Chinese investors familiar with the Foreign Investment Law (FIL) at home will encounter a very different “rulebook” in Vietnam: the Investment Law 143/2025/QH15 (passed 11/12/2025, effective 1/3/2026, replacing Investment Law 61/2020/QH14 in full). Conversely, Vietnamese investors going to China face equally pivotal differences. Here are 10 key differences between the two frameworks, viewed from both directions.
1. Scope: one general law vs. a foreign-investment-only law
Vietnam — Law 143/2025: a single general law governing domestic investment, foreign investment in Vietnam, and outbound investment by Vietnamese investors.
China — FIL: governs only foreign investment in China; domestic investment by Chinese investors follows the Company Law.
Implication: in Vietnam, Chinese investors read one law covering all investment types; in China, Vietnamese investors need only the FIL for the foreign-invested part of their business.
2. Negative list / market access
Vietnam — Article 8, Investment Law 2025: foreign investors enjoy market-access conditions equal to domestic investors, except for the restricted list in Appendix I of Decree 96/2026/ND-CP (31/3/2026 — guiding the 2025 Investment Law, replacing Decrees 31/2021, 19/2025 and 239/2025): 23 industry groups not yet open to foreign investors + 48 groups subject to conditions. Five types of access conditions apply: ownership ratios, investment forms, scope of operations, investor/partner capacity, and other conditions.
China — Articles 4 and 28 FIL: sectors on the negative list are prohibited → no investment allowed; restricted sectors → conditions must be met; off-list sectors → national treatment. The negative list is issued/approved by the State Council (NDRC + MOFCOM).
Implication: both countries use a “prohibited/restricted list”, but the sector details and issuing authorities differ — always check each country’s own list; never infer from one to the other.
3. Investment policy approval: Vietnam’s distinctive “gate”
Vietnam: a decentralized investment-policy approval mechanism (National Assembly / Prime Minister / provincial People’s Committees) based on project scale, sector and location. This is the first “gate” for large projects — only after approval comes the Investment Registration Certificate (IRC). The mechanism is also referenced in the rules on investment project transfer (Article 34, Investment Law 2025).
China: no equivalent mechanism; foreign investment is managed through the negative list + security review + the information reporting system.
Implication: this is Chinese investors’ biggest stumbling block — a Vietnamese project may require an extra approval layer that does not exist in China.
4. National security review: China has it, Vietnam has no equivalent
China — Article 35 FIL + NDRC Order 37 (18/01/2021): a security review mechanism for foreign investment; review decisions are final.
Vietnam: the Investment Law does not provide a foreign-investment security review mechanism comparable to the FIL (stated cautiously, without absolutizing the entire legal system).
Implication: in the reverse direction — Vietnamese investors going to China must prepare for possible security review of their projects, a risk with no real equivalent in Vietnam.
5. From pre-approval to post-supervision: Vietnam’s 2026 innovation
Vietnam — Decree 96/2026/ND-CP (new): foreign investors may establish the economic organization first, then complete IRC issuance within 12 months (committing to meet market-access conditions) — a shift from “pre-approval” to “post-supervision” logic.
China: foreign-invested enterprises (FIEs) register under the Company Law, with no “IRC” equivalent; post-establishment management runs through the investment information reporting system (Article 34 FIL).
Implication: entering Vietnam has become significantly more flexible since 2026; but “post-supervision” means post-establishment compliance obligations must be carefully prepared.
6. No nationalization / expropriation
Vietnam — Article 9, Investment Law 2025: investors’ lawful assets shall not be nationalized or confiscated by administrative measures; where the State requisitions or expropriates assets (for national defense, security, national interests, emergencies or natural disasters), compensation follows the law on requisition and expropriation.
China — Article 20 FIL: no expropriation of foreign investors’ investments; in special circumstances for public interests, expropriation/requisition follows statutory procedures with fair, reasonable and timely compensation.
Implication: both countries commit to asset protection at statute level — a rare point of convergence, building a foundation of trust for two-way investors.
7. Profit repatriation
Vietnam: the general principle — foreign investors may transfer abroad capital, profits and lawful income after fulfilling financial obligations as prescribed.
China — Article 21 FIL: capital contributions, profits, capital gains, transfer income, IP royalties, compensation and liquidation proceeds may be freely transferred in and out in RMB or foreign currency — “in accordance with the law”. In practice, flows are subject to foreign-exchange controls by the State Administration of Foreign Exchange (SAFE) — properly stated: not “absolutely free”.
Implication: Vietnamese investors’ exit planning in China must factor in the real layer of foreign-exchange control, not just the statutory phrase “freely transfer”.
8. Investor–State disputes
Vietnam — Article 13, Investment Law 2025: disputes are resolved through Vietnamese arbitration or Vietnamese courts, unless otherwise agreed in the contract or provided by an international treaty to which Vietnam is a party.
China — Article 26 FIL: a complaint mechanism for FIEs where administrative acts infringe their lawful rights and interests; investors may also seek administrative reconsideration or file administrative litigation. Chinese domestic law does not open international arbitration for investor–State disputes.
Implication: do not expect to sue the Chinese government in international arbitration under domestic law — the channels are complaints and administrative review within China’s system.
9. Disputes between investors: Vietnam’s open framework
Vietnam — Article 13, Investment Law 2025: disputes with at least one foreign-investor party may be resolved at Vietnamese courts, Vietnamese arbitration, foreign arbitration, or international arbitration, or arbitration as agreed by the parties. This open framework benefits Chinese investors wishing to choose international arbitration (see also our analysis of arbitration clauses for Vietnam–China contracts).
China: disputes between investors follow Chinese procedural/arbitration law (outside the FIL’s scope).
10. Investment incentives + technology / IP protection
Vietnam: incentives by location, sector and scale; special incentives for strategic technologies and semiconductors (Decree 96/2026); IP protection under the IP Law (consolidated document 67).
China — Article 22 FIL: administrative organs are prohibited from forcing technology transfer; technology cooperation on a voluntary and fair basis; protection of foreign investors’ intellectual property rights. The Encouraged Catalogue for foreign investment is issued by NDRC/MOFCOM.
Implication: both countries use incentives to attract high-tech capital — but the incentive mechanisms and encouraged catalogues are entirely different; check each country’s own instruments.
Bonus: Project duration
Vietnam — Article 31, Investment Law 2025: project duration not exceeding 50 years (outside economic zones); inside economic zones, not exceeding 70 years; special cases (difficult areas, large slow-recovery capital, high-tech infrastructure, special incentives) may be longer but not exceeding 70 years.
China: the FIL does not limit investment project duration.
Implication: Chinese investors used to “unlimited-duration” projects at home must recalculate project lifecycles when entering Vietnam.
Three 2026 developments investors must note
- Post-supervision in Vietnam: establish the enterprise first, complete the IRC within 12 months (Decree 96/2026);
- China’s three old FIE forms have ended their transition period (01/01/2025) — now organized under the Company Law (Article 31 FIL);
- Law 24/2026/QH16 (amending the Investment Law, cutting restricted sectors) takes effect 01/03/2027 — not yet in force: mention only as upcoming rules, not as current law.
Practical recommendations
- Chinese investors entering Vietnam: check the three distinctive “gates” — investment-policy approval, the 23/48 list in Decree 96/2026, and the 50/70-year project duration;
- Vietnamese investors going to China: prepare for security review (Article 35 FIL), SAFE foreign-exchange controls, and the post-establishment information reporting system;
- Prepare ownership charts: Enterprise Law 59/2020 (amended by Law 76/2025/QH15) adds beneficial-owner disclosure obligations — Chinese investors should prepare transparent ownership structures;
- Do not assert ISDS under the Vietnam–China BIT without checking the original treaty: the BIT’s validity and investor–State dispute scope need separate verification;
- Check the latest negative lists: both Vietnam’s list (Decree 96/2026) and China’s negative list may be updated — always verify the newest version before investing.
Frequently asked questions
Is Investment Law 61/2020 still in force?
No. Investment Law 61/2020/QH14 has been fully replaced by Investment Law 143/2025/QH15 (effective 1/3/2026) — do not cite Law 61/2020 for new matters.
Must foreign investors obtain investment-policy approval before establishing an enterprise in Vietnam?
It depends on the project: the decentralized approval mechanism applies by scale, sector and location — only to projects subject to approval. From 2026, under the post-supervision mechanism (Decree 96/2026), foreign investors may establish the economic organization first and complete the IRC within 12 months.
Does China allow suing the government in international arbitration?
Under domestic law (Article 26 FIL), the channels are complaints, administrative reconsideration or administrative litigation — the law does not open international arbitration for investor–State disputes.
What is the maximum project duration in Vietnam?
Under Article 31 of the 2025 Investment Law: not more than 50 years outside economic zones (up to 70 years in special cases), not more than 70 years inside economic zones.
Sources
- Investment Law 143/2025/QH15 — passed 11/12/2025, effective 1/3/2026 (replacing Law 61/2020/QH14): Article 8 (market access), Article 9 (ownership guarantees), Article 10 (guarantees for business operations), Article 13 (dispute resolution), Article 31 (project duration), Article 34 (project transfer);
- Decree 96/2026/ND-CP (31/3/2026) — guiding the 2025 Investment Law: Appendix I (23 closed + 48 conditional industry groups); post-supervision mechanism (establish first, complete IRC within 12 months); special incentives;
- Enterprise Law 59/2020/QH14 + Law 76/2025/QH15 (beneficial-owner disclosure);
- Foreign Investment Law (NPC passed 15/3/2019, effective 1/1/2020): Article 4 (national treatment + negative list), Article 20 (no expropriation), Article 21 (profit transfer), Article 22 (no forced technology transfer), Article 26 (complaint mechanism), Article 28 (negative list), Article 31 (FIE organization under Company Law), Article 35 (security review), Article 42 (effectiveness);
- NDRC Order 37 (18/01/2021) — foreign investment security review measures (China).
For reference only; not legal advice. This content was drafted by AI and will be quality-checked by the AI Legal Council of FLAT Law Firm before publication review; it is not legal advice from a human lawyer. Regulations may change; please check the current legal texts before relying on this information.
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