Author:
- Tran Phuong Nam – Lawyer
- Nguyen Thanh Hai – Paralegal
Vietnam is no longer merely an inbound foreign investment destination but is witnessing a strong shift whereby Foreign Direct Investment Enterprises (FDI) are using Vietnam as a strategic base to further expand into outbound investment activities. The trend of establishing subsidiaries, reallocating resources, or conducting cross-border M&A transactions is creating new challenges in capital flow management and legal structuring for FDI enterprises. Currently, the Law on Investment 2025 and Decree No. 103/2026/ND-CP have officially established a new legal framework which is more open but adopts a stricter supervisory and regulatory mechanism. However, in the context of strict control over outbound capital flows, Vietnamese law, besides creating a flexible investment framework, also establishes mechanisms to prevent transfer pricing practices and prevent money laundering. The article below from CDLAF’s legal team will provide further insights into this issue.
1. Legal framework and forms of outbound investment
In the context of global economic integration, many Foreign Direct Investment Enterprises (“FDI enterprises”) in Vietnam are increasingly expanding into international markets through the establishment of subsidiaries, capital contributions, or cross-border mergers and acquisitions (M&A) transactions.
These activities are currently governed mainly by the Law on Investment 2025 and Decree No. 103/2026/ND-CP on outbound investment. Under Article 39 of the Law on Investment 2025, investors are permitted to choose flexible forms of outbound investment, including: establishing economic organizations in accordance with the laws of the host country; contractual investment arrangements; capital contribution, purchase of shares or capital contributions in overseas economic organizations; and investment through securities, investment funds, or other intermediary financial institutions.
However, FDI enterprises may only conduct outbound investment activities upon satisfying all legal requirements relating to business sectors, foreign exchange control, and strict compliance with investment registration procedures.
2. Conditions for Outbound Capital Allocation by FDI Enterprises
Inheriting the provisions of Decree No. 31/2021/ND-CP, Article 6 of Decree No. 103/2026/ND-CP allows FDI enterprises to mobilize various lawful sources of capital and assets, including:
- Equity and borrowed capital in Vietnam remitted abroad;
- Profits derived from overseas investment projects for reinvestment;
- Lawful foreign currencies or Vietnamese Dong (subject to foreign exchange control regulations);
- Machinery, equipment, goods, intellectual property rights, technology, and other lawful assets in accordance with civil law regulations.
Notably, Decree No. 103/2026/ND-CP permits investors to use shares, capital contributions, or profits derived from investment projects in Vietnam as consideration in swap transactions when acquiring shares, capital contributions, or investment projects abroad. This provision creates a favorable legal basis for FDI enterprises to implement corporate restructuring, mergers, or cross-border M&A transactions.
Nevertheless, Vietnamese authorities continue to closely monitor outbound capital flows. To validly implement such transactions, enterprises must ensure:
- Completion of outbound investment procedures prior to conducting swap transactions;
- Determination of transaction value based on arm’s length and market-based principles;
- Strict compliance with regulations on taxation, anti-money laundering, anti-transfer pricing, and competition;
- For domestic loan capital sources, compliance with foreign exchange control requirements and foreign exchange transaction registration requirements with the State Bank of Vietnam.
3. Procedures for Outbound Investment in 2026
Decree No. 103/2026/ND-CP has categorized outbound investment procedures based on investment size and business sectors, thereby helping enterprises optimize compliance time and costs.
Case 1: Projects with outbound investment capital of less than VND 7 billion and not operating in conditional business sectors for outbound investment
Investors are exempt from the procedure for obtaining an Outbound Investment Registration Certificate (“Outbound IRC”). This regulation reflects a shift in management approach from pre-licensing control to post-licensing supervision through the banking system, thereby facilitating for FDI enterprises to implement overseas market expansion projects. The implementation steps include:
- Online application filing: Declare application information on the National Investment Information System to obtain an automatically issued project code (instead of submitting physical dossiers to the Ministry of Finance);
- Opening a capital account: Establish an outbound investment capital account at a licensed credit institution;
- Foreign exchange registration: Register foreign exchange transactions relating to outbound investment activities with the State Bank of Vietnam;
- Project execution: Carry out capital remittance and strictly comply with periodic reporting obligations.
Case 2: Projects with outbound investment capital of VND 7 billion or more, or projects operating in conditional outbound investment sectors
Enterprises are required to carry out procedures for obtaining an Outbound IRC from the Ministry of Finance. A valid dossier requires extensive supporting documentation and regulatory compliance, including: investment decision, documents proving financial capacity, written confirmation of tax compliance (issued within three (03) months prior to the submission date), and a detailed investment plan.
Within approximately 15 working days from receipt of a complete and valid dossier, the Ministry of Finance will review and issue the Outbound IRC. Only after obtaining the Outbound IRC may the investor proceed with opening the capital account, registering foreign exchange transactions, and remitting funds abroad.
4. Conclusion
The Law on Investment 2025 and Decree No. 103/2026/ND-CP have established a more open and flexible legal framework for the outbound expansion of FDI enterprises, particularly in relation to outbound capital allocation and asset swap mechanisms.
However, the line between legitimate investment structuring and compliance risks remains extremely narrow. As these activities are simultaneously governed by investment laws, foreign exchange regulations, and tax regulations, enterprises should adopt a strategy of preparing transparent documentation from the outset. In addition, investors should proactively review Double Taxation Avoidance Agreements between Vietnam and the investment-receiving country in order to optimize financial obligations once the project begins generating profits for repatriation to Vietnam, thereby ensuring an efficient and legally compliant transaction structure.
Time of writing: May 08, 2026
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