Foreign ownership limit (FOL)

Definition

A cap, set sector by sector, on the percentage of a Vietnamese company that foreign investors may collectively own — stricter in sectors like banking and telecoms, looser in general manufacturing and tech.

Why it matters for a secondary

Any foreign buyer in a Vietnamese secondary has to check the FOL for that company's sector before pricing a deal — it can cap how much of a stake sale like MoMo's a single foreign bidder is even allowed to take.

Vietnam coverage →

How it works in practice

Foreign ownership limits cap the percentage of a company — or of companies in a defined sector — that non-domestic investors may hold. They are set sector by sector, so banking, telecoms, logistics, media and defence commonly carry tighter caps than consumer or software businesses, and the cap applies at the level of the company's register rather than to any single transaction.

A concrete illustration

A foreign buyer agrees to acquire 8% of a company from an existing shareholder. If foreign holders already sit at 45% against a 49% sectoral cap, only part of the block can be transferred to that buyer — so the transaction has to be resized, split with a domestic co-investor, or restructured.

What people most often get wrong

The binding constraint is the company's aggregate foreign holding at completion, not your own stake, which means another investor's unrelated purchase can shrink the room available to you between signing and closing. Confirm current headroom late in the process, not only at the start.