Vietnam’s Outward Investment Reform: Unlocking Private Capital

Vietnam is moving from a model reliant on foreign direct investment to one that envisions its domestic private sector as a key driver of cross-border expansion. Resolution No. 68-NQ/TW, issued in April 2025, highlights private enterprises as central to economic growth.

A core part of this strategy is the proposed reform of outward investment policies. Currently, companies must follow a restrictive pre-licensing system that can slow or complicate international ventures. The proposed ex post review model aims to simplify procedures and offer greater flexibility for private capital sourcing.

In today’s article, we will define outward investment and the private capital behind it, new challenges, and examine how the reform could strengthen Vietnam’s global business footprint.

Outward investment and the role of private capital

At present, outward investment is emerging as a key path for Vietnamese enterprises to deploy domestic capital abroad. To explore how outward investment works, we will break down the concept, examine the factors involved, and discuss the main ways private resources can enter the worldwide markets from Vietnam.

What is outward investment?

Definition of outward investment in Vietnam

Outward investment, also called Outward Foreign Direct Investment (OFDI), involves moving funds from Vietnamese organizations into foreign ventures.

A concrete example is VinFast, a Vietnamese electric vehicle manufacturer that established a manufacturing plant in Thoothukudi, Tamil Nadu, India in 2024. This US$2 billion investment⁽¹⁾ initially produces 50,000 units annually, with plans to expand to 150,000 cars. VinFast’s move has shown how Vietnamese companies are establishing a physical presence abroad to reach new customers and integrate into global supply chains.

More broadly, Vietnam’s total outward investment reached US$309.3 million⁽²⁾ in the first four months of 2025, more than triple the same period in 2024, with manufacturing, technology, and service sectors leading the expansion. The figure illustrates the growing trend of Vietnamese enterprises using private capital to explore more markets, diversify operations, and access advanced technologies.

Understanding private capital in outward investment

In the context of increasing outbound investment, private capital is resources coming from individuals, privately-owned companies, or investment firms rather than government agencies. These funds fuel domestic development, foster innovation, and are well-positioned to benefit from proposed reforms aimed at reducing pre-approval requirements for overseas projects.

Who can make an outward investment from Vietnam?

Investing in businesses in other jurisdictions is permitted for the following entities:

• Enterprises registered under the Law on Enterprises and the Law on Investment
• Cooperatives and cooperative unions established under Vietnamese law
• Credit institutions and other licensed financial organizations
• Household businesses operating within legal regulations
• Vietnamese individuals meeting specific legal requirements

These participants represent the primary sources of private capital for outward investment. Diversifying beyond government-owned enterprises positions the private sector as a central actor in international markets.

Common ways for Vietnamese entities to invest abroad

Private capital can move across borders through several clearly defined channels, each with its own purpose and legal framework:

Establishing overseas entities

Vietnamese companies may set up wholly owned subsidiaries, branch offices, or representative offices abroad. In this way, they can directly manage operations in target markets to serve local customers and adapt products to local preferences.

A notable case is TH Group’s dairy farming and processing project in Russia, valued at about US$190 million⁽³⁾. The investment delivered several key outcomes:

• Reduced reliance on imported dairy in the Russian market through local production
• Captured the growing demand for premium dairy products in Russia
• Positioned Russia as a base to access Eastern Europe and Central Asia
• Strengthened TH Group’s international brand presence in agribusiness
• Demonstrated the capacity of Vietnamese brands to deliver sustainable projects abroad

Entering business cooperation contracts

Cooperation contracts, or agreements, enable two or more parties from different countries to work together without forming a new legal entity. This approach facilitates the sharing of expertise, infrastructure, and market channels while keeping operations flexible.

Take FPT’s ecosystem development in Japan as an example. FPT announced a partner ecosystem, including NVIDIA, ASUS, and SCSK, to support its AI Factory expansion into both Vietnam and Japan⁽⁴⁾. The partnership model has helped FPT:

• Expand its footprint in Japan’s competitive tech market
• Gain access to further advanced AI technology
• Reduce upfront capital requirements for Japan’s market entry
• Elevate the global profile of Vietnamese technology enterprises

Acquiring equity or contributing capital to foreign companies

Another approach involves purchasing ownership stakes or injecting funds into established overseas companies. Returning to FPT, the corporation has also pursued market access by purchasing ownership stakes in established overseas companies. In 2018, it acquired a 90% interest in U.S.-based Intellinet Consulting⁽⁵⁾, allowing FPT to:

• Achieve immediate entry into the American technology market
• Leverage Intellinet’s existing client portfolio and consulting know-how
• Merge expertise to accelerate service development
• Cement its position as an international technology powerhouse in Vietnam

Investing in foreign securities or financial instruments

Enterprises and individuals can diversify their assets by purchasing bonds, stocks, or other instruments issued overseas. Through this method, Vietnamese investors can diversify portfolios, gain exposure to high-growth markets, and generate returns in foreign currency.

A recent example is when Vietnam’s Binh Son Refining and Petrochemical (BSR) made its first purchase of U.S. oil in 2025⁽⁶⁾, acquiring one million barrels of West Texas Intermediate (WTI) crude for November delivery. Although it is not a financial security per se, this move reflects how Vietnamese firms leverage international markets to hedge energy supply risk and optimize procurement costs.

Current framework for foreign investment from Vietnam

Before policy reforms take effect, Vietnamese private capital, particularly private equity, moving overseas must pass through a regulated and structured process. In the center of this process is the Certificate of Outward Investment Registration (OIRC), issued by the Ministry of Planning and Investment. Without it, an investment cannot proceed.

The requirements for outbound investment may be time-sensitive, but it is also the only legally valid path for Vietnamese enterprises for the moment:

Step 1: Confirm whether the project needs policy approval

The first step is to determine if the project requires clearance at the policy level. Large-scale projects, particularly those above VND 20,000 billion or involving sensitive sectors such as banking, insurance, securities, press, and broadcasting, may need approval from the National Assembly or the Prime Minister. Only after the approval can the investor move forward with the OIRC application.

Step 2: Apply for the OIRC 

Once the policy decision is secured, or if it is not required, the investor submits a dossier to the Ministry of Planning and Investment. The application typically includes:

• The investment registration form
• Proof of legal status
• A resolution from the investor’s governing body approving the project; and
• When applicable, confirmation of foreign currency availability from a licensed bank

*Note format* How to obtain the OIRC

Securing the OIRC involves the steps below:

• Submit the application: The investor files the complete dossier directly with the Ministry of Planning and Investment, which acts as the licensing authority.
• Respond to any supplementation request: The Ministry reviews the dossier within five working days. If documents are missing or incomplete, the investor must promptly provide them.
• Receive the OIRC or official refusal: For projects without a policy decision requirement, the Ministry issues the OIRC within fifteen working days of receiving a valid dossier. For projects with policy approval, the timeline shortens to five working days. Any refusal must be in writing and specify the reasons.

The Ministry reviews the application and, within fifteen working days for regular cases or five days for projects with policy approval, issues the OIRC or explains in writing why it was refused.

Step 3: Secure the host country’s approval

With the OIRC in hand, the investor turns to the target jurisdiction. Some countries require their own licenses or permits before operations can begin. Where this is the case, obtaining local approval is mandatory. If no such requirement exists, investors still need to retain documentation that demonstrates compliance with the host country’s laws.

Step 4: Open an outbound direct investment capital account in Vietnam

To manage the financial flow, the investor must open a dedicated capital account at a licensed commercial bank in Vietnam. All capital transfers for the overseas project, as well as repatriated profits, pass through this account per foreign exchange management rules.

Step 5: Open a project account in the host country

This account will receive funds from Vietnam and serve as the operational hub for payments, purchases, and other project activities, in line with the banking regulations of the host country.

Step 6: Register the foreign exchange transactions 

Before transferring any funds abroad, the investor registers all foreign exchange transactions related to the investment with the State Bank of Vietnam under Circular 12. Registration includes project details, account information, and the capital transfer schedule. The State Bank’s confirmation is required before capital can legally leave Vietnam.

Why the process remains crucial

The above steps define the baseline cost and time expectations for outward investment under current law. The procedures also explain why discussions about moving to an ex post review model have gained attention in 2025, since they would remove or narrow front-loaded licensing and rely more on reporting after investors secure host country approvals.

Please note that any change remains proposed at this stage, so investors should continue to structure plans around the OIRC pathway until the law is enacted.

The “Ex Post Review” model and its benefits

Vietnam’s Ministry of Finance has put forward a bold reform to remove pre-licensing requirements for outward investment and adopt an ex post review model.

The proposal represents a fundamental transition in governance, shifting from acting as a gatekeeper to serving as a facilitator. It is anchored in the belief that private capital is capable of responsible deployment and internationalized growth. Let’s delve into the potential these changes could bring to Vietnamese start-ups.

Unprecedented speed and agility

Under the existing system, enterprises must clear complex licensing before moving capital. However, the new model would allow private capital to flow once the investor secures the necessary approval in the host country, such as an investment license, business incorporation certificate, or capital contribution agreement. The investor shall then register the capital transfer with the State Bank, creating the conditions for much faster execution, letting companies seize opportunities and adapt to global supply chains with greater agility.

Significant reduction in administrative and financial burden

The removal of prior approvals cuts down paperwork, reduces multiple government touchpoints, and lowers legal costs. Both corporations and private equity funds save valuable time and resources. Hence, it allows management to focus on achieving investment outcomes instead of navigating bureaucracy.

Fostering entrepreneurial risk-taking

Lowering barriers to entry encourages more private capital to expand internationally. Startups and nimble private equity investors in particular benefit from being able to test global markets without being slowed down by excessive procedures. The process encourages innovation, increases competitiveness, and supports a more vibrant entrepreneurial ecosystem.

Building confidence and economic openness

An ex post mechanism sends a strong signal of trust from the government to the private sector. It demonstrates confidence in the judgment of entrepreneurs and institutional investors, reinforces investor trust, and aligns Vietnam with international standards. The approach strengthens the country’s reputation as an economy that welcomes private capital and promotes openness to the world.

The proposed reforms represent a clear statement of confidence in Vietnam’s private capital. By replacing the pre-licensing regime with an ex post review framework, the government shifts from control to facilitation. This signals trust in the ability of Vietnamese businesses to make sound decisions abroad.

For companies, the impact is immediate. Deploying private capital will be faster and far less costly. It also encourages deeper integration into global supply chains, where Vietnamese enterprises can expand into manufacturing, research, and distribution networks.

At a national level, these reforms bring wider benefits. The outward flow of private capital will diversify economic risk, generate new sources of foreign revenue, and reinforce Vietnam’s standing as a modern, market-driven economy. The bold proposal positions Vietnamese businesses not just as participants, but as influential drivers of the global economy.

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References:

(1) https://apnews.com/article/india-vinfast-ev-auto-vietnam-be8f2fd5a2adf1b502089de4652585e5

(2) https://en.vneconomy.vn/vietnams-overseas-investment-reached-309-3-mln-in-4m.htm

(3) https://van.nongnghiepmoitruong.vn/the-th-milk-project-in-russia-is-symbolic-of-vietnam-russia-economic-and-commercial-cooperation-d365089.html

(4) https://fpt.com/en/news/fpt-news/fpt-cong-bo-he-sinh-thai-doi-tac-phat-trien-nha-may-ai-tai-viet-nam-va-nhat-ban

(5) https://fpt.com/en/news/fpt-news/vietnam-s-fpt-buys-majority-stake-in-u-s-consulting-firm-intellinet

(6) https://www.reuters.com/business/energy/vietnam-makes-first-us-oil-purchase-2025-sources-say-2025-08-14/

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