Foreign Investment Restrictions and Business Conditions for Investing in Solar Power Plant Projects in Vietnam

For companies interested in foreign investment in solar power projects in Vietnam, a Vietnamese attorney provides a clear explanation of foreign investment restrictions, investment licensing, Power Purchase Agreements (PPAs), land use rights, and whether a local partner is required. NEXORA Law Firm has extensive experience supporting Japanese companies investing in solar and wind power projects, including project finance, M&A, and structuring foreign capital contributions, and provides one-stop support covering legal matters, licensing, and contract negotiation.

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1. Business Code

Business Name:

Official Business Name Under Vietnamese Law

CPC Code

VSIC Code

Power generation business

(specifically: solar power plant business)

None

3511

(specifically: 35116)

2. Foreign Investment Restrictions on Investment in Solar Power Plant Projects in Vietnam

(1) There are no foreign ownership restrictions on foreign investors or foreign-invested companies

in the solar power business in Vietnam. They are treated the same as domestic companies, and foreign investors or foreign-invested companies may either establish a wholly foreign-owned (100%) entity to carry out a solar power plant project or acquire one through M&A.

(2) Restrictions on Power-Related Businesses Other Than Power Generation

With respect to the power sector, the following areas other than power generation are subject to restrictions.

Power Sector Activity

Scope of Permitted Activity

Power generation

100% foreign ownership is permitted, except for the construction and operation of multi-purpose hydropower plants and nuclear power plants of particular socio-economic importance.

Power transmission

State monopoly

Coordination of the national power system

State monopoly

Power distribution

100% foreign ownership is permitted (subject to entering into a power purchase agreement with EVN).

Power wholesale and retail

Partially monopolized by EVN.

Partially liberalized (see Decree No. 80/2024/NĐ-CP dated July 3, 2024, regarding the DPPA market).

Specialized consulting services in the power sector

100% foreign ownership is permitted.

3. Market Entry Structures and Schemes

The typical schemes for new investment or M&A in a solar power plant project are as follows.

Order

Form of Project Development

1

Self-development (Independent Power Producer, IPP)

100% foreign ownership or joint venture

2

M&A

1. Purchasing the shares or capital contribution of a company carrying out a solar power plant project

2. Acquiring transfer of a solar power plant project

3

Investment through a Business Cooperation Contract (BCC)

4

Investment through project finance

5

Investment through Public-Private Partnership (PPP)