Quick answer: Vietnamese companies investing in India must comply with FEMA/RBI reporting through FC-GPR (30 days of share allotment), FLA Return (15 July), and FC-TRS (60 days), plus obtaining Vietnam's outward investment registration certificate (issued by the Ministry of Finance since it absorbed the Ministry of Planning and Investment in 2025). Under the India-Vietnam DTAA (1994, amended 2017), dividends, interest, and royalties/FTS are all taxed at 10%. Until Vietnam's apostille accession takes effect in September 2026, documents need embassy attestation (2-4 weeks), making the full FEMA reporting cycle 5-8 weeks.
Key takeaways:
- FC-GPR due within 30 days of share allotment; FLA Return due by 15 July.
- India-Vietnam DTAA: dividends, interest, and royalties/FTS each taxed at 10%.
- Vietnamese embassy attestation takes 2-4 weeks until apostille accession in September 2026.
- Vietnam requires separate outward investment registration with its Ministry of Finance, adding 2-4 weeks.
- Full FEMA reporting cycle for Vietnamese companies takes 5-8 weeks.
FEMA Compliance for Vietnamese Companies in India
Vietnam and India share a growing economic partnership anchored by the Comprehensive Strategic Partnership, with bilateral trade reaching $18.28 billion in FY 2025-26. While Vietnamese Foreign Direct Investment (FDI) into India is still in its early growth phase, the corridor is expanding as Vietnamese companies look to diversify beyond traditional ASEAN markets. India has 473 valid FDI projects in Vietnam valued at over $1.1 billion, and reciprocal investment flows from Vietnam to India are growing alongside deeper economic integration.
Every Vietnamese-invested company operating in India must comply with the Foreign Exchange Management Act, 1999 (FEMA) and the regulatory framework maintained by the Reserve Bank of India (RBI). FEMA governs all cross-border capital movements involving your Indian subsidiary, from initial equity infusion through ongoing intercompany transactions to eventual repatriation or exit.
Vietnamese companies typically set up Indian operations as Private Limited Companies or Wholly Owned Subsidiaries (WOS). The India-Vietnam investment relationship benefits from the ASEAN-India Free Trade Agreement framework, the ASEAN-India Investment Agreement (AIIA, effective July 2015), and the five-year plan (2024-2028) to expand the Comprehensive Strategic Partnership beyond defence into economic and trade cooperation.
Key sectors for Vietnam-India investment include energy, mineral exploration, agro-processing, consumer goods, agro-chemicals, IT services, auto components, and manufacturing. Both nations are targeting $25 billion in bilateral trade by 2030, which will drive further cross-border investment flows and make FEMA compliance increasingly important for Vietnamese companies with Indian operations.
How the India-Vietnam DTAA Affects FEMA Compliance
The India-Vietnam Double Taxation Avoidance Agreement (DTAA), signed on 7 September 1994 and in force from 2 February 1995, with an amending protocol signed on 3 September 2016 (in force from 21 February 2017), directly impacts how cross-border payments are processed under FEMA. When your Indian subsidiary makes payments to the Vietnamese parent, FEMA requires that correct withholding tax rates are applied based on the DTAA before remittance can be processed through authorised dealer (AD) banks.
Key DTAA rates affecting Vietnam-India transactions include dividends at 10% of the gross amount, interest at 10% of the gross amount, and royalties and fees for technical services at 10% of the gross amount. These rates are lower than India's domestic withholding rates, making proper documentation essential to claim treaty benefits.
The amending protocol replaced the original Article 27 on Exchange of Information with updated provisions and inserted a new Article 27A on Assistance in the Collection of Taxes. This aligns the treaty with international standards on tax cooperation and information exchange, meaning the tax authorities of both countries now share information more actively.
Vietnamese Tax Residency Documentation
To claim DTAA benefits on FEMA remittances, the Vietnamese parent company must obtain a Tax Residency Certificate from the General Department of Taxation of Vietnam. This certificate, along with Form 10F and a beneficial ownership declaration, must be submitted to the Indian AD bank before outward remittance processing. Vietnamese TRCs are typically issued within 7-15 working days.
Document Requirements from Vietnam
Vietnam deposited its instrument of accession to the Hague Apostille Convention on 31 December 2025, with the convention entering into force for Vietnam on 11 September 2026. Until that date, Vietnamese documents must undergo the traditional consular legalisation process. Key documents required include:
- Enterprise Registration Certificate (Giay Chung Nhan Dang Ky Doanh Nghiep) issued by the provincial business registration authority (under the former Department of Planning and Investment, now merged into the provincial Department of Finance), legalised through the Vietnamese Ministry of Foreign Affairs and the Indian Embassy in Hanoi
- Company Charter (Dieu Le Cong Ty) of the Vietnamese entity, certified and legalised
- Board Resolution (Nghi Quyet Hoi Dong Quan Tri) authorising the investment in India, notarised and legalised
- Business Registration Certificate showing registered capital, legal representative, and business lines
- Proof of identity and address of directors and shareholders (passport copies, CCCD)
- Foreign Inward Remittance Certificate (FIRC) from the Indian AD bank confirming receipt of investment funds
- KYC documentation in RBI-prescribed format for all foreign investors
- Valuation Certificate from a SEBI-registered merchant banker or Chartered Accountant
- Company Secretary Certificate confirming compliance with FEMA pricing guidelines
The current embassy attestation process takes 2-4 weeks. After September 2026, when Vietnam's apostille accession takes effect, documents will be eligible for a single-step apostille through Vietnam's Ministry of Foreign Affairs (the designated competent authority, operating through the Consular Department in Hanoi and the Department for External Relations in Ho Chi Minh City), reducing processing to a few days and lowering costs significantly.
Step-by-Step FEMA Compliance Process
The FEMA compliance process for Vietnamese companies investing in India follows the standard RBI framework with specific considerations for the Vietnam-India investment corridor.
Stage 1: Pre-Investment Compliance
Before investing, confirm that your sector permits 100% FDI under the automatic route. Most sectors open to Vietnamese investment, including manufacturing, IT services, agro-processing, energy, and consumer goods, allow 100% FDI without prior government approval. Sectors such as multi-brand retail, defence above 74%, and print media require the government approval route.
Stage 2: Vietnamese Outward Investment Approval
Vietnamese companies investing overseas must comply with Vietnam's Law on Investment (2020), which requires an outward investment registration certificate before capital can be remitted abroad. Following Vietnam's 2025 government restructuring, in which the Ministry of Planning and Investment (MPI) was merged into the Ministry of Finance, this registration is handled by the Ministry of Finance. Where the capital to be transferred abroad is VND 20 billion (approximately $800,000) or more, the Ministry of Finance must also obtain the State Bank of Vietnam's written opinion, and very large projects require Prime Minister or National Assembly approval. Obtain this registration before initiating the FEMA process in India.
Stage 3: Capital Infusion and FC-GPR Filing
Once the Vietnamese parent remits capital (typically in VND or USD) to the Indian subsidiary's designated bank account and shares are allotted, file Form FC-GPR on the RBI's FIRMS portal within 30 days of share allotment. Required attachments include the FIRC, valuation certificate, board resolution, and CS certificate.
Stage 4: Ongoing Annual Compliance
File the Foreign Liabilities and Assets (FLA) Return by 15 July each year, reporting all outstanding foreign investment, borrowings, and other liabilities. This is mandatory even if there have been no changes during the year.
Stage 5: Transaction-Based Reporting
Report share transfers via Form FC-TRS within 60 days. External Commercial Borrowings from the Vietnamese parent require Form ECB-2 returns filed through the designated AD Category-I bank to the RBI, not on the FIRMS portal, which hosts equity forms only. Under the revised ECB framework effective 16 February 2026 the return is event-based rather than monthly: it is due within 7 calendar days from the end of the month in which a drawdown or debt-servicing payment occurs.
Timeline and Costs
For Vietnamese companies, the complete FEMA compliance cycle typically follows this timeline:
- Embassy attestation in Vietnam: 2-4 weeks (until September 2026; apostille thereafter)
- Vietnamese outward investment registration: 2-4 weeks (Ministry of Finance)
- Capital remittance via SWIFT: 3-7 business days (VND/USD to INR)
- FC-GPR filing deadline: Within 30 days of share allotment (non-extendable)
- FLA Return: Annually by 15 July
- FC-TRS filing (if applicable): Within 60 days of share transfer
- Annual ROC compliance: Ongoing throughout the year
Professional fees for FEMA compliance range from INR 25,000 to INR 75,000 per filing. Valuation certificates cost INR 15,000 to INR 50,000. Embassy attestation fees in Vietnam are approximately VND 100,000-300,000 per document.
Common Challenges for Vietnamese Companies
Vietnamese companies face several country-specific challenges when navigating FEMA compliance in India:
- Dual outward investment registration: Vietnamese companies must register their overseas investment with the Ministry of Finance (which absorbed the former Ministry of Planning and Investment in 2025) before remitting capital to India. This pre-registration requirement adds 2-4 weeks to the overall timeline and must be coordinated with FEMA filing deadlines. Start the Vietnamese approval process at least 6-8 weeks before your intended capital infusion date.
- Document authentication (transitioning): Until September 2026, Vietnamese documents require embassy attestation through the Vietnamese MFA and the Indian Embassy in Hanoi or Ho Chi Minh City. After that date, apostille processing will be available, reducing the timeline significantly. Plan your FEMA filings accordingly based on the transition timeline.
- Dong (VND) conversion challenges: The Vietnamese Dong is a managed currency with State Bank of Vietnam (SBV) controls on exchange rates. Large VND-to-INR conversions typically route through USD as an intermediate currency, which can affect the final INR value used for FEMA valuation. Coordinate with both your Vietnamese and Indian banks to optimise exchange rates.
- SBV foreign exchange regulations: The State Bank of Vietnam (SBV) regulates outward remittances for overseas investment. Investors must open a dedicated foreign currency account at a licensed Vietnamese bank for the overseas investment and route all capital through this account. SBV monitors compliance and may request periodic reports on the overseas investment.
- Limited bilateral familiarity: The Vietnam-India FDI corridor is relatively new compared to established routes like Singapore-India or Japan-India. AD banks in India may have less familiarity with Vietnamese corporate documents and entity structures. Provide clear explanations of the Vietnamese corporate framework, including the Enterprise Registration Certificate system, to facilitate smooth FEMA processing.
- No social security agreement: India and Vietnam do not have a Social Security Agreement. Vietnamese employees posted to India face dual social security obligations, affecting payroll structuring and FEMA salary remittance calculations.
Why Choose Beacon Filing
Beacon Filing specialises in FEMA compliance for Vietnamese-invested companies in India. We understand the unique requirements of the Vietnam-India investment corridor, including Vietnam's outward investment registration process, the evolving document authentication framework (transitioning from embassy attestation to apostille), and SBV foreign exchange regulations. Our team handles the complete RBI reporting cycle from FC-GPR through FLA returns and coordinates with AD banks to ensure efficient FEMA processing. Whether you are a Vietnamese state-owned enterprise or a private company exploring the Indian market, we provide end-to-end FEMA compliance support.