How is FDI Investment in E‑commerce in Vietnam?

E‑commerce is one of the fastest‑growing sectors in Vietnam, especially after the pandemic and the global wave of digitization. With over 100 million people, a growing middle class, and an Internet user rate exceeding 75%, Vietnam is considered a highly potential market for foreign direct investment (FDI) in the e‑commerce field. However, to invest successfully in this sector, investors need to understand legal regulations, opportunities, and potential barriers. So what is the appropriate approach to investing FDI into Vietnam’s e‑commerce? Let’s explore with DEDICA Law Firm in this article.

Overview of FDI Investment in E‑commerce in Vietnam
Foreign direct investment (FDI) in e‑commerce refers to foreign investors contributing capital, acquiring shares, or establishing companies operating in online sales, e‑commerce platforms, or supporting services related to e‑commerce. According to the current Investment Law and E‑commerce Law, this is a conditional business sector for foreign investors. Although Vietnam does not prohibit FDI in this area, there are certain limits and procedures that must be complied with to ensure legality and long‑term sustainability.

Common Models of FDI Investment in E‑commerce
In Vietnam, foreign investors commonly enter the e‑commerce market through three main models:

Setting up a company wholly foreign‑owned
This form is suitable for investors with international experience who want full control over their business operations in Vietnam. However, to be licensed, enterprises must satisfy a number of legal conditions such as obtaining a license for an e‑commerce platform, ensuring adequate IT infrastructure, storing data in Vietnam, and complying with consumer protection regulations.

Joint venture with Vietnamese partner
This model is quite common and preferred because it helps investors leverage local advantages such as logistics systems, market understanding, and relationships with state agencies. Joint ventures also help shorten licensing time and reduce initial legal risk.

Mergers & acquisitions (M&A)
Instead of building from scratch, investors can acquire capital interests or shares in existing e‑commerce companies. This approach enables fast market access, inherits an established ecosystem, but requires full legal process, especially legal due diligence to avoid latent risks.

Legal Barriers That FDI Investors Need to Note
Although Vietnam is gradually opening to foreign investors, e‑commerce still has many legal obstacles:

Limits on foreign ownership ratio
According to Vietnam’s WTO commitments, some e‑commerce activities such as cross‑border service provision or e‑commerce platforms may apply restrictions on foreign ownership ratio or require foreign investors to form joint ventures with domestic firms.

Complex licensing procedures
A major challenge is applying for an E‑commerce Platform License, where the enterprise must prove technological capability, data security policy, ability to protect consumer rights… This process can be lengthy and may be rejected if the dossier is incomplete or does not meet standards.

Compliance with personal data and cybersecurity regulations
Decree 13/2023/NĐ‑CP and the Cybersecurity Law require enterprises that collect user data in Vietnam to store it in servers located inside the country and implement adequate data protection measures. This is a point where many FDI enterprises face difficulty if not prepared well from the start.

Legal Advice for Effective FDI Investment in E‑commerce
With experience in investment and corporate legal matters, DEDICA Law Firm has successfully supported many foreign investors in e‑commerce projects in Vietnam. Here are our practical recommendations:

Prepare a comprehensive legal strategy from the beginning
Before making investment decisions, investors should build a full legal strategy, including the plan for company establishment, ownership structure, cooperation contracts with Vietnamese partners, and necessary license applications.

Conduct thorough legal due diligence when pursuing M&A
If choosing to acquire an existing e‑commerce company, legal due diligence helps assess legal status, taxation, contracts, and potential violations of laws of the target enterprise. This is an important step to avoid unnecessary risks later.

Advice to ensure compliance with regulations on technology, data, and consumer protection
E‑commerce is regulated by many specialized laws: E‑commerce Law, Consumer Protection Law, Cybersecurity Law, Intellectual Property Law… Investors need to ensure their technology platforms are not only modern but also legally compliant in Vietnam.

Plan investment and business model in alignment with Vietnam’s market culture
Finally, to succeed, FDI investors need to adapt to consumer characteristics, shopping behaviors, and local cultural habits. This is the strength of joint ventures and local advisory teams like DEDICA, who both understand the law and the market.

FDI investment in Vietnam’s e‑commerce sector opens many opportunities but also hides quite a few challenges. Investors must be well prepared legally, understand the legal framework, and choose a suitable model to implement effectively. Partnering with a deep‑specialized and experienced advisory firm like DEDICA will help investors optimize their investment strategy and ensure law compliance in the most rigorous way.

DEDICA Law Firm is proud to be a trusted legal partner of many FDI companies in technology and e‑commerce. We offer full legal services from investment consultation, license application, contract drafting, negotiation, M&A to dispute resolution.

Contact DEDICA Law Firm for specialized legal advice now!
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