On January 5 2026, Vietnam released its report on foreign direct investment performance for 2025, reporting disbursed capital of approximately $27.62 billion, up 9% year-on-year. Investment activity spanned 18 out of 21 economic sectors, underscoring the continued breadth of foreign participation in the market. The figures confirm Vietnam’s position as a rising star for inbound investment in Southeast Asia, supported by ongoing administrative reforms and a progressively more transparent regulatory framework.
Foreign ownership limits and the role of local partners
While the legal environment has become more accessible, regulatory constraints continue to shape how foreign investments are structured in practice. Foreign ownership limits remain a defining feature of Vietnam’s investment landscape and serve as a key factor shaping the role of local partners in certain sectors. In practice, these caps require foreign investors to collaborate with Vietnamese counterparties to access regulated industries, with thresholds varying depending on the business line and applicable commitments.
Typical examples include:
Advertising (99%);
Online gaming (49%);
Logistics (ranging from 49% to 51%, depending on the segment);
Telecommunications (49% for services with network infrastructure, and 65% for services without network infrastructure); and
Aviation (currently 34%, with a proposed increase to 49% under draft regulation).
Within these parameters, local partners are not merely optional but form an integral part of compliant market entry structures.
Commercial rationale for local partnerships and nominee risks
Even in sectors where full foreign ownership is permitted, commercial considerations often drive investors towards local partnerships. While foreign investors can establish wholly foreign-owned enterprises and lease land or office space in their own name, access to specific locations, project opportunities, or legacy land arrangements may depend on local relationships and execution capability. In this context, partnering with a Vietnamese counterparty is frequently a matter of efficiency and execution rather than formal legal necessity.
However, this commercial logic must be distinguished from nominee arrangements. Vietnamese law does not recognise structures where a local individual holds shares on behalf of a foreign investor without genuine economic substance, and such arrangements may be challenged as invalid under general civil law principles. At the same time, regulatory scrutiny of ownership transparency is increasing, particularly in the context of anti-money laundering compliance. In serious cases, non-compliant structures may expose investors to enforcement action, including potential implications for the continuity of the investment project.
Governance and control in Vietnamese joint ventures
Where a Vietnamese joint venture is adopted, governance becomes the primary mechanism for maintaining control. Foreign investors typically rely on the company charter and related agreements to define reserved matters requiring unanimous consent, covering key decisions such as share transfers, capital increases, and significant asset disposals. Financial oversight is reinforced through dual-signatory requirements, while board composition and voting thresholds are structured to preserve effective influence within the agreed ownership framework.
These governance protections are particularly important where local participation is driven by regulatory or operational considerations. In certain sectors subject to heightened compliance requirements such as data-driven industries involving localisation, cybersecurity, and local infrastructure, foreign investors must ensure that control mechanisms are sufficiently robust to manage regulatory risk and day-to-day operations within the joint venture structure.
Final thoughts
Ultimately, the decision to partner with a Vietnamese entity is no longer a binary question of legal necessity but a strategic assessment shaped by ownership restrictions, commercial access, and execution risk. As this analysis shows, local partners may be required in some sectors and commercially advantageous in others, but their role must always be carefully structured.
For foreign investors, the priority is to ensure that such partnerships are grounded in genuine commercial substance and supported by robust governance frameworks that preserve control and ensure regulatory compliance. This is particularly critical given the increasing scrutiny on ownership transparency and the legal risks associated with non-compliant arrangements.
Equally important is the need for ongoing monitoring and adaptation. As Vietnam’s regulatory framework continues to evolve, structures that are compliant at entry may require adjustment over time. Investors who take a disciplined and transparent approach to partner selection and governance will be better positioned to manage risk and sustain long-term operations in the Vietnamese market.
