By Vu Manh Quynh, Managing Partner, ECOVIS Vietnam Law · law and data as at 18 October 2026
Answer in brief. Before approving a new Vietnam investment, a Board should require management to answer 20 questions in five areas: strategic fit, legal structure and licensing, capital and cash movement, operating risk, and exit. Vietnam’s growth and FDI data are strong, but the licence carries commitments. If the project’s objectives are still unmet 24 months after the scheduled date, and no permitted schedule adjustment applies, the investment authority terminates the project (Law 143/2025/QH15, Art. 36(2)(b)). A company formed before its Investment Registration Certificate (IRC) must complete the IRC procedure within 12 months.
Scope. This article covers a new project set up by a foreign investor, whether by licence first or company first. It does not cover acquisitions of existing companies, business cooperation contracts (BCC), representative offices, or projects that need investment policy approval or sit in a conditional business line. Those need separate analysis.
Why the question matters now
Vietnam is no longer a “should we look” market for many Groups. It is a “how do we structure it without losing the licence” market. The headline data support the case; the legal conditions set the terms.
| Indicator | Figure | Source | Note |
|---|---|---|---|
| GDP growth, 2025 | 8.0% | World Bank, Viet Nam Economic Update, 15 May 2026 | |
| GDP growth forecast, 2026 | 7.4% (World Bank, October 2026, revised up by 1.1 percentage points); 7.8% (ADB, September 2026) | World Bank, East Asia and Pacific Economic Update, 6 October 2026; ADB, Asian Development Outlook, September 2026 | ADB raised its forecast from 7.2% in July |
| GDP growth, Jan–Sep 2026 | 9.01% (Q3 2026: 9.95%; Jan–Sep 2025: 7.85%) | National Statistics Office, 3 October 2026 (as reported) | |
| Registered FDI, Jan–Sep 2026 | USD 50.36 billion, +76.4% year on year | National Statistics Office, 3 October 2026 (as reported by VIR, VOV and Vietnam News) | Commitments, including new licences, capital increases and share purchases |
| Disbursed FDI, Jan–Sep 2026 | USD 21.07 billion, +12.1% year on year | Same | Highest nine-month figure in five years, as reported |
| Manufacturing and processing | 45.8% of newly registered capital (USD 13.38 billion); 82.6% of disbursed FDI (USD 17.4 billion) | Same | Shares of newly licensed capital and of disbursement |
| Largest sources of capital in newly licensed projects | Singapore 31.7%; Korea 19.5% | Same | Base: USD 29.24 billion of new licences (3,108 projects) |
Data as at 18 October 2026.
How to read the numbers. Registered capital records commitments; disbursed capital records spending in the period, largely on projects licensed earlier. The two are not a completion rate. Registered commitments in the period were about 2.4 times spending in the period, so much licensed capital has still to be built. Article 36 sets the deadlines for that conversion.
ADB separately cautions that rapid investment-led credit growth could amplify financial vulnerabilities and narrow policy space.
The 20 questions
A. Strategic fit (questions 1–4)
| # | Question the Board should ask | What a good answer contains |
|---|---|---|
| 1 | What business problem does Vietnam solve that our current footprint does not? | A stated objective (cost, customer proximity, supply-chain resilience, market access) with a measurable test |
| 2 | Which scenario is the case built on, and what happens in the downside? | Base and downside cases using more than one forecaster. Forecasts move: the World Bank raised its 2026 figure by 1.1 percentage points in October and ADB by 0.6 points between July and September; the two now differ by 0.4 point |
| 3 | Who are our comparable peers already in Vietnam, and what did they learn? | Named reference points, not general sentiment |
| 4 | Why now, and what does waiting cost? | A dated decision window tied to a customer, a site or an incentive |
B. Legal structure and licensing (questions 5–10)
| # | Question | What a good answer contains |
|---|---|---|
| 5 | Is our business line open to foreign investors, and is it also a conditional business line? | Two separate checks: the market-access conditions for foreign investors (Law 143/2025, Art. 8), and the conditional business lines that apply to all investors (Art. 7 and Annex IV, in force since 1 July 2026; Law No. 24/2026/QH16 replaces Annex IV from 1 March 2027) |
| 6 | Which entry route do we use: licence first or company first? | A reasoned choice (see “Trade-offs” below). Law Art. 19(2) lets a foreign investor form the company first, but market-access conditions must be met when the company is formed |
| 7 | If we form the company first, who owns the 12-month clock? | A named owner and a calendar. Decree 96/2026/NĐ-CP, Art. 72(4), requires the company to complete the procedure to be granted the IRC within 12 months of its establishment |
| 8 | What may the company do before the IRC is issued? | No project implementation. Under Art. 72(4) the company may implement the project only after the IRC is completed, and may add business lines only after it has the IRC |
| 9 | What will the project milestones in the licence say, and can we meet them? | Realistic schedule dates. Under Art. 36(2)(b), where 24 months after the scheduled date the objectives are still unmet and no permitted schedule adjustment applies, the authority terminates the project. For projects needing investment policy approval, termination follows the approving authority’s opinion (Art. 36(3)) |
| 10 | Is our charter capital the same as our project capital? | A deliberate answer. Decree 96/2026, Art. 72(5), says charter capital need not equal the project’s investment capital |
C. Capital and cash movement (questions 11–14)
| # | Question | What a good answer contains |
|---|---|---|
| 11 | How does money enter, and through which account? | A funding plan under Circular 38/2026/TT-NHNN (in force since 18 August 2026, replacing Circular 06/2019). A company formed before its IRC may open a direct investment capital account before the IRC; until the IRC is issued the account may be used only to receive charter capital and interest, pay investment-preparation costs and return capital if the IRC is not granted (Art. 7(3)) |
| 12 | What must be escrowed or guaranteed? | A check against Law Art. 30. An escrow or bank guarantee is required where the State allocates or leases land or permits a change of land use, subject to listed exceptions. Failure to provide it is a termination ground (Art. 36(2)(e)) |
| 13 | What are the tax and incentive assumptions, and who has confirmed them? | Written confirmation, not an assumption in the model |
| 14 | How and when does cash leave Vietnam? | A repatriation route consistent with the account rules in question 11 |
D. Operating risk (questions 15–18)
| # | Question | What a good answer contains |
|---|---|---|
| 15 | Is the site secured, and what if we lose it? | Land title or lease status. Art. 36(2)(c) allows termination if the investor loses the right to use the site and does not apply to adjust the location within 6 months (land recovery is dealt with separately in point (đ)) |
| 16 | Is the project structured on real commercial substance? | Art. 36(2)(g) makes investment through a sham civil transaction a termination ground, on the basis of a court judgment or arbitral award (Decree 96/2026, Art. 68). Any arrangement that hides the true investor needs separate legal review |
| 17 | Who runs the entity locally, and who is accountable to the Board? | A reporting line, a local legal representative and a clear authority matrix |
| 18 | Which labour, compliance and licensing obligations apply to our sector? | A sector-specific register owned by a named person |
E. Exit and reversibility (questions 19–20)
| # | Question | What a good answer contains |
|---|---|---|
| 19 | What happens if the project stalls and the authority cannot reach us? | Awareness of Art. 36(2)(d): the project has been suspended, 12 months have passed since suspension and the authority cannot contact the investor or its legal representative. Decree 96/2026, Art. 67, sets a notice procedure. Keep the registered address and legal representative current |
| 20 | How do we leave, and what does termination do to land and assets? | Exit options and the rules on liquidation and land. Art. 36 refers land and attached assets to the land law |
Trade-offs the summary tables hide
Licence first or company first. Decree 96/2026, Art. 72, allows both, and the Law does not rank them. The considerations differ:
| Route | Advantage | Constraint |
|---|---|---|
| Licence first | A clear project record before a local entity exists; the entity formed afterwards becomes the investor under Art. 72(2) | No local entity during the process, which can complicate signing a lease or local contracts |
| Company first | A local entity early, which helps where a lease or counterparty must be signed first | The 12-month IRC clock starts (Art. 72(4)); no project implementation before the IRC; market-access conditions apply at formation |
In our experience the main considerations are the site and counterparty timetable, sector and location, and whether the project needs investment policy approval. This is a judgement on facts, not a recommendation without them.
Registered capital is not delivered capital. The eight-month data show that most licensed capital has still to be spent. The termination triggers in Art. 36 are the legal frame for that conversion. This is our reading, not a statistic.
What Boards often miss. The 24-month and 6-month periods in Art. 36 are statutory grounds, not guidance. Any milestone placed in the licence should be treated as a commitment the Board has approved.
Frequently asked questions
When did the new Law on Investment take effect?
Law 143/2025/QH15, passed on 11 December 2025, took effect on 1 March 2026. Article 7 and the conditional business lines list (Annex IV) have applied since 1 July 2026. Licences and valid dossiers from before 1 March 2026 follow the transitional provisions (Art. 52).
Can a foreign investor start operating before the IRC is issued?
No. Under Decree 96/2026/NĐ-CP, Art. 72(4), a company formed first may implement the investment project only after the IRC procedure is completed.
How long does a company formed first have to obtain the IRC?
12 months from its establishment (Decree 96/2026/NĐ-CP, Art. 72(4)).
When does Vietnam terminate an investment project?
Art. 36(2) of the Law lists the grounds. They include unmet objectives 24 months after the scheduled date where no permitted adjustment applies, loss of the site without a location adjustment within 6 months, and no contact with the investor 12 months after suspension. For projects needing investment policy approval, termination follows the approving authority’s opinion.
Should the Board rely on one forecast?
No. The World Bank (October 2026) forecasts 7.4% growth for 2026 and ADB (September 2026) forecasts 7.8%, after raising it from 7.2% in July; actual growth reached 9.01% in the first nine months. Test the investment case against more than one scenario.
About the author
ECOVIS Vietnam Law’s FDI, corporate governance and regulatory compliance advisory is led by Attorney Vu Manh Quynh, Managing Partner. ECOVIS Vietnam Law is the Vietnam member firm of ECOVIS International, which has over 19,000 people in more than 90 countries (global.ecovis.com, accessed 5 October 2026).
This article is general information as at 18 October 2026, not legal advice, and creates no lawyer-client relationship. Laws change; verify current requirements and obtain advice on your facts before acting.
Sources
- World Bank, Viet Nam Economic Update, press release, 15 May 2026 (2025 growth)
- World Bank, East Asia and Pacific Economic Update, press release, 6 October 2026
- Asian Development Bank, Asian Development Outlook, September 2026 (Developing Southeast Asia)
- National Statistics Office, nine-month socio-economic data, 3 October 2026 (as reported by VIR, VOV and Vietnam News)
- Law on Investment No. 143/2025/QH15 (passed 11 December 2025, Official Gazette No. 42 of 22 January 2026), Articles 7, 8, 19, 30, 35, 36, 52; Law No. 24/2026/QH16 (Annex IV from 1 March 2027)
- Decree No. 96/2026/NĐ-CP of 31 March 2026 (Official Gazette No. 215 of 15 April 2026), Articles 36, 67, 68, 72
- State Bank of Vietnam, Circular No. 38/2026/TT-NHNN of 31 July 2026 (Official Gazette No. 494 of 28 August 2026), Article 7
