counter money laundering, terrorist financing, and financing of proliferation. The FATF is an international financial watchdog that aims to impede global money laundering and terrorist financing. It is a policymaking body that monitors implementation of FATF Recommendations and FATF Standards and is not binding as a supervisory authority for financial institutions. Myanmar will remain on the list of countries subject to a call for action until the country has implemented an action plan that: demonstrates an improved understanding of money laundering risks in key areas; demonstrates that onsite and offsite inspections are risk-based, and hundi (a type of informal remittance instrument for transferring money) operators are registered and supervised; demonstrates enhanced use of financial intelligence in law enforcement authorities’ investigations, and increasing operational analysis and dissemination by Myanmar’s Financial Intelligence Unit; ensures that money laundering is investigated and prosecuted in line with risks; demonstrates investigation of transnational money laundering cases with international cooperation; demonstrates an increase in the freezing, seizure, and confiscation of criminal proceeds, instrumentalities, and property of equivalent value; manages seized assets to preserve the value of seized goods until confiscation; and demonstrates implementation of targeted financial sanctions related to proliferation financing. Enhanced Customer Due Diligence Unlike other blacklisted countries, Myanmar is not applicable to countermeasures. Instead, the financial institutions of members and nonmember states of the FATF are urged to conduct “enhanced customer due diligence (CDD) measures” to mitigate the risk of money laundering, terrorist financing, and proliferation financing from Myanmar. Examples of these enhanced CDD measures to be applied to certain higher-risk activities include: Obtaining additional identifying information about the customer (available through public databases or internet sources) and regularly updating the identifying
Read More