Surveying the Vietnamese market: legal barriers foreign investors should know

Vietnam is an attractive FDI destination, but “arriving” differs from “operating”. Before committing capital, foreign investors should identify six groups of legal barriers when surveying the market — from sector access, land and sub-licences to ongoing compliance — updated to October 2026.

1. Sector market-access barriers

The first and highest barrier: does the planned sector admit foreign investors at all?

• 23 sectors not yet open to market access (Section A, Appendix I of Decree 96/2026/ND-CP, effective 31 March 2026): press, marine fishing, investigation-security services, judicial administration services, public postal services, transshipment/temporary import for re-export… — foreign investors may not invest in any form.
• Conditionally accessible sectors (Article 8 of the Law on Investment 2025): foreign-ownership caps under WTO/FTA commitments and sectoral laws; limits on investment form and scope.
• Absolutely prohibited sectors (Article 6): narcotics, firecrackers, debt-collection services, e-cigarettes/heated tobacco…

Common mistake: seeing a sector “open” on paper without checking the specific ownership cap — some services still limit foreign capital ratios, forcing the joint-venture route.

2. Land barriers

• No land ownership: land belongs to the entire people under unified State management — foreign investors may only lease land or obtain land-use rights within statutory limits.
• Scarce clean land banks: in many localities, ready-to-lease industrial/service land is dwindling; site clearance drags on and easily generates complaints that delay projects.
• Opaque planning: land-use planning information is sometimes incompletely published or not timely updated — making feasibility assessment difficult.
• Unsynchronised infrastructure: transport, power, water and logistics at some industrial parks outside key economic regions remain limited; high logistics costs hurt operating efficiency.

3. “Sub-licence” barriers

Obtaining the IRC and ERC does not mean immediate business. Each sector has its own specialised licences:

• Retail/distribution: goods-trading business licence + retail-outlet establishment licence. From 18 October 2026, Decree 342/2026/ND-CP takes effect: licensing authority rests with the provincial People’s Committee; the financial-plan requirement is removed but a 5-year business-plan explanation is still required; market-access conditions must be maintained throughout operations.
• Manufacturing: EIA/environmental registration, construction permits, fire-safety appraisal.
• F&B, education, healthcare: food safety, education/medical-practice licences…

Discovering a missing licence after leasing premises and hiring staff costs far more than screening upfront.

4. Administrative-procedure barriers

• Bilingual dossiers, consular legalisation: all foreign-issued documents must be consular-legalised and translated into Vietnamese with notarisation — taking 2-6 weeks if not prepared early.
• Multi-agency coordination: investment registration, business registration, tax, land and sectoral agencies — each with its own process and forms.
• Representatives, seals, capital accounts: opening the direct investment capital account and contributing capital on schedule through the prescribed account.

5. Ongoing-compliance barriers

Many investors “breathe easy” after licensing — but Vietnamese law demands continuous compliance:

• Periodic reporting (Article 47 of the Law on Investment 2025): quarterly and annually to the investment registration agency and statistics office on implemented capital, labour, budget contributions, environment…
• Mandatory annual audits for FDI enterprises; timely financial statements.
• Maintaining conditions: market-access and incentive conditions must be maintained — breaches can lead to project termination (Article 36).
• Tax and transfer pricing: timely filing and finalisation; associated enterprises must prepare related-party transaction documentation.

6. Legal-change barriers

Vietnam’s legal framework is in a phase of intense updating: the Law on Investment 2025 (effective 1 March 2026), Decree 96/2026, Decree 342/2026, the new Construction Law (effective 1 July 2026)… The law provides grandfathering for operating investors when rules change (Article 12 of the Law on Investment 2025; Article 17 of Decree 96/2026), but with limits: new legal entities, new projects, project acquisitions or added business lines must meet the new conditions.

7. Recommended market-survey roadmap

1. Weeks 1-2: sector screening (4 layers: prohibition, market access, business conditions, additional conditions).
2. Weeks 3-4: location survey: land bank, planning, infrastructure, local incentives.
3. Month 2: compile the full licence inventory; estimate compliance cost + timelines.
4. Month 3: prepare dossiers (consular legalisation, translation); negotiate location/partners.
5. Ongoing: monitor legal changes affecting your sector.

For accompanied market surveys and legal-barrier assessments before committing capital, investors may contact us. See more in our Foreign Investment section.

Prepared and reviewed by the FLAW AI Legal Council — now submitted to the owner for approval prior to publication. This content is for reference only and does not constitute legal advice for any specific case.