Vietnam–EFTA FTA: How Should Cross-Border Investors View the Deal

The Vietnam-EFTA investment framework offers national treatment in specified non-services sectors but excludes investment protection. Businesses from Iceland, Liechtenstein, Norway, and Switzerland should assess sector coverage, licensing requirements, and capital transfer rules ahead of the agreement’s targeted entry into force in early 2027.

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Vietnam and the four member states of the European Free Trade Association (EFTA) – Iceland, Liechtenstein, Norway, and Switzerland – signed a free trade agreement in Hanoi on 18 October 2026. Most attention has focused on tariffs, but for investors the longer-term change sits in the agreement’s investment and services chapters.

Those chapters set the terms on which EFTA companies can buy, build, or expand operations in Vietnam, and on which Vietnamese companies can do the same in EFTA markets. However, they leave one major question to separate treaties: how an investment is protected once it is made.

This article explains what the investment chapter covers, where its limits lie, and what foreign investors should review before the Vietnam-EFTA trade agreement takes effect. For agreed upon Vietnam-EFTA tariff schedules and rules of origin, see our earlier overview.

How significant is EFTA investment in Vietnam?

The Vietnam-EFTA FTA’s investment chapter builds on an established base, led by Swiss capital. Registered investment from the EFTA states with reported figures is summarised below.

EFTA Investment in Vietnam: Registered Projects and Capital
EFTA state	Projects	Registered capital	As of
Switzerland	244 active projects	About US$2.5 billion	End-September 2026
Norway	62 projects	More than US$201 million	End-2025
Liechtenstein	1 project	US$4 million	End-July 2026

Around 89 percent of Swiss investment is in manufacturing and processing, the type of activity the investment chapter covers. Switzerland ranks 20th among the countries and territories investing in Vietnam.

What does the investment chapter of the Vietnam–EFTA FTA cover?

Chapter 5 of the Vietnam–EFTA FTA covers investment through commercial presence in specified non-services sectors, including agriculture, fishing, mining and quarrying, and manufacturing. Its main commitment is national treatment: investors from the other parties must receive treatment no less favourable than domestic investors, subject to the sectors and reservations in each party’s schedule. Services are covered separately under Chapter 4.

Does national treatment apply to every investment?

No. According to the EFTA Secretariat’s summary, coverage depends on three conditions:

• A positive list sets the sectors: The listed sectors include agriculture, fishing, mining and quarrying, and manufacturing.
• Reservations narrow it further: Within those sectors, the parties kept exceptions, for example on land acquisition and investment screening.
• Acquisitions and branches are covered: National treatment applies to buying an existing company and setting up a branch, not only to new projects.

An activity that is not listed receives no guarantee under the chapter. Investors should therefore check their specific activity against Vietnam’s schedule, not just its broad sector.

The chapter also contains rules that matter once the business is running:

• Payments and transfers: No party may restrict current payments and capital movements relating to commercial presence. Transfers may be made in any freely convertible currency at the market rate, subject to balance-of-payments and prudential exceptions.
• Key personnel: Subject to its laws, each party grants temporary entry and stay to key personnel employed by the other parties’ investors, and to their spouses and minor children.
• Room to improve: A party may amend its schedule at any time, on its own initiative or at another party’s request, to offer more favourable treatment. The chapter is also reviewed periodically.

Each party keeps its right to regulate for legitimate aims such as public health, safety, the environment, and climate change. A separate exception allows measures to protect critical public infrastructure.

For manufacturers deciding where to place new capacity, the investment rules work alongside the agreement’s origin rules. These allow extended accumulation for non-agricultural inputs from the EU, or from ASEAN members with which a preferential agreement is in force. A Vietnam plant using such inputs may find it easier to qualify for preferential access to EFTA markets.

How does the Vietnam-EFTA FTA treat investment in services?

Service businesses fall under the trade in services chapter, not the investment chapter. The two work as a pair: one covers commercial presence outside services, the other covers commercial presence by service suppliers.

The services chapter builds on World Trade Organisation (WTO) practice, with annexes on financial services, telecommunications, maritime transport, and the movement of natural persons. Its main points for investors are:

• Better than WTO terms in some sectors: Improved market access was agreed for financial, transport and business services, and for supplying services through the presence of natural persons.
• Parity with competitors: The parties will provide market access equivalent to or better than that offered to competitors in their markets.
• Wider eligibility: The benefits extend to permanent residents of the EFTA states.

The detail sits in each party’s schedule of commitments. A service company should confirm the ownership limits and licensing conditions Vietnam has scheduled for its sector before relying on the agreement.

Does the Vietnam–EFTA FTA provide investment protection?

No. The Vietnam–EFTA FTA’s investment chapter expressly excludes investment protection and does not allow investors to bring claims directly against a government. It leaves other investment and taxation agreements between the parties unaffected.

The investment chapter also prevents investors from using dispute mechanisms in existing investment protection agreements to pursue alleged breaches of this chapter.

FTA disputes can be brought only by governments, through consultations and, if unresolved, a three-member arbitration panel. Companies cannot initiate these proceedings themselves.

Investors seeking treaty protection against measures such as expropriation must therefore assess any applicable bilateral investment treaty (BIT). Coverage and access to investor–state arbitration depend on the relevant treaty and its conditions; they should not be assumed to be identical across the four EFTA states.

Vietnam–EFTA FTA: Treaty Coverage by EFTA State
Investor’s home state	BIT with Vietnam	Double taxation agreement	What the FTA adds
Switzerland	In force since 3 December 1992; replacement under negotiation	In force since 12 October 1997	Market access on equal terms; BIT protection continues
Iceland	In force since 10 July 2003	In force since 27 December 2002	Market access on equal terms; BIT protection continues
Norway	None	In force since 14 April 1996	Market access on equal terms only
Liechtenstein	None	Signed 18 October 2026; not yet in force	Market access on equal terms only

Norwegian and Liechtenstein investors face a clear gap. The FTA gives them a new legal basis for entering Vietnam, but no treaty-based protection once they are established.

For Swiss investors, the picture may change. Vietnam and Switzerland are negotiating a new investment protection agreement to replace the 1992 treaty. The Ministry of Finance reported progress on its scope, protection standards and investor-state dispute settlement, with direct talks scheduled for 30 October 2026.

Investors should not assume that routing an investment through another jurisdiction secures treaty benefits. Under the FTA, a company qualifies as a juridical person of a party only if it has substantive business operations there. Tax treaty rates are likewise tied to beneficial ownership, and each BIT has its own definition of a protected investor.

What still depends on Vietnamese law?

The FTA sets the standard of treatment, but the procedures remain domestic. EFTA investors will follow the same steps as other foreign investors, under rules that changed substantially in 2026.

Investment licensing

The Law on Investment No. 143/2025/QH15 took effect on 1 March 2026. It lets foreign investors set up a company before obtaining or amending the Investment Registration Certificate, provided they meet market access conditions.

Decree No. 96/2026/ND-CP of 31 March 2026 guides the law and lists the sectors with restricted market access for foreign investors. The FTA does not remove the need for either certificate or for sector licences.

Capital contributions and profit remittances

The FTA’s transfer rule works through Vietnam’s foreign exchange framework. Under Circular No. 38/2026/TT-NHNN, in force since 18 August 2026, capital contributions and transfers abroad of capital and profits generally pass through a foreign investment capital account.

The account is required for companies set up by foreign investors, and for those in which foreign investors hold more than 50 percent after a contribution or acquisition. Holdings of 50 percent or less use the indirect investment account route, which matters for minority acquisitions.

Key personnel

The FTA’s commitment on key personnel applies subject to domestic law, so work permit rules still govern. From 5 December 2026, Decree No. 393/2026/ND-CP limits the intra-corporate transferee category to managers, executive directors and experts with at least 12 months’ prior service in the overseas company.

The work permit exemption for qualifying transferees continues in the 11 service sectors covered by Vietnam’s WTO commitments. Technical workers are no longer included in this category.

Tax treaty benefits

Since 1 July 2026, Circular No. 95/2026/TT-BTC has governed how Vietnam applies its tax treaties, replacing Circular No. 205/2013/TT-BTC. Treaty relief runs from the date a complete application dossier is filed, within a three-year limitation period.

Reduced withholding rates on passive income are capped for beneficial owners resident in the treaty partner. Vietnam had signed 82 tax treaties by October 2026, of which 78 were in force.

What should businesses do before entry into force?

The Vietnam-EFTA FTA is signed but not yet in force. Vietnam’s Ministry of Industry and Trade (MOIT) will submit it for government approval and has urged the EFTA states to ratify promptly, so that it can take effect from early 2027.

Businesses should treat that date as a planning assumption rather than a commitment. Swiss trade agreements require parliamentary approval and can be put to a referendum if 50,000 signatures are collected.

Companies do not need to wait to begin preparing. The checklist below sets out the main steps.

Action	What to check
1. Check your activity against Vietnam’s schedule	Confirm whether the planned activity falls in a listed non-services sector, a scheduled service, or neither. Note any reservation on land, screening or ownership that applies.
2. Confirm which treaty protects the investment	Identify the investing entity and whether a BIT covers it. Swiss and Icelandic investors should review their treaty’s definitions; Norwegian and Liechtenstein investors should plan for the absence of one.
3. Align the licensing timeline	Map the Enterprise Registration Certificate, Investment Registration Certificate and any sector licences against the project schedule. Allow for market access checks at incorporation.
4. Plan capital and cash flows	Confirm which account route applies to contributions, acquisition payments and remittances. Prepare the treaty application dossier and beneficial ownership evidence for any reduced withholding rate.
5. Plan staff transfers early	Check whether managers and experts qualify as intra-corporate transferees under Decree 393. Reassess any role previously classed as a technical worker.
6. Monitor ratification and the final schedules	Track approval in Vietnam and in your home state, and the published schedules for your sector. Swiss investors should also follow the replacement BIT negotiations.

For EFTA investors, the agreement improves the terms of entry rather than the terms of protection. The practical priority is to confirm where an activity sits in Vietnam’s schedule, which treaty covers the investing entity, and how licensing, capital flows, and staffing will work under Vietnamese law.

Also Read: EFTA–Vietnam FTA Concluded: Business Implications for Trade, Investment, and Market Access