Detailed regulations on market access restrictions for foreign investors in Vietnam under Decree No. 96/2026/ND-CP
On 31 March 2026, the Government of Vietnam promulgated Decree No. 96/2026/ND-CP ("Decree 96") providing detailed regulations and guidelines for the implementation of a number of articles of Law on Investment No. 143/2025/QH15 ("LOI"). Taking effect immediately upon its issuance, Decree 96 officially supersedes Decree No. 31/2021/ND-CP ("Decree 31") and the relevant amendments and supplementions thereto, marking a significant step forward in enhancing transparency in procedures and easing barriers in investment.
Decree 96 has addressed comprehensive provisions on the principles and methodologies for applying the List of business lines in which foreign investors are subject to market access restrictions. Furthermore, it clarifies regulations regarding investment guarantees, incentives, and support policies, alongside administrative procedures related to the implementation of investment projects.
Within the scope of this article, key highlights regarding market access restrictions for foreign investors, as stipulated in Articles 15 through 18 of Decree No. 96/2026/ND-CP, will be examined below.
1. Lists of business linesrestricted from market access
Pursuant to the LOI, the Government is mandated to enact and announce the Lists of business lines restricted from market access for foreign investors (the “Lists”).
Appendix I of Decree 96 specifies these Lists, which are categorized into:
- Section A: Business lines in which market access is not yet permitted for foreign investors;
- Section B: Business lines subject to conditional market access for foreign investors.
Compared to Decree 31, Decree 96 has narrowed the scope of business lines in which market access is not yet permitted for foreign investors by removing several business lines thereof into the business lines subject to conditional market access for foreign investors, specifically:
- Manufacturing and trading in weapons, explosive materials and supporting tools;
- Manufacturing military materials or equipment; trading in military equipment and supplies for the armed forces, military weapons, equipment, techniques, ammunitions, specialized military and police vehicles, components, spare parts, supplies and special equipment, and specialized technologies for manufacturing thereof.
This shift reflects a trend towards controlled market opening, creating conditions for foreign investors to gradually participate in sectors that were previously monopolized or highly restricted. This creates a foundation for attracting advanced technology and capital into defense and security-related supporting industries.
2. Publicity and updates of market access conditions
To assist investors in navigating the regulatory landscape, the Lists have been publicized and are regularly updated on the National Investment Information Portal (www.vietnaminvest.gov.vn ).
The published information includes:
- The business lines listed in Section A and Section B;
- The legal basis for the application of market access conditions applicable to foreign investors;
- Specific requirements that foreign investors must satisfy (e.g., ownership percentages, investment forms, investor’s capacity, etc.).
These provisions contribute to increasing transparency and consistency in legal application, while allowing investors to easily search for and assess market feasibility before making investment decisions.
3. Principles for applying market access restrictions
Decree 96 inherits the principles for applying market access restrictions for foreign investors from Decree 31. Accordingly, foreign investors which are foreign individuals, organizations established under foreign laws, or Vietnamese economic organizations with more than 50% of charter capital held by foreign investors must adhere to the following general principles:
1. Foreign investors are only restricted in business lines included in the Lists.
2. For business lines not included in the Lists (specifically, the List of business lines subject to Section B):
- If Vietnamese law provides none of specific restrictions: Foreign investors are permitted to access under the same conditions as domestic investors.
- If Vietnamese law provides specific restrictions: Foreign investors are required to comply with such relevant specialized laws.
3. Application for International Treaties
In the event of a conflict between domestic law and an international treaty on investment:
- If the treaty offers more favorable conditions, foreign investors are entitled to apply the treaty.
- If a foreign investor is subject to multiple international treaties: The investor will have the right to opt the most suitable market access conditions from one specific treaty. However, once chosen, the investor must fulfill all rights and obligations under that entire treaty throughout the duration of the project.
4. Regulations on capital ownership percentages of foreign investors
Decree 96 clarifies the methodology for determining capital ownership percentages when foreign investors contribute capital or purchase shares/portions of contributed capital in an economic organization, in particular:
- In case there are lots of foreign investors contributing capital and subject to different international treaties: The highest ownership percentage allowed among those treaties will be applied.
- In case some of foreign investors of the same nationality contribute capital in the same economic organization: The ownership percentage stipulated in the international treaty signed between Vietnam and that specific country will be applied.
- In case a foreign investor invests in a multi-sector economic organization with varying ownership caps: The ownership percentage corresponding to the sector with the lowest restriction (the lowest restriction) will be applied.
Separately, in the case of public companies and securities-related entities (e.g., securities companies, securities investment fund management companies, securities investment funds, or securities investment companies), where the law on securities provides otherwise regarding the capital ownership percentages of foreign investors, such law on securities will prevail.
Conclusively, a thorough understanding and accurate application of market access regulations will help foreign investors develop optimal investment strategies in the Vietnamese market.
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This article is reprinted from MUFG BizBuddy and is reproduced for informational purposes only.
