Tiếng ViệtVietnam continues to be an attractive destination for FDI enterprises thanks to a more transparent legal environment, multiple free trade agreements, and competitive tax incentives. However, not all sectors are fully open. Certain conditional business sectors for FDI require foreign investors to meet additional legal procedures, comply with foreign ownership limits, or obtain specialized sub-licenses.
Failure to comply with these conditions may result in rejection of FDI company establishment applications, revocation of licenses, and exposure to administrative sanctions. In this article, LexConsult & Partners will provide a comprehensive analysis of the legal framework, the list of restricted sectors, and practical legal solutions for FDI enterprises, enabling you to mitigate risks and optimize your investment structure from the outset.
1. What Are Conditional Business Sectors? Comparison with Unconditional Sectors
According to Clause 1, Article 7 of the Law on Investment 2020, conditional business sectors are those in which organizations and individuals (including foreign investors) are only permitted to operate if they satisfy statutory conditions, for reasons relating to:
– National defense and security;
– Social order and safety;
– Social ethics;
– Public health.
For foreign investors, in addition to the conditions applicable to Vietnamese enterprises in general, they must also comply with Article 9 of the Law on Investment 2020 regarding market access conditions, as detailed in Appendix I of Decree No. 31/2021/NĐ-CP (including sectors that are not open or sectors that are open with conditions).
Comparison between conditional and unconditional business sectors:
| Criteria | Conditional Business Sectors | Unconditional Business Sectors |
|---|---|---|
| Legal requirements | Must comply with conditions under the Law on Investment, international treaties, and specialized legislation | Only required to meet general enterprise establishment conditions |
| Foreign ownership ratio | May be restricted (e.g., maximum 49% or 51%) | No restrictions |
| Scope of operations | May be limited by geographical area or type of services | Permitted nationwide and across multiple sectors |
| Specialized licenses | Mandatory before or after establishment | Not required |
| Examples | Banking, telecommunications, real estate, logistics, advertising | B2B e-commerce, manufacturing of ordinary consumer goods |
2. Legal Basis for Foreign Investors
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Law on Investment No. 61/2020/QH14 (effective from 01 January 2021);
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Decree No. 31/2021/NĐ-CP dated 26 March 2021 of the Government – Detailing and guiding the implementation of certain provisions of the Law on Investment;
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Appendix IV of the Law on Investment 2020 – List of 227 conditional business sectors;
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Appendix I of Decree No. 31/2021/NĐ-CP – List of sectors with restricted market access for foreign investors;
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International treaties to which Vietnam is a signatory: WTO, CPTPP, EVFTA, RCEP, etc.;
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WTO Schedule of Commitments and bilateral agreements;
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Specialized laws: Law on Real Estate Business 2014 (amended in 2023), Law on Advertising 2012, Maritime Code 2015, Law on Education 2019, Law on Medical Examination and Treatment 2023.
3. Types of Conditions Applicable to FDI Enterprises
When doing business in Vietnam, foreign investors may be subject to two layers of conditions:
3.1. Market Access Conditions
Legal basis: Article 9 of the Law on Investment 2020; Articles 15, 16, and 17 of Decree No. 31/2021/NĐ-CP; and relevant specialized laws.
Market access conditions include:
– Restrictions on foreign ownership ratios (e.g., foreign investors in the aviation sector are capped at a maximum of 34% ownership);
– Mandatory forms of investment such as joint ventures, Business Cooperation Contracts (BCC), or establishment of subsidiaries;
– Scope and geographical restrictions: investment may only be permitted in certain areas or zones (some sectors are limited to areas not sensitive to national defense or security);
– Requirements on capacity and experience: investors must meet minimum thresholds under specialized laws (e.g., casino business requires at least five years of proven international operating experience).
3.2. Business Conditions
Legal basis: Clause 3, Article 7 of the Law on Investment 2020; specialized laws; and guiding decrees.
Common forms of business conditions include:
– Sub-licenses: e.g., retail distribution of goods under Decree No. 09/2018/NĐ-CP; international travel services under the Law on Tourism 2017 and Decree No. 168/2017/NĐ-CP;
– Practicing certificates: e.g., legal services under the Law on Lawyers 2006 (amended 2012), which requires Vietnamese lawyers holding practicing certificates;
– Legal capital requirements: e.g., real estate business (minimum VND 20 billion); aviation (international airlines must maintain at least VND 700 billion in charter capital);
– Personnel requirements: e.g., education under the Law on Education 2019, which requires minimum teacher-student ratios, qualifications, and professional certifications;
– Facilities and technology requirements: e.g., healthcare under the Law on Medical Examination and Treatment 2023; film production under the Law on Cinematography 2022, which specifies studio facilities, equipment, and production technology;
– Other specific conditions as prescribed under specialized legislation.
4. List of Conditional Business Sectors for FDI Investors in Vietnam
The list is divided into two categories:
– Sectors with restricted market access – Pursuant to Appendix I of Decree No. 31/2021/NĐ-CP:
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Closed sectors: Foreign investors are not permitted to invest;
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Open with conditions: Permitted but subject to equity caps or mandatory forms of investment.
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– Sectors subject to general business conditions – Pursuant to Appendix IV of the Law on Investment 2020: Business conditions must be satisfied under specialized legislation.
Legal requirements and conditions for selected sectors are as follows:
| No. | Sector | Specific Conditions for Foreign Investors |
|---|---|---|
| 1 | Banking | Must establish a wholly foreign-owned bank or a joint venture bank; subject to the Law on Credit Institutions and approval by the State Bank of Vietnam. |
| 2 | Insurance | Subject to equity ownership limits; must meet statutory capital requirements and demonstrate international experience in insurance. |
| 3 | Securities | Foreign ownership capped at 49% (unless higher under international treaties); must obtain a license from the State Securities Commission. |
| 4 | Telecommunications with infrastructure | Foreign ownership capped at 49%; joint venture with a Vietnamese enterprise is mandatory. |
| 5 | Maritime transport | Foreign ownership in Vietnamese maritime transport enterprises capped at 49%. |
| 6 | Aviation | Foreign ownership capped at 34%; subject to requirements on fleet size, statutory capital, and approval by the Civil Aviation Authority of Vietnam. |
| 7 | Postal services | Must establish a joint venture or cooperation contract; license required from the Ministry of Information and Communications. |
| 8 | Mining and mineral processing | Permitted only with approval from competent authorities and in compliance with the national mineral plan. |
| 9 | Real estate business | Must establish an enterprise in Vietnam; restrictions on trading commercial housing except in limited cases. |
| 10 | Education services | Foreign equity caps vary by level of education; curricula must be approved by the Ministry of Education and Training. |
| 11 | Healthcare services | License required from the Ministry of Health; must meet statutory facility and staffing requirements. |
| 12 | Auditing services | Must establish a joint venture with a Vietnamese auditing firm; practicing individuals must hold Vietnamese licenses. |
| 13 | Advertising | Must establish a joint venture with a Vietnamese enterprise; management personnel must be Vietnamese nationals. |
| 14 | Printing & publishing | Only permitted through joint ventures or cooperation with Vietnamese entities; subject to content restrictions. |
| 15 | Forestry | Must comply with forest use planning and obtain approval from competent authorities. |
| 16 | Fisheries | Foreign ownership of fishing vessels restricted; only permitted to lease Vietnamese vessels. |
| 17 | Legal services | May establish a 100% foreign-owned law firm or joint venture law firm under the Law on Lawyers. |
| 18 | International travel services | Only permitted to operate inbound services (bringing tourists into Vietnam); must obtain an international travel license. |
| 19 | Broadcasting & television | Foreign investors cannot hold controlling equity; cooperation with a Vietnamese partner for content production is mandatory. |
| 20 | Lottery & betting | Permitted only for projects specifically approved and licensed by the Government. |
| 21 | Oil & gas exploration and exploitation | Subject to petroleum contracts; must meet technical and safety requirements. |
| 22 | Road transport services | Must establish a joint venture with a Vietnamese enterprise; foreign ownership capped at 51%. |
| 23 | Weapons & explosives production and trading | Permitted only with approval of the Prime Minister and licensing by the Ministry of Public Security. |
| 24 | Cybersecurity services | Must obtain approval from the Ministry of Public Security; scope of service provision restricted. |
| 25 | E-commerce | Certain business models require joint ventures; subject to Decree No. 52/2013/NĐ-CP and subsequent amendments. |
| 26 | Real estate brokerage services | Practitioners must hold valid professional certificates; foreign individuals must meet residency requirements. |
| 27 | Logistics services | Depending on the subsector, foreign ownership capped between 49% and 100% under WTO commitments. |
| 28 | Film production | Must establish a joint venture with a Vietnamese partner; restricted rights in distribution and broadcasting. |
| 29 | Accounting services | Subject to equity ownership limits; practitioners must hold Vietnamese accounting certificates. |
Note: The list of sectors and applicable conditions is subject to change. Enterprises must stay updated. Please refer to Appendix IV of the Law on Investment 2020, Appendices I and II of Decree No. 31/2021/NĐ-CP, and commitments under free trade agreements.
5. How to Look Up Conditional Business Sectors [Detailed Guide]
To help investors conveniently identify business sectors and specific conditions, there are four main methods of reference:
5.1. Online search via the National Business Registration Portal
– Access: https://dangkykinhdoanh.gov.vn
– Select the section “Conditional business investment sectors”;
– Search by sector name or sector group;
– Review information on conditions, legal basis, and related documents.
5.2. Search on the websites of relevant Ministries and Authorities
– Ministry of Health – https://moh.gov.vn (medical examination and treatment, pharmaceuticals);
– Ministry of Public Security – https://bocongan.gov.vn (security services, seal production);
– Ministry of Construction – https://moc.gov.vn (construction, real estate).
5.3. Direct inquiry at state authorities
Investors may visit the Department of Finance or specialized management ministries/agencies to obtain information.
5.4. Legal advisory services
Reputable law firms can provide support in:
– Identifying the correct business sector;
– Assessing the ability to meet statutory conditions;
– Carrying out registration procedures efficiently, minimizing risks.
6. Investment Procedures in Conditional Business Sectors in Vietnam
Legal basis: Articles 38–44 of the Law on Investment 2020; Articles 31–35 of Decree No. 31/2021/NĐ-CP.
Step 1: Verify market access conditions – Refer to Appendix I of Decree No. 31/2021/NĐ-CP;
Step 2: Fulfill specialized business conditions – Prepare dossiers, capital, personnel, and facilities as required under specialized laws;
Step 3: Establish an FDI enterprise – Apply for an Investment Registration Certificate (IRC) and an Enterprise Registration Certificate (ERC);
Step 4: Obtain sub-licenses (if applicable) – e.g., retail business license, transportation license;
Step 5: Maintain conditions throughout operations – Submit periodic reports under Article 72 of Decree No. 31/2021/NĐ-CP; renew licenses on time.
7. Key Considerations When Investing in Conditional Business Sectors
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Not all business sectors permitted under Vietnamese law are open to foreign investors—compliance with both international commitments and domestic regulations is required;
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Market access conditions may change over time or depending on Vietnam’s trade partners;
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Certain sectors require compliance with multiple conditions (e.g., import liquor retail requires both a sub-license and fulfillment of warehouse, security, and tax requirements);
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Legal Due Diligence is recommended before signing contracts or transferring investment funds;
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It is advisable to engage professional legal advisory services to ensure compliance and optimize licensing timelines.
Investment in conditional business sectors for foreign investors presents both opportunities for market expansion and significant legal challenges. Enterprises must clearly understand foreign ownership caps, market access conditions, and additional licensing requirements to avoid project delays.
The most effective solution is to partner with FDI legal advisors who understand both the Law on Investment 2020 and international commitments. At LexConsult & Partners, we provide comprehensive FDI legal services, supporting clients from industry review and preparation of investment registration dossiers to risk management advisory.
Lexconsult & Partners – Your Trusted Legal Partner for FDI Enterprises in Vietnam.
**Related articles:**
– Investment Registration Certificate (IRC) in Vietnam 2025: Requirements & Application Guide
📧 Email: info@lexconsult.com.vn
