ALIAT – Decree No. 103/2026/ND-CP: Simplification of Outbound Investment Procedures

On 31 March 2026, the Government promulgated Decree No. 103/2026/ND-CP (“Decree 103”) guiding outbound investment activities, which took effect on 3 April 2026. Decree 103 is designed to streamline administrative procedures for outbound investment and encourage investment activities. Notable provisions include the following:

Classification of Investment Procedures Based on Capital Scale

Under the previous regulations, there was no exemption from the requirement to obtain an Outward Investment Registration Certificate (OIRC), meaning all outbound investment projects, regardless of capital size, were subject to registration procedures, thereby creating administrative burdens.

Under Decree 103, the requirement to obtain an OIRC is classified based on capital scale as follows:

Projects with investment capital of less than VND 7 billion are exempt from the OIRC requirement (only foreign exchange registration is required);
Projects with investment capital from VND 7 billion to less than VND 1,600 billion, or projects in sectors subject to conditional outbound investment, require the Ministry of Finance to issue the OIRC;
Projects with investment capital of VND 1,600 billion or more must obtain approval from the Prime Minister.

For enterprises and investors, these new provisions are expected to shorten investment timelines for small-scale projects that are exempt from the OIRC requirement, enabling faster implementation and timely capture of business opportunities; reduce compliance costs through streamlined procedures, documentation, translation, notarization, and legal advisory expenses; and facilitate market testing through small-scale exploratory investments with reduced financial exposure.

From a regulatory perspective, the new framework reflects a shift from ex-ante approval to ex-post supervision, reducing initial licensing requirements while strengthening monitoring during project implementation. At the same time, it enhances the role of banks in managing capital flows through foreign exchange registration, thereby maintaining control over outbound foreign currency movements.

Recognition of Share Swap Mechanism

Decree 103 formally recognizes that Vietnamese investors may use shares, capital contributions, or profits to conduct outbound investment through share swap arrangements, subject to the following four principles:

Completion of outbound investment procedures in advance (if applicable);
Shares used in the swap must be valued on a market basis and comply with tax and anti-transfer pricing regulations;
Foreign investors receiving Vietnamese shares must complete investment procedures in accordance with applicable laws; and
Share swap arrangements must not be used for transfer pricing, tax evasion, or money laundering purposes.

This mechanism expands available investment structures, enabling enterprises to undertake cross-border M&A or restructuring without relying entirely on cash payments. It also enhances transaction flexibility, as the use of shares, capital interests, or projects facilitates valuation negotiations and deal structuring, particularly within multinational corporate groups. In addition, share swaps can help mobilize resources and reduce immediate cash flow pressures, thereby easing financial burdens at the time of transaction.

Digitalization and Integration of National Data Systems in Investment Procedures

Under Decree 103, enterprises are required to submit outbound investment dossiers electronically, with procedures integrated into the national investment data system. The system enables automatic cross-checking of enterprise registration data, tax records, and foreign exchange information. Any discrepancies between declared information and existing databases may be immediately identified.

This digitalization policy is expected to shorten processing timelines, as electronic submissions allow for faster receipt, circulation, and feedback compared to traditional paper-based processes. Data connectivity also facilitates automatic verification against enterprise, tax, and foreign exchange records, reducing duplication of information submission.

At the same time, conducting outbound investment procedures electronically enhances transparency and accountability, thereby improving the effectiveness of state management.

In addition, when filing corporate income tax finalization returns, enterprises are required to concurrently prepare reports on the establishment and utilization of science and technology development funds in accordance with applicable regulations.

Conditions for Outbound Investment by Economic Organizations with Majority Foreign Ownership

Decree 103 introduces additional requirements for economic organizations in which foreign investors hold more than 50% of charter capital when conducting outbound investment, including:

Only equity capital may be used for outbound investment;
The organization must have recorded profits for two consecutive years (based on audited financial statements);
Where retained earnings are used for outbound investment, the following sequence must be followed: issuance of the OIRC → capital increase and full contribution of charter capital in Vietnam → remittance of investment capital abroad.

These requirements—particularly the prohibition on using borrowed capital and the requirement of two consecutive years of profitability—set relatively stringent standards for outbound investors. In practice, such conditions may exclude startups, innovative enterprises, or high-growth companies. Failure to meet the profitability threshold may limit access to international investment opportunities and reduce the competitiveness of Vietnamese enterprises in regional and global markets.

Repatriation of Profits to Vietnam

Decree 103 introduces a new principle on profit repatriation, requiring investors to remit all profits and other income derived from overseas investment activities back to Vietnam within 12 months from the date of profit distribution.

This requirement may lack flexibility for industries with long investment cycles—such as infrastructure, energy, agriculture, technology, or market expansion—which often require reinvestment of profits. The 12-month deadline may not align with actual business cycles. Additionally, the fixed timeframe may expose investors to foreign exchange risks if funds must be converted and remitted during unfavorable exchange rate conditions, particularly for large profit amounts. Applying a uniform repatriation timeline across all investment types may not adequately reflect differences in capital needs, profitability cycles, and operational models across sectors.

Overall, Decree 103 establishes a new legal framework that simplifies administrative procedures, diversifies investment structures, and strengthens digitalization in the management of outbound investment activities. These changes are expected to shorten project implementation timelines, reduce compliance costs, and expand structuring options for enterprises.

However, Decree 103 also imposes stricter requirements on financial conditions, funding sources, and profit repatriation obligations, thereby requiring enterprises to undertake careful legal, financial, and compliance planning. Accordingly, businesses should consider the following actions:

Review the capital scale of each outbound investment project to determine the applicable procedural requirements (exemption or approval), thereby optimizing implementation timelines and compliance costs;
Develop phased investment strategies, leveraging the exemption mechanism for small-scale projects to test markets before scaling up;
When applying share swap mechanisms, ensure compliance with market-based valuation, tax regulations, anti-transfer pricing rules, and completion of all relevant investment procedures to mitigate legal risks;
Standardize internal data (enterprise registration, tax, foreign exchange) and ensure consistency of information prior to electronic submission to avoid rejection or delays due to discrepancies;
For economic organizations with foreign ownership exceeding 50%, assess compliance with equity funding requirements and the two-year profitability condition, and develop appropriate financial plans for outbound investment; and

Establish cash flow planning and profit repatriation strategies aligned with the 12-month deadline, while taking into account exchange rate fluctuations and reinvestment needs in the host market