Forms of foreign indirect investment in Vietnam

Foreign indirect investment in Vietnam opens up many attractive opportunities for international investors who want to exploit the growth potential of emerging economies. Through forms such as buying shares, securities, bonds or contributing capital to investment funds, foreign investors not only can access the vibrant market but also minimize risks compared to direct investment. This creates flexibility and high profitability, while contributing to promoting Vietnam’s sustainable development.

Subjects eligible for indirect investment from foreign countries into Vietnam

According to the provisions of Article 2 of Circular 05/2014/TT-NHNN, objects of foreign indirect investment include:

• Non-resident foreign investors making indirect investments in Vietnam are individuals or organizations that do not reside in Vietnam but participate in the financial market through purchasing stocks and bonds of Vietnamese enterprises.
• Organizations and individuals involved in foreign indirect investment in Vietnam include securities companies, banks, investment funds and financial institutions supporting foreign investors.

This foreign indirect investment does not include investors residing in Vietnam, who are foreign individuals or organizations that have settled or established in Vietnam.

Current forms of foreign indirect investment in Vietnam

According to Article 5 of Circular 05/2014/TT-NHNN and Circular 06/2019/TT-NHNN, foreign investors can choose diverse forms of indirect investment to participate in the Vietnamese market:

• Contributing capital, buying and selling shares: Investors can contribute capital or buy and sell shares in unlisted or listed enterprises on the Vietnam Stock Exchange. However, the ownership ratio may be limited depending on the regulations for each industry.
• Buy and sell bonds and other securities: On the Vietnamese stock market, investors can buy and sell bonds, stocks and other securities, complying with legal regulations on securities.
• Investment entrustment through a fund management company or securities company: Indirect investment can be made through investment entrustment, creating conditions for foreign investors to access the Vietnamese market without participating directly.
• Contributing capital to investment funds and fund management companies: Foreign investors can also contribute capital and transfer capital in investment funds or fund management companies according to securities laws.

These forms help diversify investment channels, creating conditions for foreign investors to participate in the Vietnamese market flexibly and effectively.

Principles of foreign indirect investment in Vietnam

Principles when making indirect investments are clearly specified in Article 4 of Circular 05/2014/TT-NHNN, to ensure transparency, legal compliance and financial stability in Vietnam. The principles include:

• All indirect investment activities of foreign investors in Vietnam must be carried out in Vietnamese Dong and through an indirect investment capital account opened at a licensed bank.
• Foreign investors must comply with the provisions of this Circular, the Law on Securities and legal documents related to capital contribution, share purchase, and operations on the Vietnamese stock market.
• The balance on the indirect investment capital account cannot be transferred to term deposits or savings at foreign credit institutions or banks.

These principles help protect investors’ interests, while ensuring transparency and safety for Vietnam’s financial market.

Consulting on forms of foreign indirect investment in Vietnam at Long Phan

Long Phan provides in-depth consulting services on forms of foreign indirect investment in Vietnam, helping customers access the market in accordance with regulations, ensuring safety and efficiency.

Long Phan’s services include:

• Consulting on indirect investment forms of foreign investors in Vietnam.
• Consulting on choosing the form of indirect investment suitable to the investor’s goals and strategies.
• Consulting on regulations related to capital contribution and share purchase by foreign investors in Vietnamese enterprises.
• Support customers in drafting necessary applications, documents, and contracts to carry out indirect investment activities.
• Consulting and supporting investors in negotiating and signing contracts related to indirect investment, including share purchase contracts, bonds, stock brokerage contracts, etc.
• Consulting on methods to resolve disputes related to indirect investment when they occur.

Long Phan’s consulting services help foreign investors save time, minimize risks and ensure compliance with Vietnamese law when investing indirectly. To receive advice on forms of foreign indirect investment in Vietnam, please contact Long Phan via the hotline 0906735386. We will provide safe and effective investment solutions, helping customers maximize investment benefits within the scope of law.