Why do so many foreign investment applications in Vietnam get returned or delayed by licensing authorities? Despite Vietnam’s open investment policy, a significant number of foreign investors face unexpected setbacks during the approval process. This article explains the most common legal and procedural reasons why foreign investment dossiers are returned—and how investors can avoid costly delays.
Vietnam actively promotes foreign direct investment (FDI) and offers numerous incentives to international investors. However, openness does not mean leniency. Investment authorities apply strict legal scrutiny to ensure compliance with the Law on Investment, sector-specific regulations, WTO commitments, and national security considerations.
As a result, many foreign investment applications are returned for revision, not because the project is prohibited, but because the dossier does not fully meet legal or procedural requirements.
Understanding these reasons helps investors prepare accurate applications and shorten approval timelines.
When an application is returned, it usually means:
The authority requests clarification or supplementation
The dossier contains legal or technical deficiencies
The proposed structure conflicts with existing regulations
The authority needs additional explanation before approval
A returned dossier is not necessarily rejected—but repeated returns can delay projects by months.
One of the most common reasons for returned applications is unclear or inconsistent project information.
Foreign investors often describe business activities too broadly, such as:
“General trading”
“Technology services”
“Investment and consulting”
Vietnamese authorities require precise classification of business lines. Vague descriptions raise concerns about whether the project falls into restricted or conditional sectors, leading to requests for clarification or revision.
Applications are frequently returned when there are inconsistencies between:
The investment proposal
The company charter
Capital contribution plans
Lease agreements
Shareholder information
Even small discrepancies—such as mismatched addresses or capital figures—can trigger a return for correction.
Many foreign investment dossiers are returned because the proposed ownership structure does not comply with legal limitations.
Foreign investors often assume that:
100% foreign ownership is always allowed
WTO commitments automatically permit all activities
A Vietnamese partner can be added later
In reality, sectors such as advertising, logistics, education, travel services, and media are subject to foreign ownership caps or mandatory joint ventures. If the ownership structure is non-compliant, authorities will return the application for restructuring.
Some investors attempt to bypass approval by using capital contribution or share acquisition methods without checking whether prior approval is required. This often leads to the dossier being returned or suspended.
Land-related issues are another major cause of returned applications.
Authorities may return applications if:
The lease term does not match the project duration
The lessor lacks valid land-use rights
The leased property is not zoned for the proposed business
The lease is signed before obtaining investment approval
For FDI projects, location legality is a critical review factor.
If a project involves land in:
Border areas
Coastal zones
Areas affecting national defense or security
the authority may require additional review or reject the location outright, leading to a returned application.
Administrative deficiencies are among the most frequent reasons for returned dossiers.
All foreign documents—such as passports, certificates of incorporation, or financial statements—must be:
Notarized
Consular legalized
Translated into Vietnamese
Notarized in Vietnam
Failure at any step almost always results in the dossier being returned.
Authorities often require evidence that the investor can fund the project. Applications may be returned if:
Bank statements are outdated
Financial reports are unclear
Funding sources are not explained
This is especially common for capital-intensive projects.
Capital-related issues raise red flags during review.
Authorities may return applications where:
Capital contribution timelines are too aggressive
Capital amounts do not match the project scale
Funding plans lack feasibility
Vietnam expects capital plans to be realistic and implementable.
If the source of funds cannot be clearly explained—especially for corporate investors—authorities may require additional clarification before proceeding.
Many investment sectors in Vietnam are conditional, requiring additional explanations or approvals.
Applications are often returned when investors fail to explain how they meet conditions related to:
Professional qualifications
Experience requirements
Operational standards
Licensing prerequisites
This commonly affects advertising, education, logistics, fintech, and healthcare projects.
Some business activities require additional permits beyond IRC and ERC. If these are not addressed in the application, authorities may return the dossier for clarification.
Beyond legal errors, strategic missteps also contribute to returned applications.
Many investors rely on templates or incomplete advice, resulting in:
Poorly structured dossiers
Missing explanations
Inconsistent documentation
Professional legal review significantly reduces the risk of returns.
Although laws are national, implementation varies by province. Investors unfamiliar with local practices often face additional document requests and delays.
Many foreign investment applications in Vietnam are returned not because the projects are unviable—but because of avoidable legal and procedural mistakes. Inaccurate business scope, ownership non-compliance, land issues, documentation errors, and lack of preparation are the most common causes.
With proper legal guidance, foreign investors can significantly reduce delays and secure approvals efficiently.
Is your foreign investment application facing delays or repeated returns?
Contact DEDICA Law for expert legal support to review, restructure, and accelerate your investment approval process.
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