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84 business lines restricted for foreign investors in Vietnam
Not all business lines could be freely accessed by foreign investors when they conduct their business in Vietnam.
Accordingly, foreign investors must face certain restrictions for business lines with prohibited market access or restricted market access. Below are lists of such 84 business lines restricted for foreign investors in Vietnam.
Business lines with prohibited market access
Business lines with prohibited market access are those currently under the control of the Government and not yet allowed for foreign investors’ investment. The reasons for the restrictions are the influence and relation of these business lines to the country’s finance, social economy, security – national defense.
Here are 25 business lines with prohibited market access
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Trade in goods and services on the list of goods and services under the state’s monopoly:a) Goods, services serving national defense and security;b) Manufacturing, trading, export/import, temporary import, re-export or transit of industrial explosives;
c) Manufacturing of gold bullions; d) Export/import of gold as materials for manufacturing of gold bullions; e) Release of lottery tickets; f) Import of cigarettes and cigars (except import thereof for trading of duty-free goods); g) Management, import, export, purchase, sale, preserve and protection of goods on the list of national reserves; h) Printing and casting of currency; i) Issuance of postage stamps of Vietnam; j) Manufacturing, export/import, trading, transportation or storage of fireworks and firework-related services; k) Transmission, dispatching of national power system; Construction and operation of multi-purpose hydropower and nuclear power projects particularly important to the economy and society; l) Public services to ensure maritime safety (Operating the sea light system; Operating the system of public navigational channels); m) Managing, operating and exploiting the system of coastal radio stations, coastal public information services; n) Flight operations assurance (Air traffic services; Aviation information services; Search and Rescue services); o) Managing and operating the national and urban railway infrastructure systems invested by the State; not including the maintenance of railway infrastructure; p) Managing and exploiting in case of assignment of plans for inter-provincial and inter-district irrigation and agricultural works system; sea embankment; q) Providing forestry services in special-use forests (except for landscape protection forests that are leased by the State to economic organizations for forest protection and development, combined with landscape, resort, eco-tourism business); r) Publication (excluding printing and distribution activities); s) Managing, maintaining and exploiting the public postal network; t) Providing public services in press distribution activities. |
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Press activities and collection of news in any shape or form |
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Catching or harvesting marine life |
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Investigation and public security services |
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Administrative and judicial services, including:
a) Judicial assessment services b) Bailiff services c) Property auction services d) Notary services e) Official receiver’s services |
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Service of sending workers to work abroad under contract |
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Investment in construction of cemeteries for transfer of land use right and infrastructure thereon |
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Direct collection of garbage from households |
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Public survey services |
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Blasting services |
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Manufacture, sale of weapons, explosive materials and combat gears |
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Import, dismantlement of used seagoing ships |
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Public postal services |
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Merchanting trade of goods |
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Temporary import for re-export of goods |
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Conducting the right to export, right to import and right to distribute for goods on the list of goods that foreign investors and foreign-invested economic organizations are not allowed to conduct the right to export, right to import and right to distribute:Cigarettes and cigars, books, newspapers and magazines, video articles, precious metals and gemstones, pharmaceuticals, explosives, crude and processed oils, rice, cane and beet sugar are excluded from the scope of commitment. |
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Collection, purchase, handling of public property at armed force units |
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Manufacture of military materials or equipment; trading in military equipment for the armed forces, military weapons, technical equipment, weapons, military and police special-use vehicles, components, parts, spare parts, supplies and special equipment, specialized technology to produce them. |
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Industrial property representative services and intellectual property assessment services |
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a) Services of establishing, operating, maintaining and servicing maritime signaling systems, water regions, water areas, public navigational channels and navigational routes;
b) Services of surveying water regions, water areas, public navigational channels and navigational routes serving the issuance of nautical notifications; c) Services of surveying, constructing and publishing the nautical charts of water regions, water areas, public navigational channels and navigational routes; d) Developing and publishing maritime safety documents and publications. |
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Regulatory services to ensure maritime safety in water regions, water areas and public navigational channels; electronic marine information service |
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a) Inspection services (testing, experiment) and issuance of certification for means of transport (including systems, equipment and components of vehicles);
b) Inspection services and issuance of certification of technical safety and environmental protection for specialized vehicles, specialized equipment, containers, and equipment for packing dangerous goods in transportation; c) Inspection services and issuance of certification of technical safety and environmental protection for means and equipment for oil and gas exploration, extraction and transportation at sea; d) Technical inspection service for occupational safety for machines and equipment with strict requirements on occupational safety installed on transport vehicles and equipment for oil and gas exploration, extraction and transportation at sea; Registration and inspection of fishing vessel service. |
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Services of investigation, assessment and exploitation of natural forests (including exploitation of woods and wild, rare and precious animals hunting and trapping, micro-bial plant, animal genetic resource in agriculture). |
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Researching or utilizing genetic resources of new livestock breeds before being appraised by the Ministry of Agriculture and Rural Development. |
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Travel services, except international travel services for inbound tourists. |
Business lines with restricted market access
Business lines with restricted market access, or conditional business lines are those in which investment must satisfy certain conditions for reasons of national defense and national security, social safety, social ethics, or public health.
59 Business lines with restricted market access
Currently, the law of Vietnam provides 59 business lines with restricted market access, including:
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Manufacture and distribution of media products, including video recordings |
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Manufacture, distribution, broadcasting of TV programs, stage performances and cinematic works |
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Provision of audio and television broadcasting services |
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Insurance; banking, securities trading and relevant services |
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Postal and telecommunications services |
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Advertising services |
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Printing and publishing services |
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Geodesy and cartography services |
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Aerial photographing services |
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Education services |
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Survey, extraction and processing of natural resources, minerals, and petroleum |
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Hydropower, offshore wind power and nuclear power |
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Transport of goods and passengers by rail, air, road, river, sea, pipeline |
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Aquaculture cultivation or breeding |
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Forestry and hunting |
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Betting and casino business |
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Guard services |
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Construction, operation and management of river ports, seaports and airports |
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Real estate business |
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Legal service |
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Veterinary services |
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Trade in goods and activities directly related to trade in goods of foreign service providers in Vietnam |
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Technical analysis and inspection services |
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Tourism services |
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Health and social services |
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Sports and entertainment services |
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Paper production |
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Manufacture of vehicles with more than 29 seats |
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Development and operation of traditional markets |
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Operation of Goods Exchanges |
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Domestic LCL collection services. |
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Audit, accounting and tax services. |
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Valuation services; valuation of enterprises serving equitisation. |
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Services related to agriculture, forestry and fishery. |
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Aircraft manufacturing. |
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Manufacture of railway locomotives and wagons. |
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Trading tobacco products, tobacco raw materials, and specialized machinery and equipment for the tobacco industry. |
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Publishers’ activities. |
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Ship building, and repair services. |
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Waste collection services, environmental monitoring services. |
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Commercial arbitration services, arbitration mediation services. |
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Logistics services |
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Coastal transport services |
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Cultivating, producing or processing rare or precious plants, breeding or husbandry of precious or rare wild animal and processing of those plants or animals, including both living animals and processed matter taken from animals; |
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Manufacture of building materials |
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Construction and the relevant technical services. |
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Assembling of motor vehicles. |
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Services related to sports, fine arts, performing arts, fashion shows, beauty and modeling contests, and other entertainment and recreational activities. |
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Air freight support services; ground technical services at airports and airfields; on-board catering services; navigational information services, and aviation meteorological services. |
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Shipping agency services; ship towing service. |
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Services related to cultural heritage, copyright and related rights, photography, video recording, sound recording, art exhibitions, festivals, libraries, museums; |
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Services related to tourism publicity and promotion. |
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Representation, recruitment, scheduling, management services for artists and athletes. |
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Family-related services. |
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E-commerce activities. |
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Cemetery business, cemetery services and burial services. |
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Aerial seed planting and aerial chemicals spraying and dusting service. |
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Marine pilotage services; |
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Investment sectors under the pilot mechanism of the National Assembly, the Standing Committee of the National Assembly, the Government and the Prime Minister. |
Notes
Market access conditions applied to foreign investors specified in the List of business lines with restricted market access include:
- Ratio of the foreign investor’s charter capital in a business entity.
- Investment method.
- Scope of Investment.
- Capacity of the investor; partners participating in the investment activities.
- Other conditions specified in the Laws and Resolutions of the National Assembly, Ordinances and Resolutions of the Standing Committee of the National Assembly, Decrees of the Government and international agreements to which the Socialist Republic of Vietnam is a signatory.
Market access conditions for some business lines
Advertising services
According to Schedule CLX – Viet Nam, Part II – Schedule of Specific Commitments in Services List of Article II Most Favourite Nation Exemptions, the market access conditions for Advertising services (CPC 871, excluding advertising for cigarettes) are as follows:
“Upon accession, foreign service suppliers are permitted to establish joint venture or business cooperation contract with Vietnamese partners who are legally authorized to do advertising services.
Upon accession, joint venture shall be allowed with foreign capital contribution not exceeding 51% of the legal capital of the joint venture. As of 1 January 2009, there shall be no limitation on foreign capital contribution in the joint ventures.”
As such, if foreign investors wish to establish companies operating in advertising services, said investors are not allowed to establish companies with 100% foreign capital contribution and must opt for joint ventures instead. Here are the two methods by which joint ventures could be established in this situation:
- Establish joint ventures with other enterprises: two or more enterprises shall contribute a part of their assets, rights, obligations, and legal benefits to form a new enterprise.
- Business cooperation contract (BCC): contracts signed by investors for business cooperation, to division of profits, products in accordance with the laws without establishing an economic entity.
Regarding the ratio of the investor’s charter capital in a joint venture, from January 01st, 2009 onward, the limit on the ratio of foreign investor’s charter in a joint venture is lifted. This means the capital contribution of foreign investors in a joint venture might reach 99.99%.
Logistics service business
Container handling services, excluding services provided at airports (part of CPC 7411) under Services auxiliary to all modes of transport
According to Schedule CLX – Viet Nam, Part II – Schedule of Specific Commitments in Services List of Article II Most Favorite Nation Exemptions, the market access conditions for Container handling services, except services provided at airports (part of CPC 7411), which belong to Services Auxiliary to all Modes of Transport.
“Upon accession, foreign service suppliers are only permitted to provide services through the establishment of joint ventures with Vietnamese partners with the capital contribution of foreign side not exceeding 50%”
Therefore, if foreign investors want to conduct business in the above service, such action could only be done via joint venture with Vietnamses partners, provided that the foreign capital contribution is ≤ 50% of the total capital contribution within the joint venture.
Joint venture by foreign investors could take the following forms
- Establishment of joint venture
- Business cooperation contract
- Capital contribution/ purchase of stocks, shares from Vietnamese enterprises.
Road transport service
According to WTO Agreements, the market access conditions for Road Transport service are:
Foreign investors who want to conduct business in road transport service could do so under the form of joint venture, provided that said investors’ capital contribution is ≤ 51 % of the capital contribution within the joint venture.
- Business cooperation contract.
- Establishment of joint venture.
- Capital contribution/ purchases of stocks, shares from Vietnamese enterprises
However, foreign investors should note that when operating in this services, 100% of enterprise’s drivers must be Vietnamese citizen.
Construction services and related engineering services
According to Schedule CLX – Viet Nam, Part II – Schedule of Specific Commitments in Services List of Article II Most Favorite Nation Exemptions, the market access conditions for construction services and related engineering services are as follows:
“For the period of 2 years from the date of accession, 100% foreign-invested enterprises could only provide services to foreign-invested enterprises and foreign-funded projects in Vietnam
Foreign enterprises have to be juridical persons of a WTO Member.
After 3 years from the date of accession, branching is allowed.”
Pertaining to the above specification, if foreign investors wish to establish companies operating in construction services and related engineering services, members of such companies must be juridical persons (organization) of a WTO Member. Members of these companies can’t be individuals.
As provided above, there are 84 business lines restricted for foreign investors in Vietnam. If you need any support or have any questions, please contact us through the information below to receive timely replies.
ANot all business lines could be freely accessed by foreign investors when they conduct their business in Vietnam. <br><br>Accordingly, foreign investors must face certain restrictions for business lines with prohibited market access or restricted market access. <br><br>Below are lists of such businesses..
Business lines with restricted market access
Business lines with restricted market access, or conditional business lines are those in which investment must satisfy certain conditions for reasons of national defense and national security, social safety, social ethics, or public health.
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