An indirect investment capital account in Vietnam (IICA) is a Vietnamese dong payment account that a non-resident foreign investor opens at a licensed bank so that every inflow and outflow of its portfolio-style investment runs through one place: buying listed shares, bonds and fund certificates, buying minority stakes in unlisted companies that do not need a direct investment capital account (DICA), receiving dividends, and buying foreign currency to send money home (Articles 3(2), 4 and 6 of Circular 03/2025/TT-NHNN of the State Bank of Vietnam). Circular 03/2025 took effect on 16 June 2025 and replaced Circular 05/2014/TT-NHNN (Article 11(2)). It renamed the account "indirect investment account", dropping the word "capital", but banks and investors still say IICA; this post uses both names.
The short version: a foreign investor uses its own IICA when it buys into a company that was not set up by a foreign investor and in which foreign investors hold 50% or less after the deal. Once foreign ownership goes above 50%, the company itself must open an investment capital account (the DICA) under Circular 38/2026/TT-NHNN (Article 6(1)(b) and Article 7(6)). Each investor gets one IICA at one bank, with exceptions for some institutional investors holding several securities trading codes (Article 5 of Circular 03). Nothing in the rules closes an IICA automatically. The company side is covered in our post on the direct investment capital account in Vietnam; this post looks at it from the minority investor's side.
Which rules govern the indirect investment capital account in Vietnam?#
The Ordinance on Foreign Exchange defines foreign indirect investment as investing in Vietnam through securities, other valuable papers, capital contributions and share purchases, or through securities investment funds and other intermediaries, "without directly participating in the management of the investment" (Article 4(13)). A non-resident foreign investor must open a dong account for this, foreign currency must be converted into dong to invest, and lawful proceeds may be reinvested or used to buy foreign currency for remittance abroad (Article 12). The "no management participation" wording is not the test for choosing the account, but it may matter for profit remittance conditions (see the last section).
Three State Bank circulars have to be read together:
- Circular 05/2014/TT-NHNN expired on 16 June 2025. Much of what is online still cites it, together with Circular 06/2019/TT-NHNN and a 51% threshold.
- Circular 03/2025/TT-NHNN is the main text: who opens the account, how many, and which receipts and payments are allowed. Anything it does not cover follows the general rules on payment accounts (Article 3(3)), currently Circular 17/2024/TT-NHNN (amended by Circular 25/2025/TT-NHNN) and Decree 52/2024/ND-CP.
- Circular 38/2026/TT-NHNN, in force from 18 August 2026, replaced Circular 06/2019 on the DICA and repealed Article 11(3) and (4) of Circular 03 (Article 18(3)). Those two clauses dealt with the switch from a 51% to a "more than 50%" test and a 12-month window, already expired on 16 June 2026, for companies between 50% and 51% foreign ownership to open a DICA.
Circular 03 does not draw the line between the two accounts itself. Its Article 4(2) points to companies "not subject to opening a direct investment capital account" under Circular 06/2019 "and its amending or replacing documents". Article 18(5) of Circular 38 also renamed that account the "foreign investment capital account in Vietnam" in earlier circulars. From 18 August 2026 the test is therefore Article 6 of Circular 38: a 30% foreign shareholder with a board seat still uses an IICA if the company falls outside Article 6.
Who needs an indirect investment capital account in Vietnam, and who uses the company's DICA?#
Two conditions must both be met. The account holder must be a non-resident foreign investor, meaning an organisation established under foreign law or a foreign national who is a non-resident (Article 2(1) of Circular 03). And the transaction must fall within Article 4: trading securities and valuable papers; contributing capital to, or buying shares or capital contributions in, an unlisted company outside the DICA regime; dong investment mandates through fund management companies; and other securities transactions.
| Situation | Account | Basis |
|---|---|---|
| Non-resident buys listed shares, bonds or fund certificates | Investor's IICA | Circular 03, Article 4(1) and (4); Circular 38, Article 1(3) |
| Non-resident buys 30% of an unlisted joint stock company founded by Vietnamese shareholders; total foreign ownership stays at or below 50% | Investor's IICA | Circular 03, Article 4(2); Circular 38, Article 6(1)(b) |
| Same deal, but foreign ownership goes above 50% | The company must open a DICA | Circular 38, Article 7(6) |
| Foreign investor takes 30% as a founder of a new joint venture | The company's DICA, despite the low percentage | Circular 38, Article 6(1)(a) |
| A point (b) company drops to 50% foreign ownership or less; or any company within Article 6(1), including one founded by a foreign investor, lists or registers its shares for trading | DICA closed; remaining foreign investors move to IICAs | Circular 38, Article 7(5)(b) |
| Foreign national allowed to reside in Vietnam for 12 months or more | Ordinary dong payment account, not an IICA | Circular 03, Article 1(2); Ordinance, Article 4(2)(h) |
Three points are easy to miss:
- Residents cannot open an IICA. A foreigner permitted to reside in Vietnam for 12 months or more is a resident, except those studying, receiving medical treatment, travelling or working for diplomatic missions, international organisations or foreign representative offices (Article 4(2)(h) of the Ordinance). A foreign-invested company incorporated in Vietnam is also a resident (Article 4(2)(b)). Residents use ordinary dong payment accounts (Article 1(2) of Circular 03).
- A company founded by a foreign investor has no percentage test. It keeps its DICA for as long as any foreign investor remains (Article 7(5)(a)(i) of Circular 38), unless it becomes a public company with listed or trading-registered shares (Article 7(5)(b)(ii)). In our reading, a new foreign investor buying 5% of such a company pays into and receives from the company's DICA and does not open an IICA. Ask how the target was set up, not only what its current cap table looks like.
- The 50% threshold is aggregated. In our reading, Article 6(1)(b) adds up all foreign holdings: two funds with 30% each put the company into the DICA regime.
Currency, bank and number of accounts#
The IICA is a dong account only (Article 3(2) of Circular 03). Foreign currency wired in is sold to the bank and credited in dong (Article 6(1)(a)). There is no US dollar IICA; a DICA, by contrast, may be held in foreign currency and/or dong (Article 7(1) of Circular 38).
Each investor may open one IICA at one licensed bank (Article 5(1)). Additional accounts, one per securities trading code and still at the same bank, are allowed for foreign securities companies (two: proprietary and brokerage), foreign funds and organisations managed by several fund managers (one per managed portfolio), and foreign government investment bodies and investment arms of international financial institutions of which Vietnam is a member (one per custody portfolio) (Article 5(2) and (3)).
Banks set their own account-opening documents (Article 7(2)). For accounts used to invest on the stock market, foreign documents must be notarised or certified within 12 months before the bank receives them, and translation is a matter for agreement with the bank (Article 5(4)). Since 31 August 2025, Article 15a of Circular 17/2024 (added by Article 6 of Circular 25/2025/TT-NHNN) lets a non-resident indirect investor authorise an organisation holding a custody agreement with it to open, close and operate the account, waives consular legalisation, and allows banks to use SWIFT. Joint accounts are not allowed (Article 3(6)), balances cannot be moved into term or savings deposits (Article 3(5)), and every payment order must state its purpose (Article 3(7)). To change banks, the investor opens a new IICA, moves the whole balance and closes the old one before using the new account for anything else (Article 5(5)).
What can go in and out of an indirect investment capital account in Vietnam?#
Article 6 of Circular 03 lists the permitted flows of an indirect investment account.
| Receipts (Article 6(1)) | Payments (Article 6(2)) |
|---|---|
| Proceeds of selling foreign currency to the bank | Capital contributions and purchases of shares, capital contributions, securities and valuable papers |
| Sale proceeds of shares, capital contributions and securities; dividends, bond coupons, interest; profit distributions | Buying foreign currency to remit capital, profit and other lawful income abroad |
| Transfers from the investor's other dong payment accounts | Transfers to the investor's other dong payment accounts |
| Transfers from fund managers and other mandated investment managers | Transfers to fund managers and other mandated investment managers |
| Gains under non-prefunded share trades by institutional investors | Losses and costs of those trades |
| Deposits and escrow amounts received or refunded | Fees, charges, taxes, administrative fines and related costs |
| Balance moved from the old IICA when changing banks | Deposits and escrow; moving refunded deposits to the investor's other dong account or remitting them abroad; transfer to the new IICA |
Circular 05/2014 ended both lists with "other lawful receipts" and "other lawful payments". Circular 03 does not, so in our reading anything not listed can be refused. The IICA cannot receive or make loans; a shareholder loan to the target is a foreign loan of the company and follows its own route (see foreign loan registration in Vietnam). A deposit under a share purchase agreement can be paid from the IICA and, if the deal fails, refunded to it, then moved to the investor's other dong account or remitted abroad (Article 6(1)(e) and (2)(g)), so the SPA should name the IICA as the refund account.
Buying 30% of an unlisted company: the steps and the money#
Illustrative scenario: Fund X, a non-resident Singapore fund, buys 30% of Y JSC from Mr A, a resident individual. Y was founded by Vietnamese shareholders, is not a public company, makes packaging, holds no land in border or coastal areas, and has no foreign shareholders before the deal.
- Conditions. X must meet market access, national defence and security and land conditions (Article 21(2) of the Law on Investment 143/2025/QH15; Article 75(4) of Decree 96/2026/ND-CP). See market access conditions in Vietnam.
- Prior registration? Only required in the three cases in Article 21(3): conditional sectors for foreign investors, foreign ownership going or already above 50%, and land in sensitive areas. Y is in none, so it simply records the new shareholder under enterprise law; X may still register if it wishes (Article 76(2) of Decree 96), with Y filing the application (Article 76(3)). The 10-working-day deadline in Article 76(4) is written only for the mandatory cases in Article 21(3)(a) and (b); no deadline is stated for voluntary registration. The full sequence is in foreign investor buying shares in Vietnam.
- Open the IICA and fund it. X wires US dollars, sells them to the bank and holds dong.
- Pay. X pays Mr A in dong from the IICA (Article 6(2)(a) of Circular 03). The Law on Enterprises also requires a foreign investor's payments for share purchases, dividends and profit remittances to go through accounts under foreign exchange law, unless paid in kind or by other non-cash means (Article 35(5) of the Law on Enterprises). With a resident seller, price the SPA in dong: pricing or adjusting the contract price in foreign currency contrary to the rules risks a fine of VND 30 to 50 million (Article 27(4)(n) of Decree 340/2025/ND-CP). X hedges its own US dollar exposure between signing and payment. Drafting points are in share purchase agreements in Vietnam.
- Record the shareholder. Y updates its shareholder register and makes the filing described in share transfers in a joint stock company. Y does not open a DICA, and its dividends to X are paid into X's IICA (Article 6(1)(b) of Circular 03).
Foreign seller, foreign buyer. For a company with a DICA, a share sale between two non-residents does not go through the DICA and may be priced in foreign currency (Article 10(1)(a) and Article 13(1) of Circular 38). Circular 03 has no such carve-out: every receipt and payment linked to indirect investment must go through the IICA (Article 3(2)). In our reading, if X later sells its stake in Y to another foreign fund, the buyer pays dong into X's IICA; settling offshore in US dollars, common in M&A practice, has no support in Circular 03. Agree the mechanics with both banks first.
Moving from an IICA to the company's DICA, and back#
When foreign ownership rises above 50%, the company must open a DICA, and the foreign investor closes its IICA if it no longer needs one for other indirect investment (Article 7(6) of Circular 38). A fund that also holds listed shares keeps it. The crossing deal must also be registered before the shareholder change (Article 21(3)(b) of the Law on Investment).
Circular 38 leaves three questions open:
- Which account carries the crossing deal itself? Before closing, the company is not yet within Article 6(1). Article 4(5) of Circular 38 allows money to be paid into the investment capital account before the company registers the change in ownership, so the cautious approach is for the company to open the DICA and agree the flow with its bank before payment, priced in dong if the seller is a resident (Article 13(3)).
- What happens to the IICA balance? The dong DICA receipts list does not mention IICA balances; it covers capital contributions (Article 9(1)(a) of Circular 38), balances moved when changing investment accounts or banks (point (g)) and "other lawful receipts" (point (l)). The real limit is on the IICA side, whose payments list is closed. The balance can be reinvested indirectly, remitted abroad, moved to the investor's other dong account, or paid as a capital contribution into the company's DICA (Article 6(2)(a) to (c) of Circular 03); the last route fits the wording of both circulars but we have not seen guidance, so ask the bank.
- Shares bought earlier through the IICA. Once the company has a DICA, dividends sent abroad, sale proceeds from resident buyers and capital repatriation go through the DICA (Articles 10(1), 11 and 12(1) of Circular 38). The DICA bank must check documents against the actual transactions (Article 14(3)), so keep the IICA statements that show the original purchase price.
The reverse also happens. A point (b) company must close its DICA when foreign ownership falls to 50% or less, and any company within Article 6(1), including one founded by a foreign investor, must close it when it becomes a public company with listed or trading-registered shares, unless the account is still servicing foreign loans or other lawful payments; the remaining foreign investors then use IICAs (Article 7(5)(b) of Circular 38).
When is an indirect investment capital account in Vietnam closed, and can it close automatically?#
Neither Circular 03 nor Circular 38 lets a bank close an IICA automatically, and Circular 05/2014 did not either. Closure follows the payment account rules (Article 3(3) of Circular 03): Article 18 of Circular 17/2024 refers to Article 12 of Decree 52/2024 and the account agreement. Article 12 allows closure when the holder asks and has settled its obligations, when an individual holder dies, when an organisation holder ceases to exist, when the holder commits prohibited acts, in cases agreed in writing in advance, and in other cases provided by law.
In practice, an "automatic" closure only happens if the bank's terms say so, for example a zero-balance account with no activity for a set period. Investors holding an IICA between deals should read that clause. The State Bank has consulted on amending Decree 52 to allow closure after three years without transactions unless otherwise agreed; as of 21 October 2026 we have not seen the amendment issued. The general rule that suspends payments once a customer's identity documents expire (Article 19(3) of Circular 17) does not apply to accounts of non-resident indirect investors (Article 15a(2)(c), added by Circular 25/2025); banks can still refuse orders that do not match the account file or where the customer withholds know-your-customer information (Article 21(1)(b) of Circular 17).
The investor itself must close the IICA when changing banks (Article 5(5) of Circular 03) and when moving to the DICA with no remaining indirect investments (Article 7(6) of Circular 38). In our reading, the closing balance can only leave through the routes in Article 6(2) of Circular 03.
Repatriating dividends and sale proceeds, and the tax on them#
Foreign investors may transfer their capital, liquidation proceeds and income abroad after meeting their financial obligations (Article 11 of the Law on Investment). For indirect investment, that means buying foreign currency from the IICA (Article 12(2) of the Ordinance; Article 6(2)(b) of Circular 03), with the board resolution on dividends, the sale agreement and tax receipts ready for the bank.
For a foreign corporate investor, dividends from a Vietnamese company that has paid corporate income tax are exempt (Article 4(7) of Law 67/2025/QH15). Selling securities is taxed at 0.1% of taxable revenue and selling capital in a non-public company at 2% (Article 12(3)(g) and (i) of Decree 320/2025/ND-CP); the boundary between the two and the buyer's withholding duty are covered in corporate income tax on capital transfer in Vietnam. Non-resident individuals pay 5% on dividends (Article 22 of Law 109/2025/QH15), 0.1% of the price on shares and other securities, and 20% of the gain on capital in a limited liability company, or 2% of the price where the purchase cost cannot be established (Article 23(1) and (2)); see also profit repatriation from Vietnam.
The conditions in Article 27(6) of Decree 252/2026/ND-CP (audited accounts and CIT finalisation filed, no tax debt, no accumulated losses) are written for profit "from direct investment activities in Vietnam". Neither the decree nor the Law on Investment defines that phrase. In our reading, a portfolio investor that does not take part in management falls outside it (Article 4(13) of the Ordinance), while an investor with a board seat may be treated as a direct investor. The cautious course is to remit dividends only once the company has filed audited accounts and its CIT finalisation and has no accumulated losses, and to check with the bank first.
Opening, closing or using accounts for foreign investment in Vietnam contrary to the rules, and making transfers for foreign investment contrary to the rules, carry fines of VND 30 to 50 million for individuals and double that for organisations (Article 27(4)(d) and (g) and Article 5(3)(a) of Decree 340/2025/ND-CP). In our reading, "foreign investment in Vietnam" here includes indirect investment.
LexData's capital contribution and share purchase service includes checking which account regime a target falls under before signing, drafting payment and deposit-refund clauses that match the IICA or DICA, registering the purchase where required and updating the shareholder records afterwards.
