Chinese Investment in Vietnam 2026: Which Sectors Are Open, Which Are Restricted

Chinese investment in Vietnam — sectors open in 2026 remains one of the most active inbound FDI stories in Southeast Asia, spanning electronics, textiles, furniture, logistics and energy. Yet before tax incentives or factory location enter the discussion, every Chinese investor must answer a threshold question: is my intended business line permitted in Vietnam, and am I subject to a foreign equity cap or a special approval procedure? The answer sits in three layers of Vietnamese law — and looks quite different from the Negative List (负面清单) investors know at home. This guide maps all three barriers and benchmarks them against how China regulates inbound investment, so project structuring starts from correct premises.

Table of contents

• 1. Context: why Chinese investors need their own sector map
• 2. Overview comparison: Vietnam vs China
• 3. Detailed analysis
• 4. Similarities worth noting
• 5. Common risks for Chinese investors in Vietnam
• 6. Practical recommendations
• 7. Frequently asked questions

1. Context: why Chinese investors need their own sector map

Chinese investors arrive in Vietnam with a mental map shaped at home: China manages foreign investment through a single unified Negative List — outside the prohibited/restricted entries, national treatment applies. Vietnam presents a different architecture: three independent layers checked in parallel — (i) prohibited business lines (Article 6, 2025 Investment Law), (ii) the List of business lines with restricted market access for foreign investors (Article 8, 2025 Investment Law + Appendix I of Decree 96/2026/ND-CP), and (iii) conditional business lines applicable to all investors (Article 7, 2025 Investment Law + the 142-sector List under Resolution 66.17/2026/NQ-CP for the period 1 July 2026–28 February 2027). Behind layer (ii) sits a fourth, less visible layer: Vietnam's WTO and FTA commitments, which shape the actual conditions.

This article does not duplicate its China Desk siblings: T-046 compares corporate income tax incentives Vietnam vs China (the "where to put the factory" question), and T-042 is a lookup guide for the 142-sector conditional list in general. This piece answers the earlier question, from the Chinese investor's vantage point: which sectors are open, restricted or closed to me — and on what conditions?

2. Overview comparison: Vietnam vs China

3. Detailed analysis

3.1 Vietnam's three barriers — check them in the wrong order and the whole answer is wrong

The most confusing feature for Chinese investors is that Vietnam has no single equivalent of the Negative List. Correct practice is a three-layer check, from hardest to softest:

Layer 1 — Absolute prohibitions (Article 6, 2025 Investment Law). Eleven groups of business lines closed to all investors, foreign or domestic. Against the 2020 Law's eight groups, the 2025 Law adds three: trading in national treasures, export of relics and antiques, and e-cigarettes/heated tobacco. Chinese investors trading in specialty goods should pay particular attention to these additions.

Layer 2 — Restricted market access for foreign investors (Article 8 + Appendix I, Decree 96/2026/ND-CP). This is the layer that applies only to foreign investors — and the one Chinese investors most often miss. Appendix I contains Section A: 23 lines with no market access (press and news gathering; investigation and security services; judicial-administrative services including notarial, auction and bailiff services; sending workers abroad; public postal services; transit trade; temporary import for re-export; industrial-property representation, etc.) and Section B: 62 lines with conditional access (banking/insurance/securities; post/telecoms; advertising; education; all transport modes; casinos/betting; real estate business; legal services; distribution/goods trading; tourism; health services, etc.). Notable change from 31 March 2026: "construction activities of foreign contractors" joins Section B — directly affecting Chinese EPC contractors (see §3.4).

Article 8(1) states the default plainly: outside the restricted list, foreign investors receive the same treatment as domestic investors. Vietnam's market is "open by default" — but that openness must be verified against the list, never assumed.

Layer 3 — Conditional business lines (Article 7 + Resolution 66.17). This layer applies to every investor. During 1 July 2026–28 February 2027 the governing list is the 142-sector Appendix to Resolution 66.17/2026/NQ-CP (down from 198 in Appendix IV of the 2025 Investment Law), and under Article 6(3) of the Resolution its provisions prevail over conflicting related instruments. The lookup method is covered in our conditional business lines guide for foreign investors.

The three layers are independent and cumulative: a line can sit in both Section B (restricted access) and the 142-sector list (conditional) — telecoms, casinos and real estate are examples. Investors must satisfy both.

3.2 Open sectors: manufacturing is the largest "green zone" for Chinese investors

The best news first: industrial manufacturing is generally outside the restricted-access list. Electronics, textiles, footwear, furniture, machinery, components — Chinese investors may establish 100% foreign-owned enterprises on the same conditions as domestic investors (Article 8(1)). This is the structural reason manufacturing capital has flowed from China into Vietnam, analysed in our factory relocation guide.

A helpful 2025 innovation: under Article 19(2), foreign investors may establish the business organisation first and complete IRC issuance/amendment afterwards — materially faster market entry than under the 2020 Law (which required a project before the company). Note the qualifier: market-access conditions under Article 8 still apply at establishment, so "incorporate first" does not mean "skip the sector check".

Investment incentives for manufacturing (tax, land, support) are a separate question — see investment incentives for foreign-invested projects and our T-046 comparison of Vietnam vs China CIT incentives (same comparison cluster; the link will be added once T-046 is live). "Permitted" and "incentivised" are different concepts; do not conflate them.

3.3 A textbook restricted sector: retail distribution and the ENT "test"

Distribution shows why "permitted" does not mean "unconditional". Under Vietnam's WTO services schedule, from 1 January 2009 foreign-invested enterprises may hold up to 100% of distribution businesses (commission agents, wholesale, retail, franchising). That reads as "fully open" — but the same commitment reserves a valve: establishing retail outlets beyond the first is subject to an Economic Needs Test (ENT).

Domestic implementation sits in Article 23 of Decree 09/2018/ND-CP: a foreign-invested retailer's second and subsequent outlets must pass ENT criteria — the size of the affected geographic market, the number of operating retail outlets there, and the impact on market stability and on existing retailers and traditional markets. ENT is waived for outlets under 500 m² inside a shopping mall that are not convenience stores or mini-supermarkets.

Practical consequence for a Chinese retailer: the home-market playbook of rapid multi-outlet rollout stalls at outlet number two. A workable strategy sequences openings in clusters, prioritises ENT-exempt formats, and bakes the ENT timeline into lease agreements (conditional clauses). Retail structuring belongs with the legal issues to design from the outset.

3.4 New in 2026: foreign contractors' construction activities become conditional-access

From 31 March 2026, "construction activities of foreign contractors" appears in Section B of Appendix I to Decree 96/2026/ND-CP — i.e. conditional market access, a new entry against the old 61-line list. It directly affects Chinese general and specialist contractors building factories and industrial parks in Vietnam.

Previously, foreign contractors already needed a construction activity licence under construction law; listing the activity in the market-access catalogue elevates the condition into an entry-stage control at investment registration. Chinese contractors should audit: does the existing contractor licence still match the registered business lines, and does business line registration for the FDI company need a market-access-compliance step before signing new contracts? See also our full market access conditions guide.

3.5 The reverse angle: how China regulates foreign investors

To calibrate what "open" means in Vietnam, it helps to see how China itself treats inbound investors — because many assume symmetry that does not exist.

Framework: China's Foreign Investment Law (外商投资法, adopted 15 March 2019, effective 1 January 2020) establishes at Article 4 the "pre-establishment national treatment plus negative list" regime (准入前国民待遇加负面清单管理制度): outside the list, foreign investors receive national treatment from the access stage. Article 28 provides that prohibited-list areas are closed to foreign investment and restricted-list areas require compliance with the listed conditions.

The 2024 Negative List (外商投资准入特别管理措施（负面清单）（2024年版）, issued by the NDRC and MOFCOM in September 2024, effective 1 November 2024) retains only 29 measures — headlined by the removal of all remaining foreign-investment restrictions in manufacturing (制造业外资准入限制 "清零"): the last two entries deleted were "publication printing subject to Chinese controlling stake" and "prohibition on investing in traditional-Chinese-medicine processing techniques and confidential-formula products". In parallel, the 2025 Catalogue of Encouraged Industries (鼓励外商投资产业目录（2025年版）, 1,679 entries, effective 1 February 2026) steers foreign capital toward advanced manufacturing, modern services and high technology.

Procedure: China runs primarily on filing (备案), reinforced by investment information reporting (投资信息报告, Article 34) — a decisive move to post-establishment supervision. Vietnam still requires a per-project IRC for foreign investors: heavier pre-entry control.

The benchmarking lesson: Vietnam is "open in principle" (Article 8(1)) but "tight in per-project procedure"; China is "tight in the list" but "lighter after entry". Do not reason by symmetry: a sector liberalised in China (manufacturing is now fully "zeroed out") may still sit in Vietnam's restricted-access list — and vice versa.

4. Similarities worth noting

• Same "restricted list" logic: although Vietnam splits it into three layers and China unifies it in one, the philosophy matches — outside the restricted list, national treatment applies. Investors fluent in reading the Negative List will grasp Vietnam's restricted-access list quickly; they only need to remember the other two layers.
• Same national-security valve: Vietnam (Articles 5(3), 21(2)) and China (Article 35 FIL plus the 2020 security-review measures) both reserve intervention rights on defence/security grounds. Projects near sensitive zones (islands, borders, coasts, key infrastructure) face heightened scrutiny in both countries.
• Same liberalisation direction: Vietnam cut the conditional list 198 → 142 and pilots post-inspection management; China shrank the Negative List to 29 measures and zeroed out manufacturing. Both are competing for supply-chain-relocation capital.
• Same "prohibited vs restricted" distinction: prohibited means never; restricted means yes-if-conditions-are-met. Confusing the two — in either country — produces wrong investment decisions.

5. Common risks for Chinese investors in Vietnam

Risk 1 — Checking only the 142-sector list and missing the market-access layer. Investors (and inexperienced advisers) check Resolution 66.17, find their line absent from the 142 conditional sectors, and conclude "fully open" — while the line sits in Section B of Appendix I to Decree 96/2026 (distribution, education, legal services are classic traps). Result: the IRC file is returned or refused for unmet market-access conditions. Prevention: run the three-layer check for every intended line before project setup; see IRC vs ERC for which filing tests which condition.

Risk 2 — "If it works in China, it works in Vietnam" thinking. The VIE (contractual-control) structures common in China for circumventing ownership caps in certain sectors have no equivalent legal basis in Vietnam and risk being treated as sham transactions breaching market-access conditions. Press, compulsory education and infrastructure-based telecoms are as tightly controlled in Vietnam as in China. Prevention: have every "creative" ownership structure vetted by Vietnamese counsel before implementation.

Risk 3 — Rolling out a retail chain without pricing in the ENT from outlet two. Accustomed to home-market speed, some investors sign multiple leases, then discover outlets beyond the first need ENT clearance — dead rent while waiting. Prevention: design the rollout in clusters, favour ENT-exempt formats, and condition leases on ENT timelines.

Risk 4 — Chinese contractors operating before meeting the new access condition. Since 31 March 2026, foreign contractors' construction sits in conditional-access Section B(20). Contractors mid-project on old licences should verify legal continuity; new entrants must budget the compliance step at investment registration. Prevention: audit all contractor licences and registered lines before signing new contracts.

Risk 5 — Confusing "may invest in real estate" with "may own land". Real estate business is Section B(19) — investable with conditions; but foreign investors cannot own land in Vietnam, only lease it, and acquiring land-use rights on islands, in border or coastal communes faces special controls (Article 21(2)(c)). Individual housing purchases are likewise restricted under the Housing Law. Prevention: separate "project investment" advice from "land-use rights" advice; diligence the land location before committing capital.

Risk 6 — Ignoring the 28 February 2027 clock on Resolution 66.17 and Law 24/2026/QH16. Resolution 66.17 expires after 28 February 2027; Law 24/2026/QH16 (adopted by the National Assembly on 24 August 2026) adds point (m) to Article 6 — a ban on trading N2O ("laughing gas") for direct human inhalation (except for medical, food-technology, testing and scientific-research use), effective 1 January 2027 — and issues a new Appendix IV of 137 lines (cut from 198), effective 1 March 2027, immediately after Resolution 66.17 expires. Projects spanning these dates need contractual change-of-list provisions. Prevention: put 1 January 2027, 28 February 2027 and 1 March 2027 on the internal compliance calendar.

6. Practical recommendations

Before investing:

1. Run the "three-layer checklist" for each intended line: (i) caught by the 11 Article 6 prohibitions? (ii) in Section A (23 lines — stop) or Section B (62 lines — identify the specific conditions) of Appendix I, Decree 96/2026? (iii) in the 142-sector Resolution 66.17 list? Record the check in an internal memo with article citations — the investment registration agency will ask.
2. Cross-check WTO/FTA commitments for services: for distribution, telecoms, finance, transport, the operative access conditions live in Vietnam's treaty commitments. Do not read domestic law alone.
3. Structure after the conditions are known: choose the form (100% owned, JV, share acquisition) after the permitted equity ratio is established — not before. For M&A, note Article 21: share acquisitions in conditional-access lines, or taking foreign ownership above 50%, require registration before the member/shareholder change.

While operating:

1. Manage sub-licences and post-inspection duties: after the ERC, work through the post-ERC licence checklist and post-licensing compliance programme. Lines moved to post-inspection under Resolution 66.17 need no upfront licence — but remain subject to inspection.
2. Re-check on every expansion: each new outlet, added line or capital increase is tested against the market-access conditions at the time of the new filing, not at the original licensing date.

On change or dispute:

1. Track legislation as a compliance item: the 1 January 2027 point-(m) N2O ban, the 28 February 2027 expiry, the 1 March 2027 new Appendix IV (137 lines) under Law 24/2026/QH16, and new-generation FTAs can all redraw the sector map. For large projects, consider building Article 12 (investment protection on legal change) mechanics into negotiations early. Our A–Z investment guide sets the full sequence.

7. Frequently asked questions

Can a Chinese investor own 100% of a manufacturing company in Vietnam? Yes. Industrial manufacturing is generally outside the restricted-access list (Appendix I, Decree 96/2026/ND-CP), so foreign investors receive the same treatment as domestic investors under Article 8(1) of the 2025 Investment Law — no foreign equity cap. Do not confuse this with "incentivised" sectors, a separate concept.

What should a Chinese investor know before opening a retail chain in Vietnam? Under the WTO commitments, foreign investors may own up to 100% of a retail distribution enterprise from 1 January 2009. However, outlets beyond the first require an Economic Needs Test (ENT) under Article 23 of Decree 09/2018/ND-CP — except sub-500 m² outlets inside shopping malls (not convenience stores or mini-supermarkets). Sequence the rollout and condition leases on ENT timelines.

Which sectors are completely closed to foreign investors in Vietnam? Two layers: (i) 11 groups of prohibited business lines for all investors under Article 6 of the 2025 Investment Law (narcotics, firecrackers, debt collection, e-cigarettes/heated tobacco, national treasures, export of relics/antiques, etc.); (ii) 23 lines with no market access for foreign investors under Section A of Appendix I to Decree 96/2026/ND-CP (press, investigation/security services, public postal services, transit trade, temporary import for re-export, etc.).

Does the 142-sector conditional list under Resolution 66.17 apply to Chinese investors? Yes. The 142-sector list (effective 1 July 2026–28 February 2027) applies to all investors. Foreign investors additionally face the market-access layer under Article 8 of the 2025 Investment Law and the WTO/FTA commitments — the layers are independent and must be satisfied together.

Does China apply a similar regime to foreign investors? Yes, but in a single unified list. The Foreign Investment Law (外商投资法, effective 1 January 2020) applies pre-establishment national treatment plus a negative list (准入前国民待遇加负面清单). The 2024 list keeps 29 restrictive measures and has removed all manufacturing restrictions; outside the list, foreign investors receive national treatment.

Does the 142-sector list remain in force after 28 February 2027? No. Resolution 66.17/2026/NQ-CP expires after 28 February 2027 — and the successor instrument for the conditional list is already known: the new Appendix IV (137 lines, cut from 198) issued under Law 24/2026/QH16 takes effect on 1 March 2027, immediately after Resolution 66.17 expires. The N2O trading ban (point (m) of Article 6) takes effect earlier, on 1 January 2027. What remains open: the ministries' transitional management solutions for removed lines (under Article 2(3) of Law 24/2026/QH16, to be issued before 1 March 2027); this article is scheduled for periodic review.

Need counsel fluent in both systems?

Getting the open–restricted–prohibited map right at the project-design stage saves Chinese investors the costliest mistakes: ownership structures that must be rebuilt, refused licences, leased premises that can never open. For a three-layer review of your specific lines, see our A–Z investment guide or contact FLAT's China Desk — hotline 0988424851.

References

• Investment Law 2025 (No. 143/2025/QH15), adopted 11 December 2025, effective 1 March 2026 (Article 7 and Appendix IV effective 1 July 2026).
• Law 24/2026/QH16 dated 24 August 2026 of the National Assembly amending the Investment Law (point (m) of Article 6: ban on trading N2O for direct human inhalation, effective 1 January 2027; new Appendix IV of 137 lines, effective 1 March 2027; Article 2(3): ministries to issue transitional management solutions before 1 March 2027).
• Decree 96/2026/ND-CP dated 31 March 2026 detailing the Investment Law (Appendix I: List of business lines with restricted market access for foreign investors).
• Resolution 66.17/2026/NQ-CP dated 15 May 2026 on cutting conditional business lines (142-sector Appendix).
• Decree 09/2018/ND-CP dated 15 January 2018 on goods trading activities of foreign investors (Article 23: Economic Needs Test).
• Vietnam's WTO services schedule — distribution (effective since accession, 11 January 2007).
• 中华人民共和国外商投资法 (Foreign Investment Law of China), adopted 15 March 2019, effective 1 January 2020.
• 外商投资准入特别管理措施（负面清单）（2024年版）(Negative List 2024), effective 1 November 2024.
• 鼓励外商投资产业目录（2025年版）(Catalogue of Encouraged Industries 2025), effective 1 February 2026.

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