The State of the Socialist Republic of Vietnam encourages foreign investors to invest in Vietnam on the basis of respect for the independence and sovereignty of Vietnam, observance of the laws of Vietnam, equality, and mutual benefit.
The State of the Socialist Republic of Vietnam protects the owner ships, of invested capital and other legitimate rights of the foreign investors, and extend to the latter favourable conditions and quick formalities to invest in Vietnam.

Article 2:

For the purpose of this law, the following terms shall have the respective meanings ascribed to them hereunder:

1. "Foreign direct investment in Vietnam" refers to the acts of the foreign investors in bringing into Vietnam their capital in terms of money or any types of assets in order to carry out investment activities as stipulated by this law.
    
2. "Foreign investors" refers to foreign organizations or individuals investing in Vietnam.
    
3. "Foreign partner" refers to the party consisting of one or more foreign investors.
    
4. "Vietnamese partner" refers to the party consisting of one or more Vietnamese economic organizations of all economic sectors.
    
5. "The two partners" refers to the Vietnamese partner and the foreign partner;

"Several partners" refers to the Vietnamese partner and the foreign partner, or the foreign partners and Vietnamese partners. or Vietnamese partners and foreign partners.

1. "Foreign-invested enterprise" refers to the joint venture enterprise or the 100% foreign capital enterprise.
    
2. "The joint venture enterprise" refers to the enterprise jointly established in Vietnam by the two partners or several partners involved on the basis of a joint venture contract or an agreement signed between the Government of the  Socialist Republic of Vietnam and a foreign government, or to the new enterprise established in Vietnam as a result of cooperation between a foreign-invested enterprise and Vietnamese partner or between any such joint venture and a  foreign partner on the basis of the joint venture contract.
    
3. "The 100% foreign capital enterprise" refers to an enterprise in Vietnam whose capital is wholly owned by the foreign investor.
    
4. "Business cooperation contract" refers to a document signed between two or several  partners to  carry out investment activities in Vietnam without establishing a status of juridical person.
    
5. "Join venture contract" refers to a document signed between partners mentioned at Point of this Article to set up a joint venture enterprise in Vietnam.
    
6. "Build-Operate-Transfer (BOT) contract" refers to a document signed between a Vietnamese competent agency and a foreign investor to build and operate an infrastructure project for a certain period; upon the expiry, the foreign investor shall transfer the project to the State of Vietnam without compensation.
    
7. "Build-Transfer-Operate (BTO) contract" refers to a document signed between a Vietnamese competent agency and a foreign investor to  build an infrastructure project, upon the completion of that project, the foreign investor transfers it to the Sate of Vietnam, and the Vietnamese Government reserves the right of operating that project for the foreign investor for a certain period to refund the investment and to earn profit on a reasonable basis.
    
8. "Build-Transfer (BT) contract" refers to a document signed between a vietnamese authorized agency and a foreign investor to build an infrastructure project; upon completion, the foreign investor transfers the project to the State of Vietnam, and the Vietnamese Government offers favourable conditions to the foreign investor to carry out another project to refund the investment and to earn profit another project to refund the investment and to earn profit on a reasonable basis.
    
9. "Export processing zone" refers to  an industrial zone specializing in manufacturing exports, carrying out services for the manufacture of exports and for export activities, with defined geographical lines, established by the Government, or under the permission of the Government.
    
10. "Export processing enterprise" refers to an enterprise specializing in manufacturing exports, carrying out  services for the manufacture of exports,  and for export activities, established and operating in accordance with regulations of the Government on export processing enterprises.
     
11. "Industrial  zone" refers to a zone reserved for the manufacture of industrial commodities and for carrying out services for industrial production, established by the Government or under the permission of the Government.
     
12. "Industrial  zone enterprise" refers to an enterprise  established and operating within the industrial zone.
     
13. "Investment capital" refers to the capital required for implementing an investment project, and comprises of legal capital and loan capital.
     
14. "Legal capital" of a foreign-invested  enterprise refers to  the capital required for establishing the enterprise, and the capital is prescribed in the charter of the enterprise.
     
15. "Capital contribution" refers to the capital paid in by each partner to  constitute the legal capital of the enterprise.

"Re-investment" refers to the use of profit and other legitimate sources of income generated from foreign investment activities in Vietnam to add capital to the on-go-ing project in Vietnam or to another new investment project in accordance with forms of investment stipulated in this law.

Article 3:

Foreign investors are allowed to invest in vietnam in various areas of the national economy.
The State of Vietnam encourages foreign investors to invest in economic sectors and localities as follows:

1. Sectors:
   1. Production of exports;
   2. Cultivating, growing, and processing agricultural, forestry, and aquatic products;
   3. High technology, advanced know-how industries, with a view to protecting the ecological environment, investment in research and development;
   4. Labor-intensive industries; processing materials and using efficiently natural resources available in Vietnam;
   5. Construction of infrastructure and other important industrial production facilities;
2. Localities:
   1. Mountainous and remote regions;
   2. Areas of underdeveloped socio-economic level
   3. The State of Vietnam shall not grant foreign investment licenses in sectors and areas therein foreign investment may hamper the national security and defense, cultural and historical heritage, custom, and ecological environment.

In accordance with planning and development orientation in each period, the Government shall  specify localities where foreign investment is encouraged, issue lists of priority and prime priority investment projects, lists of conditional investment sectors, and lists of prohibited investment sectors.

Vietnamese private economic organizations are allowed to engage in investment cooperation with foreign investors in sectors and under conditions  regulated by the Government.