NATIONAL ASSEMBLY
No. 59-2005-QH11
LAW
ON
SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
INVESTMENT
Pursuant to the 1992 Constitution of the Socialist Republic of Vietnam as amended by
Resolution 51-2001-QH10 passed by Legislature X of the National Assembly at its 10th Session
on 25 December 2001;
This Law regulates investment activities.
CHAPTER 1
General Provisions
Article 1 Governing scope
This Law regulates investment activities for business purposes; the rights and obligations of
investors; the guarantee of lawful rights and interests of investors; encouragement of investment
and investment incentives; State administration of investment activities in Vietnam and offshore
investment from Vietnam.
Article 2 Applicable entities
1. Domestic investors and foreign investors carrying out investment activities within the
territory of Vietnam; offshore investments made from Vietnam.
2. Organizations and individuals involved in investment activities.
Article 3 Interpretation of terms
In this Law, the following terms shall be construed as follows:
1. Investment means the use of capital in the form of tangible or intangible assets for the
purposes of forming assets by investors to carry out investment activities in accordance
with the provisions of this Law and other provisions of the relevant laws.
2. Direct investment means a form of investment whereby the investor invests its invested
capital and participates in the management of the investment activity.
3. Indirect investment means a form of investment through the purchase of shares, share
certificates, bonds, other valuable papers or [investment through]1 a securities investment
fund and through other intermediary financial institutions and whereby the investor does
not participate directly in the management of the investment activity.
1 Phillips Fox Note: Words not appearing in the Vietnamese text have been inserted in square parentheses to aid
comprehension.
© Phillips Fox Translation
4. Investor means any organization or individual carrying out investment activities in
accordance with the law of Vietnam, comprising:
(a) Enterprises from all economic sectors established in accordance with the Law on
Enterprises;
(b) Co-operatives and co-operative groups established in accordance with the Law on
Co-operatives;
(c) Enterprises with foreign owned capital established prior to the date of effectiveness
of this Law;
(d) Business households, individuals;
(dd) Foreign organizations and individuals; Vietnamese residing overseas; foreigners
permanently residing in Vietnam;
(e) Other organizations as permitted by the law of Vietnam.
5. Foreign investor means any foreign organization or individual using capital in order to
carry out an investment activity in Vietnam.
6. Enterprises with foreign owned capital comprise any enterprise established by a foreign
investor in order to conduct investment activities in Vietnam; or a Vietnamese enterprise
in which a foreign investor purchases shares, [with which it] merges or which it acquires.
7. Investment activity means activities of investors throughout the investment process,
comprising the stages of investment preparation, performance and management of the
investment project.
8. Investment project means a collection of proposals for the expenditure of medium and
long-term capital in order to carry out an investment activity in a specific geographical
area and for a specified duration.
9. Invested capital means the money and other lawful assets used to carry out the
investment activity either in the form of direct investment or indirect investment.
10. State capital means capital for investment and development funded from the State
Budget, capital funded by credit facilities guaranteed by the State, capital funded by credit
facilities for investment and development of the State, and other investment capital of the
State.
11. Investment owner means an organization or individual being a capital owner, a person
representing an owner or a borrower which directly manages and uses capital in order to
carry out an investment activity.
12. Foreign investment means the remittance of capital in cash or other lawful assets by
foreign investors into Vietnam in order to carry out investment activities.
13. Domestic investment means the use of capital in cash or other lawful assets by domestic
investors in order to carry out investment activities in Vietnam.
© Phillips Fox Translation
2
14. Offshore investment means [investment where] investors send overseas their capital in
lawful cash or other assets from Vietnam in order to carry out investment activities.
15. Sector in which investment is conditional means a sector in which investment shall only
be permitted subject to specific conditions as stipulated by law.
16. Business co-operation contract (BCC) means the investment form signed between
investors in order to co-operate in business and to share profits or products without
creating a legal entity.
17. Build-operate-transfer contract (BOT) means the investment form signed by a competent
State body and an investor in order to construct and operate commercially an
infrastructure facility for a fixed duration; and, upon expiry of the duration, the investor
shall, without compensation, transfer such facility to the State of Vietnam.
18. Build-transfer-operate contract (BTO) means the investment form signed by a competent
State body and an investor in order to construct an infrastructure facility; and, upon
completion of construction, the investor shall transfer the facility to the State of Vietnam
and the Government shall grant the investor the right to operate commercially such facility
for a fixed duration in order to recover the invested capital and gain profits.
19. Build-transfer contract (BT) means the investment form signed by a competent State
body and an investor in order to construct an infrastructure facility; and, upon completion
of construction, the investor shall transfer the facility to the State of Vietnam and the
Government shall create conditions for the investor to implement another project in order
to recover the invested capital and gain profits or to make a payment to the investor in
accordance with an agreement in the BT contract.
20. Industrial zone means a zone which specializes in the manufacture of industrial products
and the provision of services for industrial manufacture, which has defined geographical
boundaries and which is established in accordance with regulations of the Government.
21. Export processing zone means an industrial zone which specializes in the manufacture of
export products and the provision of services for the manufacture of export products and
export activities, which has defined geographical boundaries and which is established in
accordance with regulations of the Government.
22. High-tech zone means a zone which specializes in research, development and
application of high technologies and which provides a centre for fostering high-tech
enterprises, for training human resources in high technologies and for manufacturing and
trading high-tech products, which has defined geographical boundaries and which is
established in accordance with regulations of the Government.
23. Economic zone means a zone which has an economic area separated from the general
investment and business environment and with specially favourable conditions for
investors, and which has defined geographical boundaries and which is established in
accordance with regulations of the Government.
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