When investing in the Chinese market, Vietnamese investors must pay close attention to both China’s domestic legal framework and Vietnam’s regulations on outbound investment, in particular the Law on Investment 2020 and its guiding regulations.

First, under Vietnamese investment law, outbound investment may only be carried out if it falls within permitted business lines, is implemented through an approved outbound investment project, is granted an outbound investment registration certificate, and complies with regulations on capital transfer, foreign exchange management, and periodic reporting. Any transfer of funds for improper purposes or beyond the approved scope of the project may result in serious penalties.

Second, in China, the investment environment is subject to strict regulation under the Foreign Investment Negative List. Investors must carefully review whether the intended business sector is restricted or prohibited, and whether it is subject to requirements such as mandatory joint ventures or special conditions on foreign ownership ratios.

Third, significant risks arise from the enforcement of laws, investor protection mechanisms, the repatriation of profits, and contractual disputes. Investment agreements should clearly stipulate the governing law, dispute resolution mechanisms, and partner control arrangements.

HNLAW recommends that investors conduct parallel legal due diligence in both Vietnam and China, establish an appropriate investment structure, and fully comply with outbound investment regulations in order to mitigate legal risks.