Introduction
Foreign ownership restrictions in Vietnam are among the key issues that investors should review before establishing a company, increasing capital, acquiring a capital contribution, or purchasing shares in a Vietnamese enterprise. The question is not only what percentage of capital a foreign investor may own. It also involves the target company’s actual business lines, whether it holds land in sensitive areas, and whether the transaction changes the company’s legal status for subsequent investment transactions.
In practice, many ordinary business sectors allow foreign investors to hold 100% of the capital. However, this ownership right cannot be determined solely from the business line stated on the Enterprise Registration Certificate. Investors need to compare the actual business activities against market access conditions, sector-specific legislation, and the post-transaction ownership structure.
1. There Is No Single Foreign Ownership Ratio for All Enterprises
Current investment legislation does not impose one fixed foreign ownership cap on all enterprises in Vietnam. The general principle is that foreign investors are granted market access on the same basis as domestic investors, except for business lines included in the list of sectors with restricted market access for foreign investors.
Therefore, the answer to the question of foreign ownership ratios in Vietnam always depends on the specific business line and transaction. An enterprise may permit 100% foreign ownership for ordinary manufacturing activities, but be subject to different conditions if it also conducts goods distribution, transport, education, telecommunications, logistics, real estate, financial services, or another conditional activity.
Market access conditions may take various forms and are not limited to foreign capital caps. Depending on the sector, an investor may be required to satisfy requirements relating to:
- The maximum foreign investor ownership ratio in charter capital;
- The permitted form of investment, such as a joint venture requirement or a prohibition on investment through a particular structure;
- The scope of business activities or the types of services that may be provided;
- Capacity, experience, sector-specific licences, or a Vietnamese partner;
- Other conditions under Vietnamese law or international treaties on investment.
2. When Can Foreign Investors Own 100% of the Capital?
In principle, foreign investors may own 100% of the capital in a Vietnamese enterprise where the proposed business lines are not included in the list of sectors with restricted market access for foreign investors and no sector-specific rules impose separate restrictions.
This is commonly seen in activities such as manufacturing, processing, software development, research and development, technical consulting, and certain trading or service activities outside restricted sectors. However, the assessment must be based on the specific activities involved, rather than broad descriptions such as “trading”, “technology”, or “services”.
For example, a software company may face no foreign ownership restriction in relation to programming activities. However, if the company operates an e-commerce platform, provides telecommunications services, exercises distribution rights over goods in restricted categories, or processes data in a specialised sector, the scope of review will be broader.
Japanese investors, as well as investors from countries or territories that have international investment treaties with Vietnam, should also verify the applicable treaty basis. In some cases, a treaty may provide a basis for more favourable market access conditions than domestic law. The choice of commitment basis should be considered consistently across all proposed business lines.
3. When Is Foreign Ownership Restricted?
Foreign ownership limits generally arise where an enterprise operates in sectors classified as not yet open to market access or subject to conditional market access for foreign investors. This list is published in Appendix I to Decree No. 96/2026/ND-CP.
For sectors not yet open to market access, foreign investors cannot invest in the relevant activity. For sectors subject to conditional market access, the foreign capital ratio in a Vietnamese enterprise may be restricted, or the investor may need to satisfy conditions concerning the investment form, business scope, partners, or licences.
Not every conditional business line should be understood as being subject to a foreign ownership cap. Two distinct layers of conditions should be separated:
- Market access conditions for foreign investors: These determine whether a foreign investor may invest, how much capital it may hold, and under which structure.
- Investment and business conditions: These determine what licences, personnel, facilities, statutory capital, or operating conditions an enterprise must have to conduct that business line.
An enterprise may be permitted to have 100% foreign ownership but still be required to obtain sector-specific licences before operating. Conversely, an enterprise that holds all required business licences may still be unable to accept foreign capital above the permitted threshold.
4. Foreign Ownership Is Not Only a Capital Issue; It Also Affects the Investment Structure
The above-50% ownership threshold has important practical implications, but it should not be assessed as a single standalone percentage. Under the Law on Investment, an economic organisation must satisfy investment conditions and procedures applicable to foreign investors where it falls within one of the statutory ownership structures, including where: a foreign investor holds more than 50% of its charter capital; an economic organisation falling within that category holds more than 50%; or foreign investors together with such an economic organisation hold more than 50% of its charter capital.
Accordingly, investors should not assess ratios such as 49%, 50%, or 51% solely from the perspective of voting rights or internal control. Both direct and indirect ownership structures should be reviewed, together with their legal implications for future plans to establish subsidiaries, acquire other businesses, invest in new projects, or undertake further investment activities.
This is particularly relevant for group structures. A Vietnamese company that falls within one of the cases specified in Clause 1, Article 20 of the Law on Investment may be required to apply investment conditions and procedures applicable to foreign investors when making further investments in another economic organisation or implementing another investment project. Ownership structuring at the outset may therefore materially affect the feasibility and timing of future expansion.
5. Matters to Check Before Making a Capital Contribution or Purchasing Shares
Before a foreign investor purchases shares in a Vietnamese company or acquires a capital contribution, the review should proceed from the business activities to the transaction structure. A practical checklist may include:
| Item to review | Practical significance |
|---|---|
| Registered business lines and actual operations | To determine whether there are sectors with restricted market access, sectors not yet open to market access, or sector-specific conditions. |
| Foreign ownership ratio before and after the transaction | To assess the foreign capital cap, whether the above-50% threshold will be crossed, and whether transaction registration is required. |
| Nationality and status of the purchaser | To identify any applicable international treaty or conditions applicable to a particular country or territory. |
| Existing licences, investment projects, and commitments | To check whether sector-specific licences, the Investment Registration Certificate, or project documents record conditions concerning investors, capital ratios, or operational objectives. |
| Land held by the target enterprise | To assess risks associated with land use rights on islands, in border areas, coastal areas, or other areas affecting national defence and security. |
| Status as a public or listed company | To conduct an additional review of limits and procedures under securities law, sector-specific regulations, and relevant information disclosure documents. |
The review should also cover “reserve” business lines that the enterprise has registered but has not yet operated. Even where such activities do not yet generate revenue, questions concerning market access conditions may still arise in practice during the authority’s review of a transaction dossier. In some cases, the enterprise may need to consider amending its registered business lines before carrying out the transaction, but this should not be regarded as an automatic solution where actual operations, licences, or investment projects remain connected to restricted business lines.
6. The Relationship Between Ownership Ratios and Transaction Registration Procedures
Not every capital contribution or share purchase by a foreign investor requires registration with the investment registration authority before changing members or shareholders. However, pre-transaction registration is required where the transaction falls within one of the following important cases:
- It increases the foreign investor’s ownership ratio in an enterprise conducting business lines subject to conditional market access for foreign investors;
- It causes a foreign investor or an economic organisation subject to conditions applicable to foreign investors to hold more than 50% of charter capital, including an increase from 50% or less to more than 50%, or a further increase where foreign ownership is already above 50%;
- The target enterprise holds a certificate of land use rights on an island, in a border area, a coastal area, or another area affecting national defence and security.
Where registration is required, the investor must obtain the outcome of the investment registration authority’s review before completing the change of members or shareholders under enterprise law. Therefore, the parties should not complete the transfer, pay the full transaction value, or submit the enterprise registration amendment dossier based on an assumed sequence before clearly determining whether investment registration is required.
From a contractual perspective, ownership ratio requirements and approval by the competent authority should be reflected in provisions on conditions precedent, completion timing, mechanisms for dealing with non-approval, and obligations to coordinate in providing documents. This helps reduce the risk that a signed transaction cannot be completed under the intended structure.
Summary
Foreign investors may own 100% of the capital in many sectors in Vietnam, but no single ownership ratio applies to every enterprise. The starting point is to determine whether the actual business activities fall within sectors with restricted market access for foreign investors. The investor should then review sector-specific restrictions, direct and indirect ownership structures, the post-transaction foreign ownership ratio, land-related factors, and the effect of the cases specified in Clause 1, Article 20 of the Law on Investment on future investment plans.
For capital contribution or share acquisition transactions, the question of whether pre-transaction registration is required should be determined before implementing enterprise amendment filings and payment arrangements.
Frequently Asked Questions
1) Can foreign investors always own 100% of a company in Vietnam?
No. Foreign investors may own 100% of the capital if the business line is not subject to restricted market access for foreign investors and there are no separate restrictions under sector-specific legislation or conditions applicable to the target enterprise.
2) Are conditional business lines always subject to foreign ownership limits?
No. Business conditions and market access conditions are different matters. A sector may require an operating licence while still allowing 100% foreign ownership; conversely, a sector may be subject to foreign ownership limits even where the enterprise has met its business conditions.
3) Must a foreign investor register the acquisition of 51% of a Vietnamese company?
Generally, the transaction must be registered before changing members or shareholders if the acquisition increases foreign ownership from 50% or less to more than 50%. However, the ownership structure, the target enterprise’s business lines, and its land status should also be reviewed.
4) Can an economic organisation that does not fall within Clause 1, Article 20 of the Law on Investment invest under the rules applicable to domestic investors?
In principle, an economic organisation that does not fall within the cases specified at Points a, b and c of Clause 1, Article 20 of the Law on Investment applies the investment conditions and procedures applicable to domestic investors when establishing another economic organisation, making capital contributions, purchasing shares or capital contributions, or investing under a BCC contract. Therefore, the assessment should not be based on a single foreign ownership percentage alone; both direct and indirect ownership structures should be reviewed.
5) Is it sufficient to review only the business lines stated on the Enterprise Registration Certificate?
No. Investors should review the registered business lines, activities actually conducted, sector-specific licences, investment project objectives, and actual business rights. Differences between registration records and actual operations may create risks when the competent authority reviews the transaction.
6) Do listed companies follow the same rules?
Listed or public companies must still consider market access conditions under investment law, but they must also comply with separate securities law requirements on foreign ownership ratios, transactions, and information disclosure. The assessment should be conducted under both sets of rules.
Conclusion
Foreign ownership limits should not be viewed as a fixed number. For each investment plan, the questions to answer are: what business does the enterprise actually conduct, under what structure may the investor access that business line, and does the transaction trigger a pre-transaction registration procedure? An early review helps investors avoid having to restructure ownership ratios or revise transaction documents at the completion stage.
How TT Collab Can Assist
TT Collab can assist foreign investors and FDI companies in reviewing market access conditions for specific business lines; assessing an appropriate foreign ownership ratio; checking registration requirements for capital contributions, share purchases, or acquisitions of capital contributions; and coordinating transaction documentation with relevant enterprise, investment, and licensing procedures.
Reference Legal Instruments
- Law on Investment No. 143/2025/QH15
- Decree No. 96/2026/ND-CP detailing and guiding the implementation of certain articles of the Law on Investment
Note: This article is intended to provide general information only and does not replace legal, tax, or investment advice for any specific case. Regulations and their application may change depending on the time, locality, business sector, and status of the enterprise.
