Legal Update: Circular 03/2025/TT-NHNN on Indirect Investment Capital Accounts

On 29 April 2025, the State Bank of Vietnam (SBV) issued Circular No. 03/2025/TT-NHNN, introducing significant amendments to the regulations on indirect investment capital accounts (IICAs) held by foreign investors in Vietnam. This Circular aims to streamline the opening and operation of IICAs, enhance transparency, and align domestic practices with international standards governing portfolio investments and cross-border capital flows.

Key Highlights

1. Use of Domestic Payment Accounts by Resident Foreign Investors

Foreign investors legally classified as Vietnamese residents (e.g., those holding temporary residence cards) may now conduct indirect investment activities using their VND payment accounts opened at a licensed bank, without the need to open an IICA.

2. Additional IICAs Permitted in Specific Cases

While the general rule limits each foreign investor to one IICA, the Circular allows exceptions in the following cases:

• Foreign securities companies may open two IICAs—one for proprietary trading and another for brokerage activities, corresponding to each securities trading code.

• Foreign investment funds or organizations managed by multiple fund managers may open separate IICAs for each portfolio, corresponding to each securities trading code granted.

• Government-affiliated or international financial institutions may also open additional IICAs for each investment portfolio registered with a custodian bank and granted a securities trading code.

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3. Simplification of Documentation Requirements

The Circular reduces administrative burdens by removing the requirement for legalization of supporting documents. Key provisions include:

• Documents must be notarized or certified in accordance with Vietnamese or foreign laws, and dated within 12 months of submission.

• Translation into Vietnamese is not mandatory, unless requested by competent authorities. In such cases, translations must be either certified by the authorized bank or notarized.

• Authorized banks must verify and retain responsibility for the accuracy of foreign-language documents and ensure compliance with the Circular.

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4. Expanded Scope of Permitted Transactions

The Circular expands the allowable inflows and outflows through IICAs:

• Inflows now include:

  • Transfers of interest and lawful revenues related to certain share transactions;

  • Transfers from previously opened IICAs when switching to a different authorized bank.

• Outflows include:

  • Payments for losses and expenses incurred from specific securities transactions;

  • Transfers to newly opened IICAs when changing banks.

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5. Transition Requirement for Certain FDI Enterprises

Enterprises in which foreign investors hold more than 50% but less than 51% of charter capital must open a direct investment capital account (DICA) within 12 months from the Circular’s effective date, which is 16 June 2025. 

During the transition period, foreign investors may continue using existing IICAs to conduct transactions related to capital contributions or share purchases in such enterprises.

How Van Pham LLC Can Assist

• Assess and ensure IICA compliance for current and prospective investments;

• Coordinate with licensed banks and the SBV to support account restructuring and transitions;

• Advise on repatriation strategies and regulatory reporting obligations;

• Provide templates and practical guidance on required documents and procedures.

Circular 03/2025/TT-NHNN marks a pivotal development in Vietnam’s indirect investment framework, balancing regulatory control with investor facilitation. Stakeholders are encouraged to proactively review their current account structures to ensure compliance and avoid potential disruptions. For personalized legal assistance or a compliance audit of your investment vehicle, please contact our legal team at Van Pham LLC.