Proposal to remove foreign investment licensing procedures and replace them with other methods

Abolish or simplify foreign investment procedures

Two options are being discussed, one is to abolish foreign investment procedures and switch to foreign exchange management, and two is to simplify foreign investment procedures.

By the end of June 2025, Vietnam had 1,916 valid foreign investment projects, with a total investment capital of more than 23 billion USD.

In option 1, the specific abolishment procedures are the procedures for approving foreign investment policies under the authority of the National Assembly and the Prime Minister; the procedures for granting foreign investment registration certificates under the authority of the Ministry of Finance .

Instead, investors register with the State Bank of Vietnam about transferring money abroad.

In option 2, the procedure for approving foreign investment policies (authority of the National Assembly and the Prime Minister) will be abolished. The scope of projects that must carry out procedures for granting a Certificate of Registration for Foreign Investment will be narrowed down, in the direction of only applying to projects with investment capital of VND 20 billion (about USD 760,000) or more. For projects with a scale of less than VND 20 billion, it is only necessary to register foreign exchange transactions with the State Bank to transfer money abroad.

In addition, there is also option 3 which is to keep the regulations as they are.

In the Draft Policy Statement of the Investment Law (replacement), the Ministry of Finance chooses option 1, for the following reasons.

Firstly, the management of foreign investment activities will be more realistic. Especially when investors register with the State Bank of Vietnam, investors already have foreign investment approval documents (investment license/business establishment certificate/capital contribution contract/share purchase in foreign companies...). At that time, investment activities will be more "certain" and "authentic".

This plan will cut down on many administrative procedures, save time and costs for investors, contribute to promoting and increasing the competitiveness of Vietnamese enterprises, create conditions for investors to access investment opportunities abroad more quickly, contribute to expanding the market, developing raw material areas for domestic production, contributing to the country's economy, especially in the current conditions of rapid technological development.

This is also a way to improve state management through foreign exchange management. The State Bank will quickly compile statistics and check the implementation of investment capital and the transfer of money back to the country through the banking system to promptly assess and adjust when there is an impact on the balance of payments/foreign exchange reserves; the banking system has tools to promptly handle cases of non-compliance with regulations on reporting regime (such as temporarily suspending money transfers, freezing investment capital accounts in emergency cases...).

Currently, the Investment Law stipulates that the scope of management of the agency issuing the Certificate of registration for overseas investment is quite broad, covering all overseas investment activities (objectives, scale, location, scope of operation, total investment capital, etc.).

This regulation is unclear about the state management objective (management of capital transferred abroad or the entire project activities), and is also not feasible because investment activities abroad must comply with the laws of the investment receiving country.

The Ministry of Finance analyzed that the State Bank is currently the agency managing indirect investment abroad. Therefore, the State Bank's management of direct investment abroad is appropriate to grasp the overall capital source of Vietnam invested abroad.

In addition, the State Bank's confirmation of capital transfer activities abroad for investment will also support the work of preventing money laundering more conveniently and effectively.

Inadequacies in foreign investment procedures

In fact, besides the positive aspects, foreign investment procedures have given rise to some shortcomings in the management process of state agencies as well as implementation by investors.

The main point is when investors use their private capital to make overseas investments and comply with the laws of the host country.

However, the Vietnamese state agencies have approved many contents of the project regarding "form, scale, location, progress of investment project implementation, foreign investment capital, capital sources" which are not really reasonable, affecting the freedom of business of enterprises and investors; not clearly distinguishing the contents under the scope of regulation of Vietnamese law and the contents under the jurisdiction of the law of the country receiving the investment.

In essence, the ultimate goal of investors is to transfer money abroad (foreign exchange transactions) to carry out investment and business activities abroad.

In addition, these overseas investment procedures are difficult to bind investors' responsibilities after they have completed transferring money abroad. In addition, continuing to maintain the current overseas investment management mechanism is no longer appropriate because it hinders and limits investors' ability to seize overseas investment opportunities.

Many countries in the world only implement a regime of controlling the flow of money transferred abroad to carry out investment activities and have policies to prohibit or restrict money transfers abroad in certain cases to ensure macroeconomic balance as well as the legality of money sources, without managing all investment activities abroad because these activities are carried out in the country receiving the investment and must comply with the laws of that country.

Currently, only Vietnam, Laos, and Indonesia still issue certificates of registration for overseas investment. China issues these certificates, only for large projects and certain sectors. Other countries have switched to a mechanism for investors to declare and register their investment capital transferred abroad with the banking system when carrying out investment and business activities abroad.

By the end of June 2025, Vietnam had 1,916 valid foreign investment projects with a total investment capital of more than 23 billion USD.
Of which, the project portion has an investment capital scale of less than 20 billion VND, accounting for 67.4% of the total number of projects, but has a small proportion of capital (about 1.7% of total foreign investment capital).
The number of projects with investment capital of over 20 billion VND is about 28% of the total number of projects, but accounts for the majority of capital (about 98.3% of total foreign investment capital).
The rest are small projects under 1.2 billion VND (equivalent to 50,000 USD).
These projects are all subject to approval by the Prime Minister or issuance of a Certificate of Registration for Foreign Investment.
In addition, to date, there have been no recorded overseas investment projects under the National Assembly's authority to approve investment policies.

Source: https://baodautu.vn/de-xuat-bo-thu-tuc-cap-phep-dau-tu-ra-nuoc-ngoai-thay-bang-phuong-thuc-khac-d358584.html