The Ministry of Finance (MoF) has proposed scrapping the approval process for outbound investment projects and replacing it with a foreign-exchange-based management system.

Customers registering for services at Halotel, Viettel’s subsidiary in Tanzania. Photo: Viettel

The proposal, outlined in the draft revised Law on Investment, would eliminate the requirement for project approval currently under the authority of the National Assembly, the Prime Minister and the Ministry of Finance.

Instead, investors would register their overseas fund transfers with the State Bank of Vietnam (SBV) after obtaining the necessary foreign approvals, such as an investment license, a certificate of incorporation, or contracts for equity purchases in foreign companies.

According to the ministry, removing the licensing requirement would make outbound investment oversight more substantive and aligned with actual capital flows.

“The new approach would reduce administrative procedures, save time and costs for investors, and improve the competitiveness of Vietnamese businesses. It would also allow companies to act quickly on overseas opportunities, expand markets, develop supply sources, and contribute to the domestic economy,” noted the agency.

Under the proposed system, the SBV would monitor and compile statistics on outbound investments to assess and adjust policies if they affect the balance of payments or foreign exchange reserves. Banks could act against non-compliant investors by suspending transfers or freezing investment capital accounts.

Current regulations control outbound investment by listing prohibited and conditional business sectors and issuing investment registration certificates. Large-scale projects, those with capital of at least VND20 trillion (US$784 million) or requiring special policy mechanisms, must be approved by the National Assembly.

The prime minister decides on projects worth VND800 billion ($31 million) or more, and in banking, insurance, securities, media, or telecommunications, with capital exceeding VND400 billion ($15.7 million).

As of the end of June, Vietnam had 1,916 active overseas investment projects worth a total of US$23 billion. More than 67% had capital below VND20 billion ($784,000), while nearly one-third were over VND20 billion but accounted for 98.3% of total capital. Smaller projects under VND1.2 billion ($47,000) are currently subject to the prime minister’s approval or require an investment registration certificate.

The MoF noted that overseas expansion is becoming increasingly common for Vietnamese firms, bringing benefits such as market access, revenue growth, technology transfer, improved management practices, and cost savings. It argued that licensing reform is needed to address practical shortcomings, safeguard state oversight, and expand business freedom.

At present, investors must complete multiple approval steps, including detailed reviews of the project’s format, scale, location, and funding sources. The ministry views this as inefficient, especially since most outbound capital is private, projects must comply with host-country laws, and Vietnamese legislation does not clearly distinguish between matters under domestic jurisdiction and those regulated abroad.

Another issue is that the current system focuses on pre-approval but has limited mechanisms to hold investors accountable after funds have been transferred overseas. In reality, the key objective for investors is to execute foreign-exchange transactions to carry out business abroad. Cumbersome procedures can cause them to miss opportunities, particularly in deals requiring swift decisions.

Citing international experience, the ministry said most countries control cross-border capital flows through the banking system and impose bans or restrictions only in certain cases to protect macroeconomic stability and ensure lawful sources of funds.

Vietnam, Laos, and Indonesia are the only countries still requiring licenses for outbound investment, while others have moved to systems in which investors declare and register their outbound capital transfers with banks.