OFFICIAL LETTER NO. 5427/BTC-DNTN (2026): CLARIFICATION OF THE PROCEDURE FOR ESTABLISHING ECONOMIC ORGANIZATIONS BY FOREIGN INVESTORS

1. General Information

On April 29, 2026, the Ministry of Finance issued Circular No. 5427/BTC-DNTN to provide guidance on the registration and establishment of economic organizations by foreign investors, based on the 2025 Investment Law and related guiding documents. The document was issued to address practical difficulties encountered by localities during the implementation of new regulations on foreign investment.

2. Key Points: Clarifying the Two Methods of Establishment

The circular clearly defines two legal approaches for foreign investors when establishing a business entity:

(i) Establishment following the issuance of an Investment Registration Certificate (IRC)

• The investor must first complete the procedures for obtaining the IRC;
• Then proceed with the registration to establish a business/cooperative;
• The established economic entity will be the entity implementing the investment project under the IRC.

(ii) Establish first, apply for IRC later

• Investors are permitted to establish a business first in accordance with corporate law;
• Then proceed with the investment procedures for the project;
• When registering the business, they must commit to meeting market access conditions.

This is a key point, reflecting the approach of flexibilizing the investment process, rather than strictly adhering to a rigid procedure.

3. Regulations on registration documents: Differentiated by case

The guidance document clearly specifies the required documents for each method:

In cases where an IRC already exists:

• Business/cooperative registration documents must be accompanied by a copy of the IRC;
• In accordance with the current Enterprise Law and Cooperative Law.

In cases established before the IRC was issued:

• No requirement to submit an IRC in the business registration dossier;
• However, a commitment to meet market access conditions must be included.

This point significantly reduces the initial procedures for investors.

4. Clarifying the role of the business registration authority

A notable point is:

• The business registration authority does not have the authority to review the content of commitments regarding market access conditions at the time of business registration;
• The review of investment conditions is conducted during the investment procedure stage.

This clearly demonstrates the separation between business procedures and investment procedures, reducing overlap in practice.

5. Policy Implications

Circular 5427 brings about several significant impacts:

• Simplifying market entry procedures for foreign investors;
• Increase flexibility in choosing the sequence of investments;
• Reduce the burden on business registration authorities;
• Contribute to improving the investment environment, in line with trends in attracting FDI.

This is considered an important practical implementation of the 2025 Investment Law.

6. Impact on Businesses and Investors

For businesses, particularly startups and foreign-invested enterprises (FIEs):

• It is possible to establish a legal entity faster, and then complete the investment procedures;
• Flexibility in structuring transactions and implementing projects;
• However, strict control over market access conditions is necessary to avoid legal risks in later stages.

View details of Circular 5427 from the Ministry of Finance here!

Circular No. 5427/BTC-DNTN of 2026 is an important guideline that contributes to standardizing and streamlining the process of establishing economic organizations by foreign investors.

The policy’s focus lies in: expanding procedural options – streamlining procedures – reducing pre-approval requirements and increasing post-approval oversight, thereby enhancing the competitiveness of Vietnam’s investment environment.