Update on the Potential Removal of Vietnam’s Overseas Investment Licensing

Vietnam’s Ministry of Finance is proposing a change that could make life much easier for local businesses looking abroad. The plan is simple yet significant: remove the need for government-issued overseas investment licensing. Instead of going through layers of approval, companies would only need to register their capital transfers with the State Bank of Vietnam.

For startups, this could mean less time spent on paperwork and more time focusing on entering new markets. It also signals a strong push from the government to create a friendlier, more competitive environment for Vietnamese enterprises on the global stage. In today’s article, we will explore what this proposal means for startups, the opportunities it could unlock, and the challenges that may still lie ahead.

The current overseas investment framework of Vietnam

For years, Vietnamese businesses seeking to invest abroad have faced a highly centralised licensing system. Depending on the project’s size and sector, approval must come from one of three authorities: the National Assembly, the Prime Minister, or the Ministry of Finance. In addition, the requirement applies even to smaller ventures, including those initiated by startups aiming to establish an overseas presence.

At present, the outbound investment licensing process is thorough, but not timely enough. It involves preparing detailed investment dossiers, securing multiple levels of review, and meeting strict compliance checks before a licence is granted. According to the Ministry of Planning and Investment, these steps can take several months, especially for projects requiring high-level approval. While designed to ensure proper oversight and protect national interests, the process partly discourages entrepreneurs who need agility to compete internationally.

In the case of startups, the impact is particularly acute. Delays in licensing result in missed market opportunities, disrupt partnership timelines, and reduce competitive advantages. In fast-moving industries such as technology, consumer products, and digital services, a few months’ delay can mean losing ground to international competitors. Furthermore, the costs of preparing applications and navigating procedures can be substantial for small firms operating on limited budgets.

That said, the current framework is not without its merits. The rigorous approval process helps foster transparency and reduces the risk of overseas capital misuse. It also enables the government to monitor foreign exchange flows and safeguard macroeconomic stability. These safeguards have been particularly relevant during periods of global market volatility.

However, the Ministry of Finance recognises that the balance between control and flexibility needs adjustment. To achieve this, the solution is shifting away from mandatory overseas investment licenses toward a simpler capital registration system.

Proposed regulatory shift and its rationale

Under the new approach, once an investor receives the necessary foreign investment approval under existing laws, the only remaining step would be to register the capital transfer with the State Bank of Vietnam.

Possible motivations behind the reform

Although the Ministry has not officially listed specific objectives, the nature of the change suggests several possible aims. These include improving the efficiency of procedures, reducing the paperwork and institutional overlap caused by multiple approvals, and creating a more supportive environment for enterprises to invest abroad. Such outcomes would align with Vietnam’s broader ambition to enhance its competitiveness and integration into global markets.

The two systems in comparison

Under the existing framework, investors must secure an investment registration certificate before transferring capital, open and manage dedicated capital accounts, and comply with detailed foreign exchange regulations. This structure is rather complex and time-consuming, particularly for smaller companies and startups that rely on speed to capture opportunities.

Moving to a capital registration system would consolidate it into one single step with the State Bank. If implemented effectively, the reform could help position Vietnamese enterprises, especially young and agile firms, to compete more successfully on the international stage.

Opportunities the change could create for startups

Vietnam’s plan to remove the overseas investment licensing step is offering new doors for entrepreneurs aiming to grow beyond the domestic market.

Faster market entry

Vietnam’s outbound investment reached US$664.8 million in 2024, with 164 new projects and 26 capital adjustments, a surge of 57.7 percent⁽¹⁾compared to the previous year.

By removing licensing bottlenecks, ventures can move from domestic approval to international capital deployment more swiftly, a critical edge in dynamic markets like Laos, Indonesia, and India, which accounted for 28.8 percent, 20.7 percent, and 13.5 percent⁽²⁾ of outbound investment, respectively, in the same period.

Lower operating costs

Consolidating the approval process reduces the need for extensive documentation and third-party advisory fees, which is especially relevant for startups expanding into compliance-heavy regions. Although we lack direct figures on cost savings, finance and legal services in markets like the U.S. or Australia often come with prohibitive expenses, savings you redirect toward product development or market entry.

Stronger global presence

Vietnamese firms are making waves abroad. For instance, Hoang Anh Gia Lai Group has invested approximately US$1 billion in Laos⁽³⁾, alongside significant stakes in Cambodia, Myanmar, and Thailand.

Moreover, the Ministry of Finance’s Foreign Investment Agency (FIA) has reported that in the first half of 2025, Laos received the most Vietnamese outbound capital, totaling US$150.3 million⁽⁴⁾. The Philippines and Indonesia followed with US$61.8 million and US$60.5 million, respectively.

Reducing barriers to capital transfers may allow startups to consolidate their presence in familiar markets while accelerating entry into new global arenas.

Broader outbound and inbound opportunities

By June 2025, Vietnam had 1,916 valid foreign investment projects abroad, with over US$23 billion in registered capital⁽⁵⁾. More agile regulations could drive higher outbound activity from small and medium enterprises. In addition, the proposed update can be a signal to international investors that Vietnam is committed to modern and efficient governance, a strategic advantage in attracting both partnership and capital collaboration.

Potential risks and practical considerations

Easing overseas investment procedures could be a turning point for Vietnamese startups, but it also comes with realities that businesses must take into account.

Regulatory supervision and data reporting

Moving from a licensing model to capital registration concentrates supervision in foreign exchange management. Vietnam’s Investment Law already requires outward investment money flows to pass through dedicated capital accounts registered with the State Bank of Vietnam, which anchors transaction monitoring and reporting.

Startups should expect continued scrutiny of FX documentation and timing requirements even under a lighter procedure.

Foreign exchange and macro risks

A simpler route for outward investment can spur capital outflows that need to be balanced against FX stability. Policymakers are simultaneously advancing broader financial market reforms, including foreign exchange liberalization within plans for an international financial centre. This underscores the need to safeguard reserves and liquidity as rules evolve.

Destination market compliance still applies

Even with easier procedures at home, Vietnamese investors must meet rules in host countries, such as:

• Laos permits repatriation of profits and capital upon approval and proper documentation, yet businesses have faced practical limits when FX supply tightens, creating timing risk for remittances.
• Indonesia operates a risk-based licensing system through OSS and requires reporting of cross-border FX transactions to Bank Indonesia, so investors must plan for post-approval filings and local compliance.
• The Philippines requires banks to report investment-related remittances to the central bank under defined FX forms and timelines, adding a procedural layer for capital movements in and out.

Implementation transition

Any move from licensing to registration will require new guidance, updated forms, and staff training across agencies and banks. Early periods often bring interpretation questions and processing backlogs. Vietnam’s recent updates to foreign exchange regulations for investment activities show the direction of travel, yet firms should budget time for circulars and internal bank procedures to catch up.

It’s important to note that a capital registration regime can reduce friction for outward investment, but startups should build controls for FX reporting at home, confirm remittance rules in target markets, and plan for a bedding-in period as the new framework is operationalized.

Regional approaches to outbound investment

Southeast Asian nations have taken varied paths to make outward investment easier while keeping effective financial governance. These examples offer useful insights for Vietnam as it considers reform.

• Singapore facilitates an open investment environment with no capital controls for residents. Enterprise Singapore actively supports businesses in pursuing overseas expansion with a clear and supportive framework.
• Indonesia relies on the Online Single Submission Risk-Based Approach (OSS-RBA) system for licensing. Introduced in August 2021, it offers differentiated procedures based on the risk level of activities, minimizing licensing burden for low-risk ventures, thus ensuring scrutiny for higher-risk ones.
• Malaysia is implementing the Qualified Resident Investor (QRI) Programme, effective from July 1, 2025. The initiative allows registered corporates with good governance to repatriate and convert foreign earnings and reinvest abroad more flexibly, with no prior approval needed. The pilot phase has already attracted over US$1 billion in inflows.
• Philippines maintains structured reporting, requiring banks to submit detailed outbound investment remittance data to the Bangko Sentral ng Pilipinas under updated foreign exchange guidelines. This fosters transparent audit trails and predictable compliance.

Implications for Vietnamese startups

Regional experiences offer more than just policy reference points. They also highlight practical strategies that Vietnamese startups can apply when taking capital abroad. For example, a shift to a registration-first process, similar to Singapore and Thailand, could accelerate funding timelines, while State Bank reporting, as practiced in Indonesia and the Philippines, would keep capital movements traceable.

In practice, startups can prepare by:

• Apply strict documentation standards: Keep clear records of remittances and foreign exchange proof for every transaction.
• Evaluating compliance risks early: Identify sector-specific requirements and necessary filings before committing capital.
• Strengthening treasury flexibility: Establish capital management policies that can adapt quickly to regulatory or market changes.
• Working within defined thresholds: Structure investments to align with the approval or reporting limits of each jurisdiction.
• Engaging a professional company service provider: Leverage expertise in local regulations, company incorporation, and international expansion strategies.

For Vietnamese firms already active in regional markets, these disciplines can ease cross-border transactions, build confidence with overseas partners, and accelerate the pace of market entry.

In conclusion, Vietnam’s proposal for the removal of overseas investment licensing provides a significant boost for startups, establishing a new framework for faster capital deployment and market expansion. The shift promises lower administrative costs and easier market entry, yet disciplined compliance remains essential to navigate the regulations safely. Hence, startups that maintain consistent reporting practices and engage professional service providers will be best positioned to seize these opportunities with confidence.

For timely updates and expert guidance on Vietnam’s evolving regulatory landscape, visit the BBCIncorp website or contact us directly at service@bbcincorp.com.

References:

(1) https://e.vnexpress.net/news/business/economy/vietnam-invests-665m-abroad-in-2024-4837018.html

(2) https://www.mpi.gov.vn/en/Pages/2025-1-14/FDI-attraction-situation-in-Vietnam-and-Vietnam-s-ehsipf.aspx

(3) https://en.wikipedia.org/wiki/Hoang_Anh_Gia_Lai_Group

(4) https://e.vnexpress.net/news/business/economy/vietnam-s-outbound-investment-jumps-3-5-times-in-h1-4910726.html

(5) https://e.vnexpress.net/news/business/economy/vietnam-s-outbound-investment-jumps-3-5-times-in-h1-4910726.html#:~:text=By%20the%20end%20of%20June,or%2030.6%25%20of%20the%20total.

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