Approval of Foreign Investment in the form of a Joint Venture for Tobacco Product Manufacturing

The approval of foreign investment in the form of a joint venture for tobacco product manufacturing is a specific legal procedure under strict control by state management agencies. Foreign investors are mandatorily required to form joint ventures with licensed enterprises and ensure the State holds a controlling stake. This article by Long Phan Consulting Company details the conditions, dossier, and process under current regulations.

Conditions for Investment and Cooperation

Tobacco manufacturing is a conditional business line strictly managed to control supply and public health impacts. Pursuant to Article 25 of Decree 67/2013/ND-CP (amended by Clause 6, Article 3 of Decree 08/2018/ND-CP), participants must meet the following criteria:

1. Joint Venture Requirement: Investment must be based on a joint venture with an enterprise already holding a Tobacco Product Manufacturing License. The State must hold a controlling stake in the enterprise’s charter capital (in the case of joint venture investment).
2. Eligibility of Vietnamese Partner: The enterprise must have been manufacturing tobacco products before the issuance of Government Resolution No. 12/2000/NQ-CP (August 14, 2000) or have received approval in principle from the Prime Minister for merger/joint venture.
3. Raw Material Investment:
   • Enterprises must invest in tobacco cultivation (directly or via linkage with certified entities) suitable for their production scale.
   • Domestic raw materials must be used. Imports are allowed only if domestic supply is insufficient (within the MOIT annual quota), except for foreign-brand or export products.
4. Machinery & Equipment: Must possess specialized machinery for main stages: rolling and packaging.

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Competent Authority for Approval of Foreign Investment in the Form of a Joint Venture for Tobacco Product Manufacturing

According to the new regulation in Article 18 of Decree 146/2025/ND-CP, the decision-making authority has shifted from the Prime Minister to the Minister of Industry and Trade.

• Role of MOIT: The Minister of Industry and Trade is now the highest and sole authority to review and approve investment policies for tobacco manufacturing joint ventures. Tasks previously assigned to the Prime Minister under Decree 67/2013/ND-CP are now fully transferred to the MOIT.
• Direct Decision: The Minister directly assesses planning, financial capacity, technology, and joint venture conditions. If requirements are met, the Minister issues the written approval without submission to the Prime Minister.
• Local Authorities: The Department of Planning and Investment (DPI) or Management Boards of Industrial Zones do not have the authority to approve investment policies for this sector. They only issue Enterprise/Investment Registration Certificates after receiving MOIT approval.

Required Dossier Components

According to Point a, Clause 2, Article 25 of Decree 67/2013/ND-CP, the dossier submitted to the Ministry of Industry and Trade includes:

1. Request for Investment Approval: (Form No. 01, Circular 38/2025/TT-BTC) detailing project name, location, technical specs, scope, objectives, scale, output, efficiency, and machinery investment/replacement plans.
2. Project Dossier: Documents related to the establishment of the joint venture.
3. Joint Venture Contract: Agreement between parties.

>>> DOWNLOAD: REQUEST FOR INVESTMENT APPROVAL.

Procedural Sequence

Pursuant to Clause 2, Article 25 of Decree 67/2013/ND-CP, the procedure involves:

Step 1: Submission Joint venture parties submit the full dossier (Request, Project Dossier, Contract) to the Ministry of Industry and Trade (MOIT) directly or via post.

Step 2: Appraisal and Decision Within 30 working days of receiving a valid dossier, the MOIT evaluates legality, compliance with tobacco control regulations, and technical conditions.

• If approved, the Minister issues the decision.
• If refused, a written response with reasons is provided. (Note: Under previous regulations, MOIT would submit to the PM. Under new Decree 146/2025/ND-CP, MOIT decides directly).

Step 3: Upon receiving the approval, parties proceed to register the economic organization or adjust the Investment Registration Certificate at the local Investment Registration Agency (DPI) per the Law on Investment and Law on Enterprises.

Long Phan Consulting Services

Long Phan Consulting Company provides comprehensive legal solutions for this complex sector. Our services include:

1. Legal Structure Assessment: Verifying investor eligibility, state controlling stake requirements, and optimizing joint venture structures compliant with Decrees 67/2013/ND-CP and 08/2018/ND-CP.
2. Dossier Drafting: Preparing the Request for Approval, Feasibility Study, Joint Venture Contract, Charter, and technical explanation documents.
3. Representation: submitting dossiers to the MOIT, handling explanations, and supplementing documents as requested.
4. Post-Approval Support: Assisting with enterprise establishment, investment registration, and project implementation.

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Common Inquiries

100% Foreign-Owned Enterprises

No. Vietnamese law strictly requires foreign investment in tobacco manufacturing to be in the form of a joint venture with a licensed domestic enterprise. 100% foreign ownership is prohibited. (Legal Basis: Point b, Clause 1, Article 25, Decree 67/2013/ND-CP amended by Decree 08/2018/ND-CP).

“State Controlling Stake” Meaning

This means the State must hold over 50% of the enterprise’s charter capital, ensuring decision-making power in governance and strategy.

Main Objective of Joint Venture

The core objective is not mass production expansion but technological innovation, modern equipment investment, and product structure transformation to improve quality and reduce harm. (Legal Basis: Point b, Clause 1, Article 25, Decree 67/2013/ND-CP).

Authority of Local DPI

No. The authority lies with the Minister of Industry and Trade (previously Prime Minister). Local DPIs only process registration after central approval is granted.

Raw Material Investment Requirement Mandatory.

Enterprises must invest in tobacco cultivation (directly or via linkage). Buying solely from the market is insufficient. (Legal Basis: Point a Clause 2 Article 17 and Point d Clause 1 Article 25, Decree 67/2013/ND-CP amended by Decree 08/2018/ND-CP).

Conclusion

The approval of foreign investment in the form of a joint venture for tobacco product manufacturing demands rigorous preparation and absolute compliance. Long Phan Consulting Company is committed to supporting your sustainable development. Contact Hotline 1900.63.63.89 for expert assistance.

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