Conditional Business Lines in Vietnam: Licensing Guide

Vietnam regulates foreign investment through a statutory framework balancing economic openness with sectoral oversight. Under Law on Investment No. 143/2025/QH15 and Decree 96/2026/ND-CP, foreign capital enjoys open access across most industries. Entering conditional sectors, however, requires meeting statutory equity limits, market access checks, and post-incorporation sub-licensing.

Law on Investment No. 143/2025/QH15, passed in December 2025, has restructured the framework. Appendix IV now lists 198 conditional business lines, in force since July 1, 2026. For foreign sponsors planning direct investment, verifying whether a target activity falls into an open, conditional, or restricted category is fundamental to capital structuring.

For an overarching roadmap of corporate setup requirements across Vietnamese jurisdictions, review our advisory on corporate setup requirements in Vietnam.

Key Takeaways

• Open Baseline: Foreign investors receive national treatment across all economic sectors except sectors listed in Appendix I of Decree 96/2026/ND-CP. The conditions in Appendix IV of Law on Investment No. 143/2025/QH15 apply to domestic and foreign investors alike.
• Negative List Structure: Decree 96/2026/ND-CP Appendix I lists 23 sectors not yet open to foreign capital and 62 sectors open subject to market access conditions such as equity ceilings or partnership rules.
• 2026 Appendix IV: Law on Investment lists 198 conditional business lines in Appendix IV, effective July 1, 2026.
• Five Regulatory Forms: Statutory conditions take the form of sub-licenses, eligibility certificates, professional qualification credentials, written confirmations or approvals from a competent authority, or other requirements that apply without written confirmation (Law on Investment).
• Ex-Post Supervision: The Law on Investment empowers the Government to publish which conditional lines move from licensing and certification to published requirements managed by ex-post supervision.
• Sub-License Sequencing: Holding an Investment Registration Certificate (IRC) and Enterprise Registration Certificate (ERC) does not authorize commercial trading in conditional sectors; where a license or certificate is required, it must be secured before launch.

The Negative List: Market Access for Foreign Capital

Vietnam’s investment regime operates on an open-by-default principle: enterprises may conduct any business activity not prohibited by law. To administer foreign capital inflows, the government codified a negative list system under Decree 96.

Appendix I of Decree 96 establishes two schedules solely applicable to foreign investors:

1. Section A (Sectors Not Yet Open to Foreign Investors): Contains 23 fields where foreign investors have no market access. Examples include journalism and news gathering, sea fishing, investigation and security services, notarization and other judicial administrative services, and public postal services.
2. Section B (Conditional Market Access Sectors): Contains 62 sectors where foreign capital is permitted subject to specific conditions, which are published on the national investment portal (Decree 96). These criteria come from domestic sectoral legislation and international investment treaties.

For any economic field outside these 85 scheduled sectors, foreign investors are granted market access conditions identical to domestic enterprises.

How the Law Restricts Market Access

When entering a sector listed under Section B of Appendix I, foreign sponsors face three primary regulatory barriers:

• Foreign Ownership Ceilings (Equity Caps): Domestic laws and international treaties prescribe the maximum charter capital percentage foreign entities may hold. Ceilings differ by sector and are set by sector-specific laws and international treaties, for example in aviation, banking and telecommunications, under international commitments and the sector rules in force; investors should check the current conditions published on the national investment portal before fixing the equity structure.
• Investment Form Restrictions: Specific subsectors prohibit wholly foreign-owned enterprises (WFOEs), obligating foreign investors to form joint ventures or contractual business cooperation contracts (BCCs) with licensed Vietnamese partners.
• Geographical and Operational Constraints: Certain services restrict operating boundaries to designated industrial parks or impose statutory project terms.

Bypassing equity ceilings via nominee agreements creates serious legal risk, including the possibility that the transaction is declared void. See our analysis on legal representative liabilities and compliance risks.

Five Recognized Forms of Business Conditions

Under the Law on Investment, conditions governing conditional sectors must be promulgated in statutory legal instruments and must take one of five forms (Article 7.5, Law on Investment):

How to Check a VSIC Code Against the Market-Access List

Vietnam’s economic activity codes (VSIC) now come from Decision 36/2025/QD-TTg, effective 15 November 2025, which replaced Decision 27/2018/QD-TTg. Companies register their business lines at the four-digit level (Decree 168/2025/ND-CP).

The code alone does not show whether a foreign investor faces limits: Appendix I of Decree 96/2026/ND-CP names restricted sectors in words, not by code. Match the activity to that wording, then check the published conditions for the sector before filing. For example:

• 2431 (casting of iron and steel): no matching entry in Appendix I.
• 7710 (renting of motor vehicles): rental alone is not named; renting with a driver may count as road transport, so check the transport entries.
• 4651 (wholesale of computers, peripherals and software): not named, but check the Section B entry on trading activities of foreign service providers.

Legislative Reforms: Transition to Ex-Post Supervision

Vietnam is modernizing its administrative licensing model by scaling back upfront intervention and expanding post-licensing market monitoring.

The December 2025 Investment Law Amendments

In December 2025, the National Assembly passed Law on Investment, which replaces Law No. 61/2020/QH14. Its Appendix IV catalogues all conditional business lines across the Vietnamese economy and contains 198 entries.

The reform operates under a phased implementation timetable:

1. March 1, 2026: Law on Investment takes effect and replaces Law No. 61/2020/QH14, except for Article 7 and Appendix IV.
2. July 1, 2026: Article 7 and Appendix IV of Law on Investment take effect. Until then, the old Article 7 and Appendix IV of Law No. 61/2020/QH14 remain in force (Article 51).

How to Check Sectors Shifted to Ex-Post Governance

Under the Law on Investment, the Government publishes the list of conditional lines that need a license or certificate before operating, and the list of lines that move from licensing to published requirements managed by ex-post supervision. The conditions for each line in Appendix IV are published on the national business registration portal (Decree 96). Check your target activity against both before you file.

Sectors Under Strict Pre-Licensing

Many lines on the 198-line Appendix IV link directly to national security, financial stability, or public health, for example banking under the Law on Credit Institutions 2024, telecom infrastructure, mineral exploitation, education and pharmaceutical business. The Government publishes which lines still need a license or certificate before operation.

Sectoral Compliance: Entering a Conditional Business Line

Foreign investors establishing operations in an economic activity that remains conditional after the 2026 reforms must follow a structured two-stage regulatory pathway.

Stage 1: Investment Registration and Corporate Formation

Because conditional sectors require statutory entry reviews, foreign investment usually follows a dual-credential sequence:

1. Investment Registration Certificate (IRC): The investor submits project documentation via the National Investment Information System to the provincial Department of Finance (incorporating the former Department of Planning and Investment - DPI under Decree 150/2025/ND-CP) or Industrial Zone Management Board. Authorities check the project against the market access conditions and, where necessary, consult local agencies. The statutory deadline is 10 working days from a complete dossier (Article 39.3, Decree 96); projects that need investment policy approval follow the longer procedure in Decree 96.
2. Enterprise Registration Certificate (ERC): Following IRC approval, the enterprise files incorporation documents with the Business Registration Office to secure the ERC within 3 working days (Article 26.5, Law on Enterprises). Foreign investors may also incorporate first and obtain the IRC within 12 months; the project may start only after the IRC is issued (Decree 96).

For procedural documentation, review our detailed guide on the foreign company registration process in Vietnam.

Stage 2: Post-Incorporation Sub-Licensing and Operational Approvals

While the ERC establishes corporate legal personality, commercial operations in a conditional sector remain prohibited until operational permits are issued:

• Retail Distribution (Trading License): Foreign entities conducting B2C retail sales or opening stores must obtain a Trading License from the Provincial People’s Committee under Decree 342/2026/ND-CP (effective 18 October 2026). Establishing additional stores may trigger an Economic Needs Test (ENT) under the rules in force. Consult our guide on the Vietnam trading license for FDI retail and distribution.
• Corporate Digital Identity Activation: Following ERC issuance, the enterprise should register its corporate e-ID account on the VNeID platform under Decree 69/2024/ND-CP. The foreign legal representative needs their own personal e-ID account, issued in person with biometric capture, before registering it. See our guide on Vietnam corporate e-ID registration.
• Premises Approvals: Securing fire safety (PCCC) inspection certificates and the environmental procedures for the project’s scale before occupying commercial facilities.

Administrative Sanctions for Non-Compliance

Operating a conditional business activity without mandated sub-licenses or failing to maintain statutory operating standards constitutes an administrative violation under the sector-specific penalty decree for that industry. Penalties can include administrative fines, suspension of operations, and orders to rectify non-compliance. Furthermore, conducting commercial activities outside registered business lines can lead to orders to remedy the consequences. Input VAT of an investment project in a conditional line that does not yet meet the conditions is not refunded and is carried forward (Law on VAT 48/2024/QH15).

Structural Impacts on Corporate Entity Selection

Sectoral restrictions directly determine allowable corporate legal structures:

• Mandated Joint Ventures and Multi-Member LLCs: Where a foreign ownership ceiling applies (as in some sectors listed in Section B of Appendix I), foreign investors cannot establish a Single-Member LLC. The entity must be structured as a Multi-Member LLC or Joint Stock Company (JSC) with Vietnamese partners. See our guide on LLC governance structures for foreign investors.
• Comparative Entity Evaluation: Choosing between a wholly foreign-owned enterprise, a joint stock structure, or a joint venture balances capital needs against managerial control. See our comparative guide on LLC vs JSC vs representative office vs branch structures in Vietnam.
• Interim Market Presence (RO vs EOR): When sub-licensing requires extended timelines, foreign sponsors frequently establish a Representative Office for market research or engage an Employer of Record (EOR) to hire local teams without immediate corporate entity licensing. See our guide on Representative Office vs EOR in Vietnam.

Due Diligence Before Committing Capital

Foreign corporate sponsors should execute four due diligence checkpoints prior to capital allocation:

1. Verify VSIC Classification: Cross-reference planned commercial operations against the Vietnam Standard Industrial Classification (VSIC 4-digit codes) and compare them with Decree 96 Appendix I, Appendix IV of Law on Investment, and bilateral trade treaties (EVFTA, CPTPP, WTO). Sector-specific market access conditions are published on the national investment portal.
2. Prioritize Early Trademark Registration: Vietnam enforces a strict first-to-file trademark regime under the Law on Intellectual Property. Because conditional licensing reviews take months, third parties may register brand marks during the application period. Protect intellectual property assets before filing licensing dossiers by reviewing our guide on trademark registration in Vietnam.
3. Calibrate Capital Inflow Timelines: Foreign investors must fully inject 100% of registered charter capital within 90 days from ERC issuance (Articles 47.2, 75.2 and 113.1 of the Law on Enterprises 2020) through an official foreign investment capital account (formerly the Direct Investment Capital Account, DICA) under State Bank of Vietnam regulations. Because sub-licensing occurs post-ERC, capital contributions must be planned to prevent regulatory default. Review statutory rules in our guide to DICA capital account compliance.
4. Clarify Provincial Licensing Practices: While Appendix IV sets national rules, provincial authorities exercise discretion in assessing local zoning, labor parameters, and environmental suitability. Consulting local authorities during project feasibility prevents costly dossier delays.

Indochina Link Vietnam provides corporate advisory, market access feasibility assessments, and licensing representation for foreign-invested enterprises entering conditional sectors in Vietnam. Explore our company formation and licensing services or contact our legal advisory team to structure your market entry strategy.

This guide provides general regulatory analysis based on Law on Investment, Decree 96, and prevailing administrative decrees. It does not constitute formal legal counsel. Foreign investors should seek project-specific legal advice before committing investment capital.