KEY CHANGES OF CIRCULAR 38/2026/TT-NHNN ON FOREIGN EXCHANGE MANAGEMENT FOR FOREIGN INVESTMENT ACTIVITIES IN VIETNAM

 

On 31 July 2026, the Governor of the State Bank of Vietnam (“SBV”) issued Circular No. 38/2026/TT-NHNN (“Circular 38”), taking effect on 18 August 2026 and replacing Circular No. 06/2019/TT-NHNN (“Circular 06”) on foreign exchange management for foreign investment activities in Vietnam. Circular 06 was developed on the basis of the 2014 Law on Investment and therefore still contains a number of points that are not compatible with the 2025 Law on Investment (“LOI 2025”) and with newly issued instruments, in particular Decree No. 329/2025 on foreign exchange management and anti-money laundering at the International Financial Centre (“Decree 329”). Circular 38 was introduced in order to align the mechanism for managing capital and foreign exchange transactions with the new investment legal framework and, at the same time, to remove a number of practical obstacles in the opening, use and closing of investment capital accounts.

Set out below are the most notable changes, together with our assessment of their necessity, their consistency with the related regulations and their impact on capital transfer activities.

1. Adoption of the concept of “investment capital account”

Circular 38 replaces the term “direct investment capital account” with “capital account for foreign investment in Vietnam” (“Investment Capital Account”), applicable to the entities required to open such an account upon contributing capital or paying for the purchase of shares or capital contribution portions. This is a necessary adjustment because LOI 2025 no longer classifies investment as direct or indirect. In addition, the name Investment Capital Account will be appropriate for new entities such as member enterprises or PPP project enterprises established by foreign investors.

2. Adjustment and expansion of the group of entities required to open an investment capital account

Circular 38 amends the group of entities required to open an Investment Capital Account to include:

• In respect of investment in the form of capital contribution or purchase of shares or capital contribution portions, a foreign-invested economic organization must open an Investment Capital Account where the ownership ratio of foreign investors exceeds 50%. In practice, this content has already been dealt with under Article 11.3 of Circular No. 03/2025/TT-NHNN (effective from 16 June 2025) on the opening and use of Vietnamese dong accounts for the conduct of foreign indirect investment activities in Vietnam;
• Adding economic organizations established by foreign investors upon enterprise registration prior to applying for an Investment Registration Certificate (“IRC”), so as to align with the investment procedure for the establishment of an economic organization elected by foreign investors under Article 19.2 of LOI 2025; and
• Adding member enterprises established in the International Financial Centre in Vietnam (“IFC”). This addition is necessary in order to create a legal basis for capital flows into and out of the IFC in line with Decree 329.

3. Allowing the opening of an investment capital account immediately upon enterprise registration

For an economic organization established by a foreign investor under the business registration procedure prior to the issuance of the IRC, Circular 38 allows the opening of an Investment Capital Account immediately after the Enterprise Registration Certificate (“ERC”) has been granted.

This provision remedies the legal gap between the time of establishment of the enterprise and the time at which a capital account is available for capital contribution. It is at the same time an important change enabling foreign investors to elect to establish an economic organization under the business registration procedure first, thereby ensuring compliance with the 90-day capital contribution time limit under the Law on Enterprises.

4. Requiring the completion of the transfer of contributed capital before carrying out the procedure for registration of an increase in charter capital

Circular 38 clearly stipulates that investors and member enterprises shall transfer money into the Investment Capital Account in order to contribute capital or to change their capital contribution portion or capital contribution ratio, before the economic organization registers an increase in its charter capital.

This provision resolves a practical obstacle, since some banks previously required the presentation of, or an undertaking to submit, a licence (IRC or ERC) reflecting the adjusted capital contribution or the updated charter capital before permitting money to be transferred into the capital account, whereas under the Law on Enterprises the contribution of capital must be completed before registration of the change in charter capital.

Unifying this interpretation helps economic organizations and banks agree on the documents required for capital to be received into the Investment Capital Account, reducing undertaking documents and eliminating the inconsistency between banking procedures and enterprise registration procedures.

5. Recognition of the opening of capital accounts in foreign currency and/or Vietnamese dong

Under Circular 38, the entities required to open an account may open 01 account in foreign currency and/or 01 account in Vietnamese dong at the same authorized bank, instead of being required to open one foreign currency account or one Vietnamese dong account as under Circular 06. The “and/or” mechanism properly reflects the practice of capital contribution and share purchase transactions in economic organizations having both foreign investors and domestic investors.

6. Mechanism for the transfer of money for the investment preparation stage through the capital account

Circular 38 clarifies the mechanism for recognizing lawful payments made by foreign investors for the investment preparation stage; after the economic organization has been licensed, the amounts already paid will be recognized as part or all of the contributed capital or of foreign loan capital, or refunded to the investor.

This provision is significant for capital lawfully spent by foreign investors during the investment preparation stage: such capital will be recognized as contributed capital or loan capital without being required to pass through the Investment Capital Account while the economic organization has not yet been established. Where the investor elects a refund, such payment shall be refunded by the economic organization in accordance with the regulations.

7. Addition of a mechanism for the refund of capital where the investment project is not approved

An Investment Capital Account opened prior to the issuance of the IRC may be used only to receive charter capital and interest arising on the account balance, to pay lawful expenses for the investment preparation stage, and to refund capital to the investor where the IRC is not granted.

This is a necessary addition, directly supporting the “establish the enterprise first – apply for the IRC afterwards” mechanism under Article 19.2 of LOI 2025: where capital has already been transferred into Vietnam but it remains uncertain whether the project will be approved, in the absence of a refund mechanism the investor would have no basis on which to recover the capital already contributed.

8. Addition of the entities subject to the rules on payment of transfer consideration through the capital account

Circular 38 adds member enterprises (IFC) to the group of entities governed by the provisions on payment of the transfer value of shares and capital contribution portions. Transactions between a member enterprise and an investor who is a resident must be made through the Investment Capital Account; conversely, transactions among member enterprises themselves, or with an investor who is a non-resident, are not required.

This delineation is consistent with the particular characteristics of the operations of enterprises within the IFC and with Decree 329.

9. Addition to the scope of “capital reduction” in respect of which capital may be transferred through the Investment Capital Account

Circular 38 replaces “reduction of investment capital” with “capital reduction”. This is a necessary adjustment because, in practice, the transfer of capital abroad arises not only from a reduction of investment capital – a concept found only in the Law on Investment – but also from a reduction of charter capital under the Law on Enterprises.

In addition, Article 11.2 of Circular 38 further provides that, if the capital is not transferred abroad or into the IFC, the investor may transfer that amount from the Investment Capital Account to a payment account in order to continue investing in another project in Vietnam, thereby creating a further flexible channel for the use of capital and increasing investment opportunities for other projects of investors and member enterprises in Vietnam.

10. Clearer provisions on the cases in which an investment capital account must be closed and may be maintained

Circular 38 clarifies three cases:

• The account may continue to be maintained and is not required to be closed if it is being used to repay a foreign loan or other lawful payment obligations;
• The account must be closed where the economic organization is dissolved, becomes bankrupt or terminates its operation; and
• The account must be closed where the transfer of the investment project results in a change in the legal entity of the economic organization using the account.

Specifying each group remedies the lack of clarity under Circular 06 and creates a basis for account-servicing banks to apply uniform procedures upon receipt of a customer’s request to close a capital account.

Our implementation recommendations

In order to ensure compliance with Circular 38 as from 18 August 2026, we recommend that foreign investors and foreign-invested economic organizations review and address the following groups of situations:

• For direct investment capital accounts already opened under Circular 06

Discuss and work with the account-servicing bank in order to update the name and the legal file of the account so as to conform to the unified term “Investment Capital Account”, thereby avoiding obstacles when carrying out subsequent capital transfer transactions.

• For foreign investors electing to establish the enterprise before the IRC is granted

An Investment Capital Account should be opened immediately upon obtaining the Enterprise Registration Certificate, without waiting for the IRC, so as to ensure that capital is contributed into the Investment Capital Account within the prescribed time limit.

• For member enterprises within the International Financial Centre

Classify intra-bloc transactions and transactions with non-resident investors in order to determine which transactions must be paid through the capital account, thereby avoiding administrative violations relating to foreign exchange management.

The above comments constitute a legal update for Clients only. Should specific legal advice be required, please contact DIMAC’s team of lawyers at the following details:

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