Circular 38 Removes the ERC–DICA Bottleneck: Foreign-Invested Enterprises May Open an Investment Capital Account Before Obtaining an IRC

18 August 2026 marks a significant development in Vietnam’s foreign-exchange framework for inbound investment. Circular No. 38/2026/TT-NHNN of the State Bank of Vietnam (Circular 38) has taken effect and replaced Circular No. 06/2019/TT-NHNN (Circular 06) in its entirety. Among its various reforms, the provision attracting particular attention from businesses and legal practitioners is the express permission for certain foreign-invested economic organizations to open an investment capital account before an Investment Registration Certificate has been issued or amended.

The new rule is expected to resolve a longstanding practical inconsistency: an enterprise could already have obtained its Enterprise Registration Certificate and therefore exist as a duly incorporated legal entity, yet remain unable to open the appropriate investment capital account through which its foreign investor was required to contribute charter capital.

In practice, responsibility for resolving this issue was frequently passed among the investment registration authority, the business registration authority and the relevant bank. Circular 38 now provides a much clearer legal route for the affected enterprise and its investor.

ERC, IRC and DICA: Three Links That Do Not Always Arise in the Same Order

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An Enterprise Registration Certificate (ERC) records the incorporation and principal registered particulars of an enterprise. An Investment Registration Certificate (IRC) records the essential particulars of an investment project. A Direct Investment Capital Account (DICA) is the account historically used to process qualifying foreign direct investment receipts and payments. Circular 38 now uses the term “foreign investment capital account in Vietnam”, abbreviated in the Circular as an “investment capital account”.

The difficulty arises when the ERC has been issued before the IRC. At that point, the enterprise legally exists and the time limit for contributing its registered charter capital may already have commenced. Nevertheless, banks have often treated the IRC as a material component of the DICA opening file. The result is an evident contradiction: the enterprise is under an obligation to receive the foreign investor’s capital contribution, but it has no appropriate investment capital account through which that contribution may lawfully be received.

The Bottleneck Under the Previous Regulatory Framework

Under Circular 06, opening a DICA was generally linked to an IRC or equivalent document identifying the project, investment capital and contribution schedule. An enterprise incorporated before completing its investment registration procedure could therefore face a regulatory impasse: it had legal personality and registered charter capital, but its bank might decline to open a DICA because no IRC had been issued. Receiving the funds through an ordinary payment account could create foreign-exchange compliance risk and call into question whether the remittance qualified as a valid capital contribution. The enterprise could consequently miss its contribution deadline, delay the project and face potential administrative exposure.

What Does Article 7.3 of Circular 38 Change?

The principal solution appears in Article 7.3 of Circular 38. Where a foreign investor establishes an economic organization before carrying out the procedure for the issuance or amendment of an IRC, the foreign-invested economic organization may open one foreign-currency investment capital account and/or one Vietnamese-dong investment capital account before the IRC is issued or amended. The relevant accounts must be maintained with the same authorized bank.

Circular 38 therefore expressly accommodates an “ERC-first, IRC-later” structure. For a case falling within Article 7.3, an IRC is no longer an absolute prerequisite to opening the account. The enterprise gains a lawful channel through which to receive charter capital, while the bank gains a direct legal basis for processing the application. Banks must still satisfy customer due-diligence, beneficial ownership, anti-money laundering and account-opening requirements, but the absence of an IRC should no longer, by itself, justify rejecting an eligible application.

Article 6 supports this interpretation by including, among the entities required or entitled to open an investment capital account, an economic organization established by a foreign investor or by a member enterprise in accordance with investment law and other relevant legislation. The provision is not confined to an organization that has already obtained an IRC.

Opening an Account Before the IRC Does Not Permit Unrestricted Use

The new rule must not be understood as conferring full and unrestricted use of the investment capital account from the date on which it is opened. Before the IRC is issued or amended, the account is subject to a limited statutory purpose.

Under Article 7.3, the pre-IRC account may be used to receive charter capital and interest accruing on the account balance; pay lawful expenses relating to investment preparation activities in Vietnam; and refund capital to the investor or member enterprise if the IRC is not issued or amended.

Article 5.4 further provides that, where the foreign investor has already established an economic organization before applying for the issuance or amendment of an IRC and the organization has opened an account under Article 7.3, transfers for investment preparation activities must be processed through that investment capital account.

Circular 38 therefore establishes a two-stage mechanism rather than abolishing the role of the IRC.

During the pre-IRC stage, the account operates within a restricted scope sufficient to receive charter capital and fund lawful preparatory expenditure. Once the IRC has been issued or amended, the enterprise may continue to use the existing account for the full range of receipts and payments permitted under Articles 8 and 9 of Circular 38. Where necessary, it may also open an additional investment capital account in another foreign currency in accordance with the general principles prescribed by the Circular.

This structure enables an enterprise to receive essential funding while preserving foreign-exchange controls by linking the account’s broader functionality to completion of the investment procedure.

How Is the New Process Expected to Operate in Practice?

For an enterprise falling within Article 7.3, the process may generally be summarized as follows:

The foreign investor completes the incorporation of the enterprise and obtains the ERC.
The enterprise submits an application to open an investment capital account with an authorized bank.
Following the opening of the account, the investor remits its charter capital into that account, and the enterprise may use the funds for lawful investment preparation expenses within the limits of Article 7.3.
The enterprise proceeds with the application for issuance or amendment of the IRC.
Once the IRC has been issued or amended, the existing account may be used for the full range of transactions permitted under Articles 8 and 9.

If the application for issuance or amendment of the IRC is unsuccessful, the account may be used to refund the relevant capital to the investor. Circular 38 therefore provides a legally identifiable route both for the receipt and, where necessary, the return of funds, reducing the risk that investment money becomes trapped when the proposed project cannot proceed.

Each bank may adopt its own document checklist. An enterprise should expect to provide its ERC, charter, list of members or shareholders, identification documents for the investor and beneficial owner, evidence of the ownership ratio and contribution obligation, and documents relating to the proposed IRC application. Contracts, invoices and records substantiating preparatory expenses should be maintained in an auditable form.

Immediate Action Points for Enterprises and Banks

An enterprise that has obtained its ERC but has been unable to open a DICA because it does not yet hold an IRC should promptly determine whether it falls within the circumstance contemplated by Article 7.3. If it does, the enterprise may re-engage with its bank by expressly relying on Article 7.3 and clearly explaining the intended limited use of the account during the pre-IRC period.

The enterprise should also review its charter capital contribution deadline, any funds received before Circular 38 took effect and the account through which those funds were received. Article 19.1 of Circular 38 permits a foreign-invested economic organization that opened a payment account to receive charter capital contributions before 18 August 2026 to transfer those contributions into an investment capital account opened under the new Circular. This transitional measure presents an opportunity to regularize historic cash flows, although the enterprise should reconcile the relevant records and coordinate with its bank to ensure that the supporting documentation is complete.

Authorized banks should update their internal procedures and document checklists without delay. If a bank continues to require an IRC in every case, irrespective of Article 7.3, the intended relief will not be achieved in practice. Conversely, an ERC alone should not automatically result in account approval. The bank remains responsible for verifying the source of funds, the identity of the contributing investor, the ownership ratio, the contribution obligation and the purpose of each relevant transaction.

Has Circular 38 Finally Ended the ERC–DICA Impasse?

At the level of substantive regulation, Circular 38 resolves the most significant aspect of the problem. A foreign-invested economic organization established before the issuance or amendment of its IRC is expressly permitted to open an investment capital account before that investment procedure has been completed.

Consistent implementation by authorized banks will nevertheless be essential. During the initial implementation period, differences may remain among banks as to documentary requirements, the identification of eligible entities and the transactions permitted before the IRC is obtained. An affected enterprise should therefore refer specifically to Article 7.3, Article 5.4 and Article 6 of Circular 38, rather than making only a general request to open a DICA “under the new rules”.

The reform does not dispense with the IRC, nor does it represent a relaxation of foreign-exchange supervision. Its legal effect is more precise: for a defined category of foreign-invested economic organization, it separates the time at which an investment capital account may be opened from the time at which the IRC is issued or amended, while restricting the account’s functionality until the investment procedure has been completed.

The result is a clearer and more workable regime: capital has a lawful entry route from incorporation, contribution obligations can be performed on time, preparatory expenses can be paid transparently and banks have a clearer statutory basis for supervising transactions. The ERC-first mechanism is therefore one of the most practical reforms introduced by Circular 38.

Disclaimer: This article is intended for general information and discussion purposes only and does not constitute legal advice. Application of Circular 38 to a particular enterprise should be assessed by reference to its investment documents, ownership structure, proposed transactions and the procedures of the bank at which the relevant account is to be opened.