1. What is investment?

Investment is the use of capital such as money, material, labor, time,... to gain profits and economic benefits in the future, much greater than what was spent.

More broadly, investment is the sacrifice of current resources, implementing an operational plan to gain greater benefits in the future. Investment activities are of commercial or non-commercial.

Investing is not like gambling, relying only on luck. Investment activities require a lot of time, knowledge, experience and skills to bring the highest economic benefits.

2. Regulations that need to be followed when making investments

Investment activities have specific regulations clearly stated in the Law on Investment 2020.

3.1. Banned business lines

Law on Investment 2020 was adopted by the 14th National Assembly of Socialist Republic of Vietnam on this 17th of June 2020 during its 9th session.  Accordingly, the following activities are prohibited from investment:

- Business in narcotic substances specified in Appendix I hereof;

- Business in chemicals and minerals specified in Appendix II hereof;

- Business in specimens of wild flora and fauna specified in Appendix 1 of Convention on International Trade in Endangered Species of Wild Fauna and Flora; specimens of rare and/or endangered species of wild fauna and flora in Group I of Appendix III hereof;

- Prostitution business;

- Human trafficking; trade in human tissues, corpses, human organs and human fetuses;

- Business activities pertaining to asexual human reproduction;

- Trade in firecrackers.

- Provision of debt collection services.

3.2. Conditional business lines

Conditional business lines are the business lines in which the business investment must satisfy certain conditions for reasons of national defense and security, social order and security, social ethics, or public health.

A List of conditional business lines is provided in Appendix IV hereof, includes 227 occupations.

3.3 Forms of investment recognized by law

According to Article 21 of the Law on Investment 2020, there are 05 forms of investment recognized in Vietnam, including:

- Investment in establishment of a business organization.

- Investment in the form of capital contribution or purchase of shares or stakes.

- Execution of an investment project.

- Investment in the form of a business cooperation contract.

- New forms of investment and types of business organizations prescribed by the Government's regulations.

4. How to choose the appropriate investment channel

After understanding the concept and legal regulations on investment, the following are basic instructions for investors to start investing activities:

4.1. Determine investment goals

Determining goals will help investors build a clear roadmap with specific action steps, based on which appropriate calculations are made to achieve results.

4.2. Evaluate your financial situation

Evaluate finances and determine current capital sources for investment. Investment assets must be surplus assets, not planned to be used in the next 6 months. Manage your personal finances strictly from the beginning so that the investment process is not interrupted or you have to withdraw capital midway.

4.3. Determine the level of risk

Determining the risk level of an investment means assessing the investor's ability to withstand risk. Once the level of risk is accepted, the investor will then be ready to invest. Profit always comes with risk, high profit means high risk and there will be no form of investment without risk.