Vietnam’s Decree 16: How are direct investment and indirect investment?

Direct investment and indirect investment are specified in Decree No. 16/2014/ND-CP of Vietnam’s Government as follows:

Direct investment

- Foreign direct investment in Vietnam means that non-residents invest their capital and directly manage investment activities in Vietnam. Investment capital includes capital in cash or other lawful assets brought by non-residents into Vietnam and profits retained by nonresidents for investment in Vietnam.

- Vietnam’s offshore direct investment means that residents invest their capital and directly manage investment activities in foreign countries. Investment capital includes capital in cash or other lawful assets brought overseas by residents and profits retained by residents for offshore investment.

Indirect investment

- Foreign indirect investment in Vietnam means that non-residents make investment in Vietnam through purchasing and selling securities and other valuable papers with, contributing capital to, or purchasing shares of, residents and through securities investment funds and other intermediary financial institutions in accordance with law, without directly managing investment activities in Vietnam.

- Vietnam’s offshore indirect investment means that residents transfer capital abroad in accordance with law for investment in the form of purchasing and selling securities and other valuable papers issued by non-residents, contributing capital to or purchasing shares of non-residents without directly managing offshore investment activities.

View relevant provisions at Decree No. 16/2014/ND-CP of Vietnam’s Government, effective from April 21, 2014.

Thu Ba

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