Circular No. 03/2025/TT-NHNN, effective from June 16, 2025, marks a significant change in the determination of foreign direct investment (FDI) enterprises by adjusting the ownership threshold of foreign investors. Specifically, the new regulation officially changes the criterion from “51% or more” as stipulated in Circular No. 06/2019/TT-NHNN to “more than 50%.” Accordingly, any enterprise in which foreign investors hold more than 50% of the charter capital (even at 50.01%) will be classified as an FDI enterprise.
Accordingly:
“2. ‘Foreign direct investment enterprises’ include:
a) Enterprises established in the form of investment to establish an economic organization, in which foreign investors are members or shareholders, and which are required to carry out procedures for the issuance of an Investment Registration Certificate in accordance with the laws on investment;
b) Enterprises not falling under the case specified in point (a) of this clause but having foreign investors owning 50% or more of the enterprise’s charter capital, including:
(i) Enterprises in which foreign investors contribute capital, purchase shares, or acquire capital contributions (operating in conditional or non-conditional business sectors applicable to foreign investors), resulting in foreign investors owning 50% or more of the charter capital;
(ii) Enterprises established after division, separation, merger, or consolidation, resulting in foreign investors owning 50% or more of the charter capital;
(iii) Newly established enterprises in accordance with specialized laws;
c) Project enterprises established by foreign investors to implement PPP projects in accordance with the laws on investment.”
A notable point is that Circular No. 03 introduces a transitional provision under Article 11.4, granting a period of 12 months from June 16, 2025, for enterprises with foreign ownership ratios of more than 50% but less than 51% to convert their Indirect Investment Capital Accounts (IICA) into Direct Investment Capital Accounts (DICA). During this transitional period, enterprises are allowed to continue using their existing IICA; however, after the expiration of this period, the use of a DICA will become mandatory.
A Direct Investment Capital Account (DICA) is a payment account in foreign currency or Vietnamese Dong opened by an FDI enterprise or a foreign investor at a licensed bank in Vietnam to conduct transactions related to direct investment activities, including capital contribution, capital transfer, offshore borrowing, and profit remittance abroad.
The above changes are expected to establish a clearer and more consistent legal framework for foreign exchange management applicable to FDI enterprises.
First, the adjustment of the ownership threshold and the alignment of the definition of FDI enterprises with the Law on Investment help address inconsistencies among previous legal instruments. This enables investors, credit institutions, and regulatory authorities to accurately determine legal obligations as well as the applicable foreign exchange management regime for each type of enterprise.
Second, enterprises with foreign ownership exceeding 50% will be required to fully comply with obligations applicable to FDI enterprises. Specifically, such enterprises must open a DICA at a licensed bank; all transactions related to investment capital—such as capital contribution, profit distribution, capital transfer, or offshore borrowing—must be conducted through this account. In addition, profit remittance abroad must satisfy stringent requirements regarding auditing, tax declaration, financial reporting, and full compliance with tax obligations under applicable laws. Furthermore, enterprises will need to adjust their internal accounting systems, documentation, and reporting procedures to align with regulatory requirements applicable to DICA accounts.
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