Aiming for the goal of upgrading and developing Vietnam’s securities market, on 29 April 2025, the State Bank of Vietnam issued Circular No. 03/2025/TT-NHNN (“Circular 03”) regulating the opening and use of accounts in Vietnamese dong for conducting foreign indirect investment activities in Vietnam. Effective from 16 June 2025, Circular 03 introduces significant amendments to simplify administrative procedures, remove legal barriers, and facilitate a more favorable investment environment for foreign investors. Circular 03 is considered a progressive step aligned with the requirements for foreign exchange management in the context of a new phase of financial market development, with several notable changes as follows:

1. Simplifying procedures for opening indirect investment accounts

The procedure for opening indirect investment accounts (“IIA”) has been considerably simplified compared to previous regulations. To be specific, when opening an IIA for investing in Vietnam’s securities market, Circular 03 no longer requires consular legalization of documents, information, data in foreign languages, and documents issued by competent foreign authorities. Instead, such documents are only required to be notarized or certified in accordance with the laws of Vietnam or foreign laws within 12 months up to the date on which the bank licensed to open the IIA receives the application dossier [1]. The bank may agree with the client on whether or not to translate such documents into Vietnamese, and may proactively verify, examine, and take responsibility for the contents of those documents [2].

The removal of consular legalization requirements reduces unnecessary legal barriers, shortens account-opening time, and enables foreign investors to timely seize investment opportunities. At the same time, this provision enhances the autonomy of commercial banks while still ensuring compliance with foreign exchange management and anti-money laundering regulations.

2. Allowing the opening of multiple indirect investment accounts corresponding to each granted securities trading code

One notable change introduced by Circular 03 is that it allows the opening of multiple IIAs under specific circumstances as prescribed therein. According to the general principle, each foreign investor may open only one IIA to conduct foreign indirect investment activities in Vietnam [3]. However, Circular 03 has supplemented several exceptions allowing the opening of additional IIAs corresponding to each securities trading code to ensure consistency with the securities law [4], specifically:

• A foreign investor being a foreign securities company may open two (02) IIAs corresponding to two (02) granted securities trading codes: one (01) IIA for its proprietary trading activities and one (01) IIA for its securities brokerage activities;
• A foreign investor being a foreign investment fund or a foreign organization managed by multiple foreign fund management companies may open additional IIAs corresponding to each granted securities trading code, in which each portfolio managed by a separate foreign fund management company may open one (01) IIA corresponding to one (01) granted securities trading code; a portfolio self-managed by the foreign fund or organization that has been granted one (01) separate securities trading code may open one (01) corresponding IIA;
• A foreign investor being a foreign government investment organization, or a foreign financial or investment institution under an international financial institution of which Vietnam is a member, may open additional IIAs corresponding to each granted securities trading code, where each portfolio deposited with a custodian bank that has been granted one (01) securities trading code may open one (01) corresponding IIA.

3. Managing capital flows and enhancing transparency

Circular 03 requires that all inflows and outflows related to foreign indirect investment activities in Vietnam by foreign investors must be conducted through an IIA, which is a payment account in Vietnamese dong at a licensed bank [5]. Foreign investors are not permitted to transfer the balance of an IIA to term deposits or savings deposits [6]. Notably, Circular 03 requires that all transfer orders must clearly state the purpose of the transfer so that the bank has a basis to reconcile, verify, keep records, and execute the transaction [7]. These regulations help competent authorities to strengthen control over capital flows and enhance transparency in foreign indirect investment transactions of foreign investors in Vietnam.

4. Change in foreign ownership ratio for determining enterprises having foreign direct investment capital

Circular 03 revises the threshold for determining whether an enterprise is classified as having foreign direct investment. Accordingly, enterprises in which foreign investors hold more than 50% of charter capital (instead of “51% or more” as previously stipulated) are now considered enterprises having foreign direct investment [8]. Accordingly, such enterprises are subject to the requirement to open and use direct investment capital accounts. This change is particularly important and should be noted by foreign investors to ensure proper use of investment accounts in accordance with the law.

No later than 12 months from the effective date of Circular 03, enterprises with foreign investors holding more than 50% but less than 51% of charter capital must open direct investment capital accounts [9]. During the transition period, foreign investors may continue to use existing IIAs for transactions relating to capital contributions, share purchases, and equity acquisitions in those enterprises.

The foregoing highlights several notable provisions of Circular 03. In the context of Vietnam’s ongoing efforts to attract foreign direct investment, the progressive regulations introduced by Circular 03 are expected to serve as a key driver for improving the legal framework, reforming the investment environment, and enhancing Vietnam’s international competitiveness. 

1. Article 5.4(a) of Circular No. 03/2025/TT-NHNN.
2. Article 5.4(b) of Circular No. 03/2025/TT-NHNN.
3. Article 5.1 of Circular No. 03/2025/TT-NHNN.
4. Article 145.2 of Decree No. 155/2020/ND-CP provides that foreign securities companies, foreign investment funds, and foreign government investment organizations, among others, may be granted more than one securities trading code.
5. Article 3.2 of Circular No. 03/2025/TT-NHNN.
6. Article 3.5 of Circular No. 03/2025/TT-NHNN.
7. Article 3.7 of Circular No. 03/2025/TT-NHNN.
8.  Article 11.3 of Circular No. 03/2025/TT-NHNN.
9. Article 11.4 of Circular No. 03/2025/TT-NHNN.

Disclaimer: This publication is for general update. This should not constitute our professional advice for a particular case, entity, or individual. Should you need further information or our professional assistance for your specific cases, please feel free to contact us.

Credit: We extend our sincere appreciation to Partner Ha Bui and Trainee Associate Thuy Pham for their valuable expertise and dedicated contributions to this article.