List of Investment Sectors Banned in Vietnam

 Although investment is encouraged in Vietnam, there are sectors banned to invest in Vietnam which foreign investors need to be advised and considered when setting up business in Vietnam.

The list of investment sectors banned in Vietnam has been issued with Decree 108/2006/ND-CP dated September 22nd 2006 of the Government on guiding the implementation of some Articles in the Law on Investment.

I. The projects which are detrimental to national defense, national security and public interest

1. Production and processing of drugs

2. Investment in services that secretly investigating infringe upon the interests of the State, the legitimate rights and interests of organizations and individuals.

3. Investment in the fields of private detective and investigation.

II. The projects which are detrimental to the historical places, cultural, ethical, habits and customs of Vietnam

4. The projects built on the campus of the national historical and cultural places, projects that negatively affect the architecture and landscapes of national historical and cultural places.

5. Production of depraved and superstition cultural products.

6. Production of dangerous toys, educational harmful toys that affect to the character and health of children or to the security, social order and safety.

7. Prostitution business, trafficking in women and children.

8. Experimental reproductive cloning in humans.

III. The projects harmful to people’s health, destroying natural resources and destruction of the environment

9. Manufacturing of prohibited chemicals (contact ANT Lawyers for details) (according to the Convention).

10. Production of veterinary drugs, plant protection drugs that are banned or not permitted to use in Vietnam.

11. Production of medicines for human use, vaccines, biologicals, cosmetics, chemicals and pesticides, bacteria which are not permitted to use in Vietnam.

IV. The hazardous waste treatment projects brought from overseas into Vietnam, production of toxic chemicals or the use of toxic agents that are prohibited by the provisions of international treaties

12. The hazardous waste treatment projects brought from overseas into Vietnam, production of toxic chemicals or the use of toxic agents that are prohibited by the provisions of international treaties to which Vietnam is a member.

V. Other investment projects that are prohibited under the provisions of law.

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Conditional Investment Sectors and Investment Conditions in Vietnam

 When setting up a trading company in Vietnam, beside other conditions, the foreign investors have to prove experience in trading area. Areas such as banking, financial services, real estate, security services will require minimum investment. Foreign investment lawyers should be consulted for advice on investment licensing matters.

In general, foreign investors making investment in Vietnam are encouraged. However, there are areas although not prohibited, but are “conditional” areas including the project could affect national defense, security, social order and safety; finance and banking; field that affect public health; culture, information, press, publishing; entertainment services; the real estate business; prospecting, exploring and exploiting of natural resources, ecological projects and the environment; education and training, and professional services i.e. legal, accounting, tax…

The conditions required by Vietnam laws on investment toward the foreign investors are business requirements that the investor must meet after the incorporation of the company, not as a condition for receiving the investment license. However, in the case of a foreign investor applies for an investment license for a new project, the law requires that all business conditions must be satisfied before the grant of the investment license.

Conditions that the foreign investors have to meet when investing in conditional business could be related to the forms of the investment, the nationality of foreign investors, the professional expertise of the investor, the scale of investment projects, type of goods and services, time implementation of investment projects.

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Investment Sectors with Investment Conditions

 In general, foreign direct investment is encouraged in Vietnam because the economy growth is depending on the attraction of foreign direct investment. As member of WTO, Vietnam has opened up the economy and welcome investment in most of areas. There are non conditional investment areas and there are conditional investment areas. The conditions for investment varies from minimum capital, professional licenses of human resources, conditions of facilities, ownership ratio of local Vietnamese entities or person…When setting up a company in Vietnam, foreign investors need to be aware of investment sectors with conditions applied to foreign investors in Vietnam.

The investment conditions applicable to foreign investors with investment projects in the fields of investment provided with this list shall be in accordance with the provisions of the international treaties to which Vietnam is a member.

At ANT Lawyers, a law firm in Vietnam with offices in law office Hanoi, Da Nang and Ho Chi Minh City, our lawyers are available to assist clients in licensing and post-licensing matters to help clients with all questions and services in setting up company, and managing the compliance of the company or other form of business entities in Vietnam during the operation in Vietnam.

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