Understanding Vietnam’s Negative Investment List

Part of the many regulations you should know about when you invest in Vietnam as a foreigner is the country’s Negative Investment List. This list determines which sectors are open, conditional, or restricted to foreign capital under the Law on Investment 2020 (LOI 2020) and further detailed in Decree 31/2021/ND-CP. 

Historically, Vietnam operated under  a “positive list” system. This means, any activity not mentioned on the list is effectively prohibited or restricted by default. This system is generally more restrictive and less transparent for new business models. Under current law, the Negative list assumes that all sectors are 100% open to investment unless they are explicitly listed as prohibited or restricted. 

In this guide, we will talk about the Negative List in Vietnam. We will cover which sectors are strictly prohibited and which are conditional. This way, you can understand which sectors in Vietnam are open to foreign investment. 

The Negative List Framework in Vietnam

The Law on Investment 2020 (LOI 2020) marked a fundamental shift in Vietnam’s approach to foreign direct investment (FDI). It officially introduced the “Negative List” approach, which was subsequently operationalized by Decree 31/2021/ND-CP. 

Decree 31 provides the “Market Entry List” for foreign investors, which is divided into two distinct sections (Appendix I):

1. Section A: Business lines in which market access is not yet permitted for foreign investors (25 sectors).
2. Section B: Business lines in which market access is conditional (59 sectors).

These regulations ensure that foreign investors receive “National Treatment”. This means that they are treated the same as domestic investors in the country unless their chosen business sector falls under a specific restriction. 

The “Unbound Business” Principle

One of the most significant clarifications in Decree 31 involves “Unbound” business lines. These are sectors where Vietnam has made no specific commitments in international treaties (like the WTO).

If a business line is “unbound” but Vietnamese domestic law provides no specific market access restrictions, foreign investors are granted full market access (100% ownership). This removes the previous requirement for licensing authorities to seek ad-hoc opinions from the Department of Planning and Investment (DPI) for every uncommitted sector.

The Vietnam Standard Industrial Classification (VSIC)

To identify business sectors in Vietnam, the General Statistics Office (GSO) under the Department of Planning and Investment (DPI) has implemented the Vietnam Standard Industrial Classification (VSIC). Authorities use these codes to verify if an activity is prohibited or conditional. During the incorporation process, your business activity must be mapped on your Enterprise Registration Certificate (ERC). 

Vietnam also uses Central Product Classification (CPC) codes. These codes are used primarily for international treaty commitments. If a business activity is not explicitly defined in local law, authorities defer to CPC codes.

Business Lines with Prohibited Market Access (Section A)

According to Section A of Appendix I in Decree 31/2021/ND-CP, there are 25 business lines where market access is not yet permitted for foreign investors. These are typically sectors tied to national security, state monopolies, or sensitive social services.

Key prohibited sectors include:

• State Monopolies: Trading in goods and services that are under a state monopoly (e.g., certain infrastructure or specific industrial goods).
• Media and Press: Press activities and information gathering in any form.
• Security Services: Private investigation and security services (with very limited specialized exceptions).
• Judicial Services: Administrative and judicial services, including notary services, bailiff services, and property auction services.
• Labor Agencies: Services for sending Vietnamese workers to work abroad under contract.
• Natural Resource Extraction: Fishing or harvesting marine life and specific types of sensitive mineral exploration.
• Public Property: Collection, purchase, and handling of public property at armed force units.
• Intellectual Property: Industrial property representative services and intellectual property assessment services.

Business Lines with Conditional Market Access (Section B)

Section B of Appendix I lists 59 business lines where foreign investors are permitted to operate, provided they satisfy specific market entry conditions. These conditions are typically related to ownership caps, investment forms, or operational scope.

Common conditional sectors include:

• Financial Services: Banking, insurance, and securities trading.
• Telecommunications: Network infrastructure and non-infrastructure telecommunications services.
• Logistics and Transport: Transport of goods and passengers by rail, road, air, sea, and pipeline, as well as shipping agency services.
• Media and Entertainment: Production and distribution of cultural products (video/audio), television broadcasting, and betting/casino businesses.
• Education and Health: Educational services and healthcare/social services.
• Real Estate: Real estate business activities, including development and management.
• E-commerce: Digital commerce activities and related services.
• Specialized Services: Legal services, auditing, accounting, tax services, and veterinary services.
• Advertising: Commercial advertising services.

Options for Market Entry on Conditional Sectors in Vietnam

There are several pathways you can take to enter conditional sectors in Vietnam. Each pathway depends on your company structure, preferred foreign equity, and level of operational control. 

• 100% Foreign-Owned Enterprise (WFOE): you can establish a 100% foreign-owned company in these sectors provided you satisfy all sub-licensing and technical conditions for each sector. 
• Joint Ventures (JV): business lines with ownership caps require joint ventures with a local partner. This partner can assist in meeting local operational requirements or securing specific licenses that are easier for domestic firms to obtain.
• Business Cooperation Contract (BCC): A BCC is a contractual agreement between you and a local partner to perform specific business activities without forming a new legal entity. This is common in sectors like telecommunications and oil and gas, where a temporary project-based presence is preferred over long-term incorporation.
• Mergers and Acquisitions (M&A): Instead of a “Greenfield” investment (starting a new company), you can acquire shares in an existing Vietnamese company. Under Decree 31, if the target company operates in a conditional sector, you must obtain M&A Approval from the DPI before the transaction is finalized.
• Public-Private Partnership (PPP): For large-scale infrastructure projects (e.g. transport, power, or water treatment) you can enter via PPP contracts. These projects are governed by the Law on PPP Investment and allow investors to partner with state agencies to develop national infrastructure.

For more options, you can talk with our local experts in Vietnam for a custom-tailored market entry strategy. 

Sectors Off-limits to Both Local and Foreign Investment

Article 6 of the LOI 2020 identifies eight business lines that are strictly prohibited for both domestic and foreign investors. Engagement in these sectors is illegal:

1. Narcotics and Drugs: Trading in substances listed in the government’s prohibited list.
2. Toxic Chemicals and Minerals: Trading in substances banned by international conventions or domestic environmental laws.
3. Endangered Flora and Fauna: Trading in specimens defined by CITES or local rare species regulations.
4. Prostitution: Organizing or engaging in prostitution services.
5. Human Trafficking: The trade of humans or human body parts.
6. Human Cloning: Business activities related to human asexual reproduction.
7. Firecrackers: Manufacturing or trading firecrackers (excluding industrial explosives regulated by the state).
8. Debt Collection Services: Private debt collection was officially banned in 2020.

How Does the Negative List Affect Your Business?

Before you start a business in Vietnam as a foreigner, you need to understand which sectors are open or restricted. To ensure a compliant entry into the Vietnamese market, investors should follow this protocol:

1. Verify VSIC and CPC Codes: Cross-reference business activities with the latest Decision 36/2025/QD-TTg codes and international treaties.
2. Review Treaty Commitments: Investors from countries under the EVFTA or CPTPP may benefit from more favorable market access than those from non-treaty nations.
3. Assess Sub-license Needs: Identify all necessary operational permits that must be secured after a Business Registration Certificate (BRC) is issued.
4. Confirm Capital Requirements: Ensure the proposed charter capital meets the minimum thresholds for conditional sectors.

To help you get started, Emerhub can help you identify the correct VSIC codes for your business, secure sub-licenses, and conduct legal due diligence. 

For an assessment of your business’s eligibility under the current Negative Investment List, contact Emerhub’s local compliance experts using the form.