Outbound investment activities of foreign-invested enterprises in Vietnam

The outbound investment activities of Vietnamese Investors have been increasingly growing and becoming a crucial strategy for expanding business scale and scope. According to data from the Ministry of Finance, in 2024, Vietnamese Investors implemented 164 new outbound investment projects and made 26 capital adjustment transactions. The total outbound investment capital reached nearly USD 664.8 million, marking an impressive growth of 57.7% compared to 2023. Notably, economic organizations with foreign direct investment in Vietnam (“FDI Vietnam”) have also actively engaged in outbound investment, contributing to expanding the presence of Vietnamese enterprises in international markets. 

Any organization or individual transferring investment capital from Vietnam abroad or utilizing profits generated from such capital for business activities overseas must comply with legal regulations on outbound investment. Therefore, FDI Vietnam undertaking outbound investments are also subject to these regulations. 

In cases where the Foreign Investor holds less than 50% of charter capital in an FDI Vietnam, outbound investment activities may be carried out under conditions similar to those applied to Vietnamese individuals and organizations. Conversely, if the Foreign Investor owns more than 50% of the charter capital, the FDI Vietnam must additionally comply with capital source conditions stipulated under Article 70 of Decree No. 31/2021/ND-CP, specifically as follows:  

• The outbound investment capital must originate from the owner’s equity and shall not include capital contributions made for investment activities in Vietnam.

• Owner’s Equity is a financial and accounting concept that refers to the net asset value attributable to the owners (investors) of a company, calculated as total assets (current and non-current) minus total liabilities. The Owner’s Equity must be reflected in the Audited Financial Statements of the FDI Vietnam for the last two years.

• Capital contribution for investment activities in Vietnam has not been clearly defined by investment laws. Therefore, depending on the consideration of the competent state authority, this capital amount is determined on a case-by-case basis. In our view, (i) in cases where the Foreign Investor invests to establish an enterprise and is granted an Investment Registration Certificate (“IRC”), the capital contribution for investment activities in Vietnam shall be equal to the project implementation capital stated in the IRC; (ii) in cases of investment through capital contribution, purchase of shares or equity stakes where there is no IRC, the capital contributed for investment activities within Vietnam will be equal to the charter capital stated in the Enterprise Registration Certificate (“ERC”).

• In cases of using additional capital contributions for outbound investment, the FDI Vietnam shall sequentially carry out the procedures for applying for the Outbound Investment Registration Certificate (“OIRC”), then proceed to increase its charter capital and fully contribute such capital in Vietnam before transferring the outbound investment capital. Some notes are as follows: 

• The procedure for applying for an OIRC is carried out similarly to other Vietnamese individuals and organizations as stipulated in Decree 31/2021/ND-CP. However, the Foreign Investor must commit to increasing the charter capital of the FDI Vietnam corresponding to the outbound investment capital and may be required to submit financial statements or other documents to prove the Foreign Investor’s capability to contribute additional capital.

• To increase the charter capital of the FDI Vietnam, the Foreign Investor shall only conduct procedures for adjust the increase in charter capital on the ERC, without adjusting the project implementation capital or investment capital on the IRC, as this capital contribution does not serve investment activities within Vietnam.

• The investment capital flow will be transferred in a specific sequence, complying with foreign exchange management regulations. The Foreign Investor transfers the increased charter capital through the Direct Investment Capital Account of the FDI Vietnam → transfers the capital to the payment account of the FDI Vietnam → transfers the capital to the Outbound Investment Capital Account of the FDI Vietnam for transfer to the host country. Outbound remittance shall only be carried out after completing the procedures for obtaining Confirmation of Registration for Foreign Exchange Transactions Related to Outbound Investment Activities at the State Bank branch where the FDI Vietnam has its head office.

Outbound investment activities by FDI Vietnam are a complex field, requiring strict compliance with legal regulations related to investment, foreign exchange, and administrative procedures. Therefore, enterprises need thorough preparation and should seek support from legal experts to ensure the investment process is smooth, transparent, and effective. 

See more:

1/ Applying for investment registration certificate for foreign investors not subject to investment policy approval

2/ Consequences for enterprises that do not comply with the obligation to submit investment supervision and assessment reports

3/ The conditions for foreign investors to be issued investment registration certificate

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