Scenario: a Singapore fund wants 70% of a Vietnamese logistics company. The seller says “just sign, no problem.” The fund’s lawyers check and find warehousing logistics is conditionally restricted for foreign investors. Can the 70% deal proceed?
What the “foreign room” is and who sets it
The “foreign room” — the maximum foreign ownership ratio in a business/sector — is not one-size-fits-all. The 2025 Law on Investment 143/2025/QH15 (replacing Law 61/2020 from 01/3/2026, in force as of 19/10/2026) lists sectors with conditional market access for foreign investors, with access conditions: maximum ownership ratios, investment forms, business scope, investor capacity… Decree 342/2026/ND-CP (replacing Decree 09/2018 from 18/10/2026) details implementation.
Roughly: the more “sensitive” the sector (telecom, banking, transport, distribution, media…), the lower the room and the more conditions. Unrestricted sectors allow up to 100% foreign ownership.
Three check layers before buying
- Layer 1 — Statutory list: look up the target’s business lines in the conditional-access list. Each code has its own room and conditions — warehousing logistics differs from maritime transport logistics.
- Layer 2 — International commitments: WTO and FTA schedules (CPTPP, EVFTA…) may open wider rooms or set country-specific conditions. A Singaporean investor (CPTPP) may be treated differently from one without an FTA.
- Layer 3 — Company charter: companies (especially public ones) may set a foreign room below the legal maximum in their charter. Over-charter purchases won’t clear settlement for the excess.
Exceeding the room
Over-room transfers won’t be approved — meaning no title transfer, and deposits get stuck. For public companies, the clearing system blocks the excess at settlement. Deliberate circumvention via “nominee” holders breaches investment law and can draw penalties plus forced divestiture of the excess.
Structuring the 70% deal
- Pin down the exact room for each business code the company operates — use the lowest as the benchmark.
- If the room is only 51%: structure 51% equity plus a shareholders’ agreement (veto rights on key matters, nomination rights) to keep de facto control within the room.
- If the sector has an FTA opening roadmap: negotiate a “top-up when the room widens” clause in the purchase agreement.
- Never sign deposits/transfers before a written legal opinion on the room.
Frequently asked questions
What is the foreign ownership cap percentage?
No single number. It depends on the sector under the conditional-access list of the 2025 Law on Investment 143/2025/QH15 and international commitments (WTO, CPTPP, EVFTA…). Unrestricted sectors: up to 100%.
Can an over-room purchase be registered?
No. Over-room transfers aren’t approved for title transfer; public-company clearing blocks the excess. Nominee workarounds breach the law.
Where to check the foreign room accurately?
The conditional-access sector list (Law on Investment 143/2025, Decree 342/2026), Vietnam’s WTO/FTA schedules, and the target’s charter. All three must align.
Room is only 51% but I want control — how?
Structure 51% equity with a shareholders’ agreement: veto rights on key matters, majority board/CEO nomination rights, deadlock mechanisms — de facto control within the room.
This article has been quality-reviewed by the FLAW AI Legal Council Content prepared by the AI Legal Council of FLAT Law Firm for general reference only; it has not been reviewed by a human lawyer for your specific situation.