The Advantages of Investing in Vietnam | Three Special Preferential Treatments Available to Foreign Investors

While foreign investors face stricter conditions than domestic investors in some respects, certain measures work in their favor.

01 - Investor Protection Mechanisms
When an investment dispute arises, foreign investors may pursue international arbitration under the Japan-Vietnam Investment Agreement (signed in 2003), including ICSID arbitration or arbitration under the UNCITRAL Arbitration Rules. The arbitral award is final and binding on both parties — a special mechanism that is not available to domestic Vietnamese investors.

02 - Special Regime for Cross-Border Personnel Transfers
Under an intra-corporate transferee arrangement, a foreign employee who has been employed by the transferring entity for at least 12 months can obtain a Vietnamese work permit without needing to conclude a new labor contract, and is exempt from Vietnam's Labor Code and compulsory social insurance obligations. This regime also allows companies with no overseas establishment of their own to directly and flexibly employ Vietnamese residents.

03 - Free Choice of Governing Law for Contracts and Transactions Involving a Foreign Element
For contracts and transactions containing a foreign element, the parties may freely choose Vietnamese law, Japanese law, or the law of a third country as the governing law, and may likewise freely select the dispute resolution forum — a freedom that is not available in purely domestic transactions.