On 31 July 2026, the State Bank of Vietnam (“SBV”) issued Circular No. 38/2026/TT-NHNN regulating foreign exchange management for foreign investment activities in Vietnam (“Circular 38”). Circular 38 takes effect on 18 August 2026, replaces in its entirety Circular No. 06/2019/TT-NHNN (“Circular 06”) and renders ineffective the provisions amending and supplementing Circular 06 under Circular No. 03/2025/TT-NHNN (“Circular 03”), thereby replacing the previous regulatory framework on foreign exchange management for foreign direct investment activities in Vietnam.

Circular 38 was issued against the backdrop of significant changes to Vietnam’s legal framework on foreign investment and also introduces foreign exchange management mechanisms for certain new investment models and activities. Compared with the previous regulatory framework, Circular 38 contains a number of notable changes relating to the opening and use of investment capital accounts, the sequence for making capital contributions, the use of capital and profits for further investment in Vietnam, as well as cash flow management for investment activities from the International Financial Centre and petroleum activities.

Against this backdrop, this article provides an update and analysis of certain notable changes under Circular 38 and highlights certain practical implications for foreign investors and foreign-invested economic organizations in Vietnam.

1. Expansion of scope and updated criteria for determining entities required to open an ICA

Circular 38 has replaced the terms “direct investment capital account” and “foreign direct investment capital account” in SBV circulars with the term “foreign investment capital account in Vietnam” (“ICA”)[1]. At the same time, compared with Circular 06, which only regulated “foreign direct investment in Vietnam”, Circular 38 defines a broader scope of regulation as “foreign investment activities in Vietnam”. However, this expansion is primarily terminological. Circular 38 continues to exclude from its scope foreign-invested economic organizations that are public companies whose shares are listed or registered for trading on a Stock Exchange, as well as investment and securities trading activities on the securities market[2].

The substantive expansion of the scope of regulation lies in Circular 38’s inclusion of investment activities from the International Financial Centre in Vietnam into the rest of Vietnam[3]. In terms of applicable subjects, Circular 38 also adds operators and contractors that are foreign investors under petroleum contracts and agreements in the petroleum sector[4].

With respect to the criteria for determining economic organizations required to open an ICA, Circular 06 previously identified foreign direct investment enterprises, in certain cases, based on foreign investors holding 51% or more of the charter capital[5]. However, Circular 03 (effective from 16 June 2025) amended this threshold to “more than 50% of the charter capital” and correspondingly amended the condition for closing a direct investment capital account from the case where foreign ownership “falls below 51%” to “is equal to or less than 50%”[6]. Circular 03 also provided a 12-month period for enterprises with foreign ownership of more than 50% but less than 51% to switch to using a direct investment capital account[7].

To align with this provision under Circular 03, Circular 38 continues to apply the threshold of more than 50% to determine when a foreign-invested economic organization is required to open an ICA, while using the threshold of 50% or less to determine when the account must be closed[8]. Notably, Circular 38 applies this mechanism not only to the ownership percentage of foreign investors but also to a member enterprise in the International Financial Centre in Vietnam (“Member Enterprise”) when investing in the rest of Vietnam. This approach is consistent with Decree 329, under which Decree 329 requires a Member Enterprise conducting investment activities from the International Financial Centre into the rest of Vietnam to comply with foreign exchange management regulations applicable to foreign investors[9].

In addition to the ownership percentage criterion above, Circular 38 also adjusts the criteria for determining economic organizations required to open an ICA. Specifically, Circular 06 defines a foreign direct investment enterprise as an enterprise established through investment in the establishment of an economic organization and required to carry out procedures for issuance of an Investment Registration Certificate (“IRC”)[10]. Circular 38 has removed the condition “required to carry out procedures for issuance of an Investment Registration Certificate”, and only requires the economic organization to be established by a foreign investor or a Member Enterprise in accordance with investment laws[11]. This change is consistent with the mechanism allowing an economic organization to be established and to open an ICA before being issued an IRC, as discussed in Section 2 below.

2. Allowing economic organizations established before issuance of an IRC to open an ICA

The 2025 Law on Investment and Decree 96 introduced a mechanism allowing foreign investors that satisfy the conditions prescribed by law to establish an economic organization before carrying out procedures for issuance or amendment of an IRC[12]. However, Circular 06 did not contain any provision allowing an economic organization established under this sequence to open a direct investment capital account to receive charter capital contributions from foreign investors during the period before the IRC is issued or amended.

To enable this mechanism to be implemented in practice, Circular 38 has introduced a provision allowing an economic organization established under the above sequence to open one ICA in foreign currency and/or one ICA in Vietnamese dong at the same authorized bank before the IRC is issued or amended[13]. During the period before the IRC is issued, this account may only be used to[14]:

(i) receive charter capital contributions and interest accrued on the account balance;

(ii) pay lawful expenses related to pre-investment activities in Vietnam; and

(iii) refund capital to the investor or Member Enterprise if the IRC is not issued or amended

After the IRC is issued or amended, the economic organization may use the ICA already opened to conduct all receipt and payment transactions permitted under Circular 38[15].

It should be noted that allowing funds to be remitted into Vietnam for pre-investment activities is not an entirely new mechanism. Previously, Circular 06 allowed a foreign investor, before issuance of an IRC or the corresponding investment documents, to remit funds from abroad or from the investor’s own foreign currency or Vietnamese dong payment account at an authorized bank to pay lawful expenses during the pre-investment stage[16]. The new point under Circular 38 is that, where an economic organization has been established before issuance of an IRC and has opened an ICA under the above mechanism, cash flows for pre-investment activities must be made through that ICA[17].

In parallel with the above mechanism, Circular 38 has added the Enterprise Registration Certificate (“ERC”) to the list of documents serving as a basis for capital contribution[18]. Circular 06 previously did not expressly list the ERC among these documents, but specifically listed IRC, establishment and operation licenses under specialized laws, notices on satisfaction of conditions for capital contribution, share purchase or acquisition of capital contributions, PPP contracts, and other documents evidencing capital contribution in accordance with law.  This change provides a clearer legal basis for banks to receive capital contributions for economic organizations that have been established and obtained an ERC but have not yet been issued an IRC, consistent with the mechanism allowing an ICA to be opened and used before issuance of an IRC under Circular 38.

3. Allowing capital contributions to be remitted before completion of procedures for registration of changes to charter capital

Circular 06 provides that monetary capital contributions must be made through a direct investment capital account and be consistent with the amount of capital contribution recorded in the relevant investment documents[19]. However, Circular 06 did not clearly specify whether the capital contribution remittance must be made before or after the economic organization completes procedures for registration of an increase in charter capital. This lack of clarity led to inconsistent interpretations and practices among banks; in some cases, banks required the economic organization to complete the capital increase registration procedures and provide an updated Enterprise Registration Certificate (“ERC”) before allowing the investor to remit the capital contribution.

However, we consider that this interpretation is not fully consistent with the sequence for registration of a capital increase under enterprise law. In principle, enterprise law is structured on the basis that capital contribution or payment for share purchases is made first, after which the enterprise registers the updated charter capital and is issued the corresponding ERC. Specifically, under the 2020 Law on Enterprises, an enterprise is required to register changes to the contents of its ERC within 10 days from the date of the change[20]; for a joint stock company increasing its charter capital through a share offering, the company must register the change in charter capital within 10 days from completion of the share sale[21]. In addition, under Decree No. 168/2025/NĐ-CP dated 30 June 2025 of the Government on enterprise registration (“Decree 168”), the application dossier for registration of an increase in charter capital must include documents evidencing that the capital contribution and share purchase have been paid corresponding to the portion of charter capital registered for increase[22].

On that basis, Circular 38 clarifies this sequence from a foreign exchange management perspective by providing that foreign investors and Member Enterprises may transfer funds into the ICA to make capital contributions, change the amount of capital contribution or change the capital contribution ratio before the foreign-invested economic organization carries out procedures for registration of an increase in charter capital, change in capital contribution or change in capital contribution ratio[23].

These new provisions expressly confirm that the remittance of capital contributions before completion of procedures for registration of capital changes is a permitted sequence, thereby improving consistency between foreign exchange management regulations and the capital increase registration process under enterprise law, while also addressing the previous interpretation that an economic organization had to obtain an updated ERC before a bank could receive the capital contribution.

4. Enhancing the mechanism for capital contributions in multiple currencies

Under Circular 06, where an investor uses multiple foreign currencies to make capital contributions, for each foreign currency used, the foreign direct investment enterprise or foreign investor may open one direct investment capital account denominated in that foreign currency at the same authorized bank[24]. Accordingly, allowing capital contributions in multiple foreign currencies is not a new mechanism introduced by Circular 38.

A notable new point under Circular 38 is the introduction of a specific mechanism for determining the total value of capital contributions where contributions are made in multiple currencies. Accordingly, where capital contributions are made in multiple currencies, a foreign investor or Member Enterprise may select one of the contribution currencies recorded in the investment documents as the conversion currency and must use that currency consistently throughout the entire capital contribution process. The total value of capital contributions after conversion must not exceed the amount of capital contribution specified in the relevant investment documents[25].

The new provision provides greater clarity for projects involving multiple investors or multiple funding sources in different currencies, particularly where exchange rate fluctuations may create discrepancies between the total value of capital actually transferred and the amount of capital contribution recorded in the investment documents.

In addition, Circular 38 has removed the mandatory requirement to open an ICA in foreign currency. Under Circular 06, entities required to open a direct investment capital account had to open a foreign currency-denominated direct investment capital account at an authorized bank; where the investment was made in Vietnamese dong, they could open an additional Vietnamese dong-denominated account at the same bank[26]. By contrast, Circular 38 allows applicable entities to open an ICA in foreign currency and/or Vietnamese dong at the same authorized bank[27]. Accordingly, where only capital contributions and capital transactions in Vietnamese dong arise, the account holder only needs to open and maintain an ICA in Vietnamese dong without having to simultaneously open a foreign currency account as previously required.

5. Expanding the mechanism for using recovered capital, profits and lawful income for further investment in vietnam

Under Circular 06, where a foreign investor remits investment capital, profits and other lawful income abroad, such remittance is made through a direct investment capital account[28]. For investment capital, this mechanism applies in cases such as capital reduction, transfer of an investment project, completion, liquidation or termination of an investment project, BCC or PPP contract. In addition, instead of remitting profits abroad, Circular 06 allows profits distributed in Vietnamese dong to a foreign investor to be transferred into the direct investment capital account in Vietnam for capital increase or expansion of investment activities in Vietnam.

Circular 38 continues this mechanism but supplements it in a more flexible manner. In addition to continuing to allow investors to remit capital, profits and lawful income abroad through the ICA, Circular 38 adds the option of retaining such funds in Vietnam for further investment. Specifically, where a foreign investor does not remit capital abroad, the amount may be transferred from the ICA to the foreign investor’s own payment account opened at an authorized bank for the implementation of another project or investment activity in Vietnam in accordance with investment laws[29]. A similar mechanism applies to profits and lawful income that the investor does not remit abroad[30].

Accordingly, a foreign investor wishing to continue investing in Vietnam is no longer required to remit capital, profits or lawful income abroad before remitting them back into Vietnam for a new investment. Instead, amounts received by the investor from investment activities may be retained within the Vietnamese banking system and transferred directly to the investor’s own payment account for use in another project or investment activity. However, retaining and transferring funds under this mechanism does not replace the conditions and procedures applicable to the subsequent investment; the investor must still satisfy the corresponding requirements under investment laws.

Notably, to enable this mechanism to operate in practice, Circular 38 also amends Circular No. 16/2014/TT-NHNN on the use of foreign currency accounts and Vietnamese dong accounts of residents and non-residents, allowing the relevant accounts to receive transfers from the ICA[31].

6. Adding a mechanism for refund of transfer consideration where a transaction is not completed

A new point of practical significance for mergers and acquisitions and project transfer transactions is that Circular 38 expressly includes “refunds of transfer consideration where the transfer is not completed” as an independent receipt and payment transaction through the ICA, applicable to both foreign currency and Vietnamese dong accounts[32].

Circular 06 did not previously contain a specific provision on this refund. In practice, where a transaction is not completed, the refund of funds to the transferee generally has to be processed under the category of “other lawful receipts and payments”, resulting in inconsistent approaches among banks. The new provision provides a clear basis for refunding transfer consideration that has already been paid where the transaction is subsequently not completed, and is also a matter that parties should consider when structuring payment and refund mechanisms in transfer agreements.

7. Adding and specifying compliance obligations for authorized banks and investors

Circular 38 adds and specifies a number of compliance obligations that directly affect the opening and use of ICA at banks. Accordingly: (i) an authorized bank must issue internal regulations on the dossier, sequence and procedures for opening and using an ICA and on cash flow transparency, including a requirement to specify the amount and purpose of each remittance order, and must publicly announce such regulations; (ii) an authorized bank must comply with laws on anti-money laundering and counter-terrorist financing; (iii) after an IRC, ERC or equivalent document is issued or amended, the economic organization must supplement these documents to the bank at which the ICA is opened; and (iv) the Regional State Bank has authority to inspect, examine and supervise the opening and use of ICA and to handle violations[33].

Notably, although Circular 06 previously required banks to verify and retain supporting documents consistent with actual transactions and required investors to truthfully and fully declare transaction details, Circular 38 further specifies the requirement to state the purpose of each remittance order[34]. This provision heightens the importance of identifying and substantiating the purpose of each cash flow, particularly for transactions arising during the period before an IRC is issued, when the ICA may only be used for limited purposes as discussed in Section 2 above.

8. Enhancing the foreign exchange management mechanism for petroleum investment activities

Unlike ordinary investment activities or investment projects, where revenue generated from business activities is not transacted through a direct investment capital account, Circular 06 provided a separate mechanism for petroleum activities. Accordingly, the direct investment capital account was permitted to receive proceeds from domestic sales of petroleum products after financial obligations had been fulfilled and Vietnamese dong-denominated expenses deducted, and funds could also be transferred to the petroleum project operator’s foreign currency payment account for investment activities[35].

Circular 38 continues to retain the special mechanism for cash flows from petroleum activities under Circular 06, while further developing the foreign exchange management mechanism for foreign investors in this sector. Specifically, in addition to continuing to allow the ICA to receive proceeds from domestic sales of petroleum products, Circular 38 adds contractors that are foreign investors under petroleum contracts to the group of entities that open and use ICA[36], and also provides more specific rules for cash flows arising from transfers of investment projects under petroleum contracts and transfers of participating interests and the contractor’s rights and obligations under petroleum contracts, as follows:

(i) Clarifying receipt and payment through ICA for transfer transactions specific to petroleum activities: In addition to capital and investment project transfer transactions already governed by the general mechanism, Circular 38 specifically regulates receipts and payments through ICA for amounts arising from transfers of investment projects under petroleum contracts and transfers of participating interests and the contractor’s rights and obligations under petroleum contracts[37]. This provision clarifies the cash flow management mechanism for forms of transfer specific to petroleum activities that were not specifically regulated under Circular 06.

(ii) Adding rules on the currency of valuation and payment for transfer transactions in petroleum activities: Circular 38 permits the above transfer transactions to be valued and paid in foreign currency where they are conducted between investors that are non-residents or between a foreign investor in petroleum activities in Vietnam and an investor that is a resident[38]. This new provision is intended to align the foreign exchange management mechanism with specialized petroleum laws on transfers of participating interests, the contractor’s rights and obligations, and the use of foreign currency in petroleum activities[39].

The mechanism in item (ii) above is also an exception to the general principle restricting the use of foreign exchange within the territory of Vietnam and the principle requiring valuation and payment in Vietnamese dong for transfers of capital or investment projects between residents and non-residents[40].

9. Certain transitional provisions to note

Circular 38 provides transitional mechanisms for handling accounts and cash flows existing before 18 August 2026, i.e. before Circular 38 takes effect, as follows:

(i) A foreign-invested economic organization that opened a payment account to receive charter capital contributions before Circular 38 takes effect may transfer those capital contributions to an ICA opened under Circular 38[41].

(ii) A foreign investor in petroleum activities that used a payment account to conduct investment transactions before Circular 38 takes effect may continue using the existing account until the opening of the ICA is completed, but must open the new account within 12 months from 18 August 2026[42].

(iii) Circular 38 provides a 12-month period to deal with certain existing ICA that are subject to closure under the new mechanism. Specifically, this transitional period applies to (x) an economic organization that no longer has any foreign investor or Member Enterprise owning shares or capital contributions; and (y) an economic organization that opened an ICA before issuance of an IRC but subsequently was not issued an IRC and refunded the contributed capital to the investor[43].

These transitional provisions are intended to ensure a consistent transition to the foreign exchange management mechanism under Circular 38 without disrupting ongoing investment activities.

10. Recommendations

Circular 38 takes effect on 18 August 2026. In the short term, foreign investors and foreign-invested economic organizations should: (i) review their existing ICA to identify cases in which accounts must be closed and the applicable 12-month transitional period; (ii) for ongoing transactions, reassess the timeline for establishing the legal entity, making capital contributions and payments in light of the mechanism for opening an ICA before issuance of an IRC and the restrictions on use of the account during this period; (iii) consult in advance with the authorized bank regarding dossiers, supporting documents and the purpose code applicable to each type of transaction, as each bank’s internal regulations may differ; and (iv) for transfer transactions, review the payment and refund mechanism for transfer consideration, including the treatment of deposits or advances (if any), to ensure that cash flows are conducted in accordance with the permitted receipt and payment transactions through the ICA.

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[1] Article 18.5 of Circular 38.

[2] Articles 1.2 and 1.3 of Circular 38.

[3] Article 1.1 of Circular 06; Article 1.1 of Circular 38.

[4] Article 2.5 of Circular 38.

[5] Article 3.2(b) of Circular 06.

[6] Articles 11.3(a) and 11.3(b) of Circular 03, amending Articles 3.2(b) and 5.6(a) of Circular 06.

[7] Article 11.4 of Circular 03.

[8] Article 6.1(b), Article 7.5(b)(i) and Article 7.6 of Circular 38.

[9] Article 93.2 of Decree No. 329/2025/NĐ-CP dated 18 December 2025 of the Government on licensing the establishment and operation of banks, foreign exchange management, anti-money laundering, counter-terrorist financing and counter-proliferation financing at the International Financial Centre in Vietnam (“Decree 329”).

[10] Article 3.2(a) of Circular 06.

[11] Article 6.1(a) of Circular 38.

[12] Article 19.2 of Law on Investment No. 143/2025/QH15 dated 11 December 2025 of the National Assembly (“Law on Investment 2025”); Articles 72.1, 72.3 and 72.4 of Decree No. 96/2026/NĐ-CP dated 31 March 2026 of the Government detailing and guiding the implementation of certain articles of the Law on Investment (“Decree 96”).

[13] Article 7.3 of Circular 38.

[14] Article 7.3 of Circular 38.

[15] Article 7.3 of Circular 38.

[16] Article 8.1 of Circular 06.

[17] Articles 5.4 and 7.3 of Circular 38.

[18] Article 4.1 of Circular 38.

[19] Articles 4.1 and 4.3 of Circular 06.

[20] Article 30.2 of Law on Enterprises No. 59/2020/QH14 dated 17 June 2020 of the National Assembly, as amended and supplemented by Law No. 76/2025/QH15 dated 17 June 2025 (“Law on Enterprises 2020”).

[21] Article 123.4 of the Law on Enterprises 2020.

[22] Article 44.1(d) of Decree 168.

[23] Article 4.5 of Circular 38.

[24] Article 5.2(b) of Circular 06.

[25] Article 4.1 of Circular 38.

[26] Articles 5.2(a) and 5.2(c) of Circular 06.

[27] Article 7.1 of Circular 38.

[28] Articles 9.1(a) and 9.1(b) of Circular 06.

[29] Article 11.2 of Circular 38.

[30] Article 12.2 of Circular 38.

[31] Articles 18.4(a) and 18.4(b) of Circular 38.

[32] Articles 8.1(c), 8.2(i), 9.1(c) and 9.2(i) of Circular 38.

[33] Articles 14.2, 14.4, 15.3 and 16.2 of Circular 38.

[34] Articles 11.3 and 12.2 of Circular 06; Articles 14.2, 14.3 and 15.2 of Circular 38.

[35] Articles 6.1(g) and 6.2(a) of Circular 06.

[36] Article 6.4 of Circular 38.

[37] Article 10.4 of Circular 38.

[38] Article 13.2 of Circular 38.

[39] Articles 36 and 58.1 of Petroleum Law No. 12/2022/QH15 dated 14 November 2022; Article 33 and the Model Petroleum Production Sharing Contract issued together with Decree No. 45/2023/NĐ-CP dated 1 July 2023 of the Government detailing certain articles of the Petroleum Law.

[40] Article 22 of Foreign Exchange Ordinance No. 28/2005/PL-UBTVQH11 dated 13 December 2005, as amended and supplemented by Ordinance No. 06/2013/UBTVQH13 dated 18 March 2013; Article 13.3 of Circular 38.

[41] Article 19.1 of Circular 38.

[42] Article 19.2 of Circular 38.

[43] Article 19.3 of Circular 38.

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This Article was prepared by Thao Vu, Paralegal