Foreign Exchange Management for Foreign Investment from 18 August 2026: Key Points for Businesses

On 31 July 2026, the State Bank of Vietnam issued Circular 38/2026/TT-NHNN (“Circular 38”) on foreign exchange management for foreign investment activities in Vietnam. The Circular takes effect from 18 August 2026 and replaces Circular No. 06/2019/TT-NHNN.

Circular 38 updates the framework for managing foreign investment cash flows, particularly in relation to investment capital accounts, capital contributions, transfers of capital and profits, and transfer transactions, as well as the obligation to provide supporting documents to banks. The following are the key points that businesses and foreign investors should note.

1. Circular 38/2026/TT-NHNN: Expanded Scope and Entities Required to Open Investment Capital Accounts

Circular 38 broadens the foreign exchange management framework for foreign investment activities in Vietnam and for investments from the International Financial Center in Vietnam into the rest of Vietnam.

Entities required to open investment capital accounts include:

1. Foreign-invested economic organizations in cases prescribed by law;
2. Foreign investors or member enterprises participating in BCCs;
3. Foreign investors directly implementing PPP projects without establishing a project enterprise; and
4. Foreign investors in petroleum activities.

For foreign-invested economic organizations, this includes cases where a foreign investor or member enterprise holds more than 50% of charter capital through capital contribution, share acquisition or acquisition of capital contributions.

Circular 38 also excludes certain investment activities and securities transactions that are subject to the separate foreign exchange management regime for the securities market.

2. Terminology Changed from “Direct Investment Capital Account” to “Investment Capital Account”

Circular 38 uses the term “foreign investment capital account in Vietnam”, abbreviated as “investment capital account”.

This is a payment account in foreign currency or Vietnamese dong opened at an authorized bank to carry out receipts and payments related to investment activities within the scope of the Circular.

The Circular also replaces the terms “direct investment capital account (DICA)” and “foreign direct investment capital account” with “foreign investment capital account in Vietnam” in State Bank circulars issued before Circular 38 takes effect.

This terminology change is consistent with the broader scope of Circular 38. However, the change in name does not mean that all existing accounts must be closed and reopened; businesses should consider the applicable account opening and closing requirements and transitional provisions to determine how existing accounts should be handled.

3. Investment Capital Accounts May Be Opened Before Issuance of the Investment Registration Certificate

A notable new provision applies where a foreign investor has established an economic organization before carrying out procedures for issuance or amendment of the Investment Registration Certificate, allowing the economic organization to open an investment capital account before completion of the investment procedures.

During this period, the account may be used only for transactions permitted by the Circular, including receipt of capital contributions, receipt of interest accrued on the account, payment of lawful expenses related to investment preparation activities, and refund of funds to the investor if the Investment Registration Certificate is not issued or amended.

Once the Investment Registration Certificate is issued or amended, the enterprise may continue using the same account for investment transactions in accordance with the applicable regulations.

4. Greater Flexibility in Opening Foreign Currency and Vietnamese Dong Accounts

Applicable entities may open one investment capital account in foreign currency and/or one investment capital account in Vietnamese dong at the same authorized bank.

Where capital contributions are to be made in multiple foreign currencies, a separate account may be opened for each foreign currency at the same bank.

For investors implementing multiple BCCs, PPP projects or petroleum contracts, an investment capital account must be opened separately by each investor for each contract or project, as applicable.

5. Capital and Profits May Be Retained for Further Investment in Vietnam

Circular 38 allows foreign investors and member enterprises, instead of remitting capital, profits or other lawful proceeds overseas or into the International Financial Center, to transfer those funds from the investment capital account to their own payment account at an authorized bank for use in another project or investment activity in Vietnam in accordance with law.

This mechanism applies to both capital returned as a result of capital reduction, transfer, completion, liquidation or termination of an investment project/contract, and profits or other lawful proceeds arising from investment activities.

6. Clearer Payment Rules for Transfer Transactions

Circular 38 sets out specific payment rules for various transfer transactions relating to foreign investment.

Whether an investment capital account must be used depends on the type of transaction, form of investment and the residency status of the parties.

For transfers of shares or capital contributions in a foreign-invested economic organization, a transaction between a non-resident investor and a resident investor must be settled through an investment capital account.

By contrast, certain transactions, such as transfers between investors who are all non-residents or all residents, are not required to be settled through this account.

Circular 38 also sets out specific rules for other forms of investment:

• BCCs: payment of the transfer value of an investment project in the cases specified by the Circular must be made through an investment capital account, including certain transactions between non-resident investors;
• PPP projects: where a foreign investor directly implements a PPP project, payment of the project transfer value between non-resident investors, or between a non-resident and a resident investor directly implementing the project, must be made through an investment capital account; and
• Petroleum activities: in addition to transfers of investment projects, Circular 38 also governs transfers of participating interests and the rights and obligations of contractors under petroleum contracts. Where the transaction is between a non-resident investor and a resident investor, payment must be made through an investment capital account.

For petroleum activities, Circular 38 also permits valuation and payment in foreign currency for certain transfers of projects, participating interests, and contractors’ rights and obligations, subject to the conditions specified in the Circular.

For other transactions between residents and non-residents, the general rule is that valuation and payment must be in Vietnamese dong, unless otherwise permitted.

Accordingly, when carrying out a transfer transaction, businesses should identify the asset or right being transferred, the form of investment, and the residency status of the parties in order to determine the correct account and currency for payment.

7. Obligation to Update Supporting Documents with the Bank

Circular 38 expressly sets out the responsibilities of investors and member enterprises when carrying out transactions through banks.

The parties must provide complete and truthful transaction information, clearly state the purpose of each transfer, provide documents requested by the bank, and be responsible for the authenticity of the documents submitted.

After an Investment Registration Certificate, Enterprise Registration Certificate or equivalent document is issued or amended, the relevant economic organizations must provide the updated documents to the bank where the investment capital account is maintained.

Authorized banks are also required to establish internal procedures for documentation and for opening and using investment capital accounts, and to monitor the transparency of fund flows.

In practice, the supporting documents required for a transaction may therefore also depend on the requirements of the bank where the enterprise maintains its account.

8. Transitional Provisions for Existing Accounts

Circular 38 includes transitional provisions for certain accounts used before 18 August 2026.

A foreign-invested economic organization that used a payment account to receive charter capital before the Circular took effect may transfer those funds to an investment capital account opened under the new rules.

For foreign investors in petroleum activities currently using payment accounts, the deadline to open an investment capital account is 12 months from 18 August 2026.

Certain cases that are required to close an investment capital account under the new rules must also complete the closure within the same 12-month period.

Where foreign ownership in certain economic organizations falls to 50% or less and the investment capital account must be closed, foreign investors that continue to hold shares or capital contributions must carry out transactions relating to the remaining investment through an indirect investment account.

What Should Businesses Review?

Following the effectiveness of Circular 38, foreign-invested enterprises and foreign investors should review the following:

• Determine whether the enterprise is required to open and use an investment capital account under Circular 38;
• Review existing accounts and update the term “investment capital account” in documents, payment instructions and internal procedures;
• Check the currency and account currently used to receive capital contributions, particularly where contributions are made in multiple foreign currencies;
• Where an enterprise is established before the Investment Registration Certificate is issued or amended, ensure that the account is used only for permitted transactions;
• Determine the correct account and payment currency for transfers of shares, capital contributions, projects, BCCs, PPP projects or petroleum interests;
• Consider the mechanism for using capital, profits and other lawful proceeds for further investment in Vietnam instead of remitting them overseas;
• Provide updated investment, enterprise registration and related documents to the bank in a timely manner; and
• Review existing accounts to determine whether any account must be newly opened, converted or closed within the 12-month transitional period.

Disclaimer

This article is provided for general informational and reference purposes only and does not constitute legal advice. The application of relevant laws and procedures may vary depending on the specific documents, circumstances, and countries or territories involved.

For advice tailored to your specific circumstances, please contact LTS LAW FIRM for further consultation and legal assistance.

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