Profile
Vietnamese
What is Foreign Portfolio Investment? Forms of FPI in Vietnam
Foreign portfolio investment or FPI investment is similar to the acquisition of major assets between countries to control interests in multinational companies. International FPI capital flows can transfer assets such as cash, bonds, stocks between countries because the main goal is profit. In this article, Siglaw would like to share in detail the basic contents of the form of FPI investment in Vietnam.
What is Foreign Portfolio Investment (FPI)?
Foreign Portfolio Investment (FPI) is the English name for Foreign Portfolio Investment and is abbreviated as FPI. This is a form of investment in which investors invest capital but do not directly take control of the management and operation of the enterprise, but through a third party use their capital to control and carry out investment activities.
| ✅ Services | FPI investment in Vietnam |
| ✅ Support | Siglaw dedicated nationwide consulting |
| ✅ Hotline | Contact 0961 366 238 for detailed quote |
| ✅ Reputation | Experienced lawyers quickly handle investment documents and procedures |
What are the characteristics of foreign portfolio investment FPI?
First, this is a passive investment of enterprises through financial assets, which is different from direct investment FDI, which is an investment of foreign investors to earn profits through enterprises in the country receiving the investment.
Second, the role of investors in the case of FPI investment is a passive role in foreign companies, not directly participating in enterprise management; different from FDI investment, investors participate in an active role, directly managing the invested enterprise;
Third, the investment period of FPI is short-term, while that of FDI is long-term;
Fourth, FPI investors invest through financial assets; different from FDI, investors invest through financial or non-financial assets: resources, technical know-how, securities, etc.;
Fifth, the result of FPI is that investors will transfer capital, and investors can easily circulate finance because the investment asset is only a financial asset; for FDI investment, it will be the transfer of money, technology and other resources.
The role of FPI investment activities
The financial resources that enterprises receive will be a useful resource to promote business development while still maintaining the right to operate in production and business; And these enterprises still have the opportunity to access management skills, improve transparency and business efficiency in the process of attracting investment sources.
Along with FDI, FPI capital plays an important role in the economy, especially in developing countries, contributing to stimulating consumption, increasing workers’ income, thereby improving the living standards of society;
FPI investment activities help the financial market of the investment recipient country to be improved positively, in order to meet the requirements of foreign investors; International standards are also widely disseminated and applied in many areas of the economy; thereby the management capacity of the state is also improved to meet the requirements of the economy.
FPI resources help to compensate for capital shortages for private enterprises, when domestic bank capital sources cannot meet the demand.
Foreign Indirect Investment Entities in Vietnam
- Foreign investors are non-residents;
- Individuals and organizations involved in FPI investment activities in Vietnam;
Principles for implementing FPI investment in Vietnam
- FPI investment activities must be conducted in VND;
- Investment transactions must be conducted through indirect investment capital accounts at licensed banks;
- FPI investors must comply with the provisions of Vietnamese law;
- The amount in the investor’s investment capital account cannot be transferred to term deposits and savings deposits at credit institutions or foreign bank branches;
Forms of FPI investment in Vietnam
- Contributing capital, buying and selling shares and capital contributions of foreign investors not in cases prescribed by law; or in enterprises with shares listed or registered for trading on the stock exchange;
- Buying and selling bonds and other types of securities on the Vietnamese stock market.
- Buying and selling other valuable papers in Vietnamese Dong issued by resident organizations permitted to issue in Vietnam.
- Entrusting investment in Vietnamese Dong through fund management companies, securities companies and organizations permitted to perform investment trust services in accordance with the provisions of the law on securities;
- Entrusting investment in Vietnamese Dong through credit institutions and foreign bank branches permitted to perform investment trust services in accordance with the provisions of the State Bank.
- Contributing capital and transferring capital contributions of foreign investors in securities investment funds and fund management companies in accordance with the provisions of the law on securities.
- Other forms of indirect investment as prescribed by law.
The above are basic issues on foreign indirect investment in Vietnam. If there are any unclear issues, readers should contact Siglaw law firm for the most detailed advice.
Head office in Hanoi: No. 44/A32 – NV13, Area A Glexemco, Le Trong Tan Street, An Khanh, Hoai Duc, Hanoi.
Email: [email protected]
Southern branch: A9.05 Block A, Sky Center Building, No. 5B Pho Quang Street, Ward 2, Tan Binh District, Ho Chi Minh City.
Central branch: 177 Trung Nu Vuong, Hai Chau District, Da Nang City
Email: [email protected]
Hotline: 0961 366 238
Facebook: https://www.facebook.com/hangluatSiglaw
| Company formation services | Siglaw provides full-package company establishment and business establishment services nationwide. |
| Register for business license | Procedures for individuals and organizations to be allowed to do business |
| Work permit service | Help customers shorten the time to receive work permits, consult and support to prepare complete documents |
| Sublicense service | With many years of experience consulting on applying for all kinds of sub-licenses. |
| Temporary residence card service | Ensure to provide good quality service |
| Regular legal advice services | A team of highly qualified legal consultants ensures compliance with the law |
| Overseas investment services | Consulting on completing documents and procedures for quick overseas investment. |
Phone: (+84) 961 366 238
Email:
Headquarters: No.44/A32-NV13, Gleximco A, Le Trong Tan street, An Khanh, Hoai Duc, Ha Noi, Vietnam.
Southern branch: A9.05 BLOCK A, SkyCenter Building, 5B Pho Quang Street, Ward 2, Tan Binh District, Ho Chi Minh City, Vietnam.
Central branch: 177 Trung Nu Vuong, Hai Chau District, Da Nang City
Facebook: https://www.facebook.com/hangluatSiglaw
