Profit Repatriation in Vietnam: A Brief Guide in 2025

Vietnam has established clear regulations regarding profit repatriation for foreign investors, aiming to create a transparent and orderly process for foreign investors. This article explores the necessary procedures for transferring profits derived from direct investments in Vietnam and the required documentation for notification of profit remittance.

Vietnam’s determination of profit repatriation

Circular 186/2010/TT-BTC (“Circular 186”) governs foreign investors’ transfer of profits abroad from Vietnam. Profits eligible for repatriation must be legally derived from direct investment activities in Vietnam, as outlined in the Investment Law, and all financial obligations to the State of Vietnam must be fulfilled before repatriation.

Profits transferred abroad can be in cash or in kind and must comply with the following rules:

• Cash profits must adhere to the provisions of foreign exchange management laws;
• Transfers in kind must have their value converted according to import and export laws and other relevant regulations.

Timeline for profit repatriation

Annual transfer of profits abroad

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Foreign investors can transfer profits earned or distributed from direct investment activities in Vietnam to their home country at the end of the fiscal year. This transfer is permitted once the enterprise in which the foreign investor has invested has met the following conditions:

• Fulfilled its financial obligations to the Vietnamese government as mandated by law; and
• Submitted its audited financial statements and corporate income tax finalization declarations for the fiscal year to the direct tax authority.

Transfer profits abroad at the end of direct investment activities in Vietnam

Foreign investors may transfer profits abroad after completing their direct investment activities in Vietnam if the enterprise in which they have invested has met the following conditions:

• Fulfilled its financial obligations to the Vietnamese government in accordance with the law;
• Submitted audited financial statements and corporate income tax declarations to the direct tax authority; and
• Fully complied with other requirements of the 2019 Tax Administration Law.

Condition for profit repatriation

Article 69 of the Enterprises Law 2020 mandates a company’s profit shall only be distributed to its members if:

• The company’s tax liabilities and other financial obligations have been fulfilled as prescribed by law; and
• The company is able to fully pay its due debts and other liabilities after profit is distributed.

Moreover, Circular 186 prohibits foreign investors from repatriating profits gained from direct investments in Vietnam if the enterprise in which they invest has accumulated losses, even if the company reports profits in the current financial year and the losses have been carried forward according to corporate income tax regulations.

Determination of the value of profits remitted abroad

The profit to repatriate abroad is determined by the following formula:

Remitted profit = Annual abroad remitted profits – (Reinvested profit + Profit allocated for expenditures) + Other profit items

Where:

• Annual abroad remitted profits: This refers to the profits earned by foreign investors in a fiscal year based on audited financial statements and tax declarations. The annual profits are determined according to the audit report and the finalization of the corporation’s income tax each year.
• Reinvested Profit: This refers to the profits that foreign investors have utilized or committed to reinvesting in Vietnam.
• Profit allocated for expenditures: This refers to the profits that foreign investors have used for various business-related expenses or personal needs in Vietnam.
• Other profit items: These items could include unremitted profits from previous years.

Notification of profits remittance abroad

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In accordance with Article 5 of Circular 186, foreign investors are required to either directly submit notifications or authorize the companies they have invested in to facilitate the submission of notifications regarding the remittance of profits abroad. These notifications must adhere to the specific forms outlined in the Circular and should be directed to the relevant tax offices overseeing the enterprises in which foreign investors. It is essential that these notifications be lodged at least seven working days prior to the scheduled remittance of profits to ensure compliance with the regulatory framework.

Steps for profit repatriation and timeline

Step 1: Submitting required documents to competent tax authorities

Step 2: Remitting abroad profits

After seven business days, companies shall visit the local bank to remit profits abroad. It is important for businesses to verify with the local bank any additional required documents for remitting profits abroad.

Conclusion

Vietnam has established a structured framework for the repatriation of profits for foreign investors, ensuring compliance with regulations and financial obligations. The process requires foreign investors to fulfill tax liabilities, submit necessary documentation, and adhere to specific timelines to facilitate the transfer of profits. By following these guidelines, investors can efficiently repatriate their earnings while contributing to a transparent investment environment in Vietnam.

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