Skip to main content

Conditional & restricted business sectors for foreign investors in Vietnam (2024).

Posted in .
Conditional & restricted business sectors for foreign investors in vietnam (2024)

This guide covers conditions, restrictions and provisions regarding licenses and business lines placed on foreign invested entities in Vietnam. Market access conditions for foreign investors are the same as those for domestic investors under the Law on Investment 2020. That is, if no services are prohibited from the Vietnam’s specific commitments under any international treaty or international agreement that limits market access into Vietnam, foreign investors are permitted to invest in Vietnam in the form of commercial presence establishment if domestic investors are permitted to perform, provided that their services do not encompass (i) prohibited sectors or (ii) the Government’s Negative List for Market Access, which includes:

  • Prohibited business lines (comprises of twenty-five lines)
  • Restricted business lines (comprises of fifty-eight lines)

Therefore, foreign investors are permitted to invest into Vietnam if:

  • A service is uncommitted in a specific international treaty/agreement, but is permitted by Vietnamese national specialised laws and does not fall under (i) the prohibited sectors or (ii) the prohibited business lines list of the Vietnam Government’s Negative List for Market Access; or
  • A service is committed in a specific international treaty/agreement and does not fall under (i) the prohibited sectors or (ii) the prohibited business lines list of the Government’s Negative List for Market Access.

Please note that business lines may have specific additional sub-license requirements, and this should be considered when looking at market access requirements.

Detailed below are Part A – Prohibited Sectors, Part B – The Limitations on Market Access under Schedule of Specific Commitments in Services between Vietnam and WTO Members (WTO Commitments) and Part C – The Vietnam Government’s Negative List for Market Access.

A. Prohibited Sectors

According to Article 6 of Law on Investment 2020, the following activities in Vietnam are banned and the provision applies to both foreign and local companies. In particular, no company in Vietnam is permitted to perform:

  • Trading of narcotic substances
  • Trading of hazardous chemicals and minerals
  • Trading of specimens of wild flora and fauna
  • Prostitution
  • Human trafficking, trade in human tissues, corpses, human organs and human fetuses
  • Human cloning
  • Trading of firecrackers
  • Provision of debt collection services

B. Limitations on Market Access under WTO Commitments

Under the Schedule of Specific Commitments in Services between Vietnam and WTO Members (WTO Commitments), a wide range of the sectors and business lines which investors most often pursue when entering Vietnam allow 100% foreign ownership, and others have specific requirements on limitations for foreign investors. Based on practical experience together with legal provisions, below are general guidelines regarding certain key investment sectors in Vietnam.

In the context of the WTO Commitments to which Vietnam is part of, licensed activities can be broken down into four different categories for foreign investors seeking to enter Vietnam:

  • Committed: Foreign investors can own 100% of an enterprise according to the WTO Commitments
  • Restricted: Ownership limits exist for foreign investment and other specific restrictions may apply
  • Unspecified: The sector is not mentioned in the WTO Commitments detailing whether it is committed for foreign investors or uncommitted for foreign investors, therefore it will require Ministerial Approval and potentially additional licensing procedures and conditions
  • Uncommitted: The sector is mentioned in the WTO Commitments as uncommitted for foreign investors, requiring Ministerial Approval and potentially additional licensing procedures and conditions

Examples of Common Investment Sectors and Vietnam’s market access limitations for commercial presence:

ItemInvestment SectorsUnder the WTO Commitments
Status on market access for commercial presenceAdditional requirements and in practice
1.Management consultancy servicesCommitted 
2.General construction work for buildingsCommittedUncommitted for foreign individual investors.
Foreign investors must be from a country that is
a WTO Member
3.Building completion and finishing workCommittedUncommitted for foreign individual investors.
Foreign investors must be from a country that is
a WTO Member
4.Research and development services for
natural sciences
Committed 
5.Food and Beverage (Restaurant)CommittedThere may be a location evaluation before the restaurant is opened
6.Hospitality (Hotels, Motels, etc)CommittedThere may be a location evaluation, with the
opinion of the local People’s Committee going
with before the hotel/motel can be approved or
opened
7.TourismRestricted
  • Foreign investment: <100%
  • Investment in form of Joint Venture (JV) with
    a Vietnamese partner
8.Distribution services, including import and
export (except goods on the list of import
prohibition and distribution in accordance
to the provisions of Vietnamese laws or not
restricted in international commitments
under Treaties which Vietnam is a member)
CommittedCigarettes and cigars, books, newspapers and
magazines, video records on whatever medium,
precious metals and stones, pharmaceutical
products and drugs, explosives, processed oil and
crude oil, rice, cane and beet sugar are excluded
from the commitments
9.Advertising activitiesRestricted
  • Foreign investment: <100%
  • Investment form: JV with the Vietnamese
    partner who is licensed of advertising
    enterprise
10.Passenger
Transportation:
(except inland
transportation)
Maritime Passenger TransportationRestricted
  • Foreign investment: ≤ 49%
  • >operating a fleet under the national flag of
    Viet Nam JV
Internal waterway
Passenger Transportation
  • Foreign investment: ≤49%
  • >Investment form: JV with Vietnamese partner
Road Passenger
Transportation
  • Foreign investment: ≤49%
  • Investment form: Business Cooperation
    Contract (BCC) or JV with Vietnamese partner
  • >100% drivers in the company are Vietnamese
11.Manufacturing servicesUnspecifiedPer common practice from authorities, this
service is permitted for 100% foreign investment
There may be location evaluation before the
factory can be operated
12.Employment Services Activity (Counseling,
Supply and Recruitment)
Unspecified 
13.Human Resources Outsourcing ActivitiesUnspecified 
14.Secondary education servicesUncommitted 
15 Freight transportation Maritime freight
transportation less cabotage
Restricted In case of establishment of registered company for the purpose of operating a fleet under the national flag of Viet Nam: • Foreign investment: ≤49% • Investment form: JV with Vietnamese partner • Foreign seafarers may be permitted to work in ships under the national flag of Viet Nam owned by JV in Viet Nam but not exceeding 1/3 of total employees of the ships. The Master or first chief executive must be Vietnamese citizen
Committed To apply for foreign shipping companies only: • Foreign investment: 100% • Type of service: international maritime transportation
Internal waterways freight transportation Restricted • Foreign investment: ≤49% • Investment form: JV with Vietnamese partner
Road freight transportation Restricted Foreign investment: ≤ 51% (Subject to the needs of the market) • Investment form: JV or BCC with Vietnamese partner • 100% drivers in the company have to be Vietnamese
16.Container handling services, except services
provided at airports
Restricted
  • Foreign investment: ≤ 50%
  • Investment form: JV with Vietnamese partner
17.Storage and warehouse services (services
auxiliary to all modes of transport)
Committed 
18.Freight transport agency servicesCommitted 
19.E- commerce servicesUnspecified 
20.Computer and related services (e.g. System
analysis services, Data processing services,
Maintenance and repair services of office
machinery and equipment including
computers, etc.)
Committed 
21. Real Estate activities (including buying, selling,
renting, operating and managing residential/
non-residential buildings)
Unspecified 
22. Real Estate Services activity (Real estate
brokerage, Real estate trading floors, Real
estate counselling, Real Estate management)
Unspecified 
21. Architectural services (Advisory and pre-design
architectural services, Architectural design
services, Contract administration services etc.)
Committed 

Notes:

  •  This list is by no means complete, but shows common restrictions that exist.
  • The WTO Commitments is the most common agreement on which the licensing authorities in Vietnam rely. Foreign investors are permitted to refer to other international treaties/agreements/commitments to which Vietnam is a signatory
  • Foreign investors from countries that are not WTO members must apply the same conditions for market access by investors from countries that are WTO members, unless otherwise prescribed by the law of Vietnam or international treaties between Vietnam and those countries
  • Foreign investors that are regulated by an investment-related international treaty which prescribes more favorable conditions for market access than those prescribed by the law of Vietnam, the former may be applied.

C. The Vietnam Government’s Negative List for Market Access

Below are some specific business lines listed on the Negative List for Market Access. Please refer to the Decree 31/2021/ ND-CP dated 26 March 2021 of the Government regarding elaboration of some articles of the Law on Investment for the full list review purposes. Please note that:

  • Foreign investors must not invest in prohibited business lines specified in the List of Business Lines with Prohibited Market Access
  • For restricted business lines specified in the List of Business Lines with Restricted Market Access hereof, foreign investors must fulfill the conditions that are published in specific related regulations

Business Lines with Prohibited Market Access

  1. Trade in goods and services on the list of goods and services under state monopoly
  2. Press activities and collection of news in any shape or form
  3. Catching or harvesting marine life
  4. Investigation and public security services
  5. Administrative and judicial services, including judicial assessment services, bailiff services, property auction services, notary
    services, official receiver’s services
  6. Service of sending workers to work abroad under contract
  7. Investment in construction of cemeteries for transfer of land use right and infrastructure thereon
  8. Direct collection of garbage from households
  9. Public survey services
  10. Blasting services
  11. Manufacture, sale of weapons, explosive materials and combat gears
  12. Import, dismantlement of used seagoing ships
  13. Public postal services
  14. Merchanting trade of goods
  15. Temporary import for re-export of goods
  16. Collection, purchase, handling of public property at armed force units
  17. Industrial property representative services and intellectual property assessment services
  18. Travel services, except international travel services for inbound tourists

Business Lines with Restricted Market Access

  1. Manufacture and distribution of media products, including video recordings
  2. Manufacture, distribution, broadcasting of TV programs, stage performances and cinematic works
  3. Provision of audio and television broadcasting services
  4. Insurance; banking, securities trading and relevant services
  5. Postal and telecommunications services
  6. Advertising services
  7. Printing and publishing services
  8. Education services
  9. Survey, extraction and processing of natural resources, minerals, and petroleum
  10. Hydropower, offshore wind power and nuclear power
  11. Transport of goods and passengers by rail, air, road, river, sea, pipeline
  12. Betting and casino business
  13. Guard services
  14. Construction, operation and management of river ports, seaports and airports
  15. Real estate business
  16. Veterinary services
  17. Trade in goods and activities directly related to trade in goods of foreign service providers in Vietnam
  18. Technical analysis and inspection services
  19. Tourism services
  20. Health and social services
  21. Sports and entertainment services
  22. Paper production
  23. Manufacture of vehicles with more than 29 seats
  24. Development and operation of traditional markets
  25. Operation of Goods Exchanges
  26. Trade in goods and activities directly related to trade in goods of foreign service providers in Vietnam
  27. Technical analysis and inspection services
  28. Tourism services
  29. Audit, accounting and tax services
  30. Valuation services; valuation of enterprises serving equitisation
  31. Commercial arbitration services, arbitration mediation services
  32. Logistics services
  33. Coastal transport services
  34. Manufacture of building materials
  35. Motorcycle assembly
  36. Representation, recruitment, scheduling, management services for artists and athletes.
  37. E-commerce activities

Before investors can undertake the approved business activities, companies may be required to apply for
specific sub-licenses or other types of licensing provisions as required by law for conditional sectors.

Default placeholder image 76869528

Download a free PDF version of this guide

The PDF version contains all of the content and resources found in the web-based guide.

Updated on July 8, 2024
Download archive

View previous versions of
our guide:

Need business support in Vietnam?

Get in touch with us to take the next step towards starting and managing your business in Vietnam.