VCI Legal – March 5. 2026

The Law on Investment 2025 (“LoI 2025”), adopted by the National Assembly and takes effect on 01 March 2025, introduces several significant reforms to Vietnam’s investment regulatory framework. The new Law aims to streamline administrative procedures and improve the regulatory efficiency and facilitate investment activities both domestic and foreign investors.

Key Takeaways

· Foreign investors may now establish an economic organization before completing IRC procedures, allowing greater flexibility in structuring investment projects.

· 38 conditional business lines have been removed, while the regulatory scope of 20 sectors has been revised.

· The approval authority for investment policy approvals has been further decentralised to provincial authorities and industrial zone management boards.

· Certain projects located in high-tech zones and digital technology parks may now qualify for a project term of up to 70 years.

· Investment and business activities relating to e-cigarettes and heated tobacco products are now prohibited.

Detailed Regulatory Developments

1. Greater Flexibility Investment Licensing Procedures

Under the old LoI 2020, foreign investors establishing an economic organization were generally required to first obtain an Investment Registration Certificate (“IRC”) for the relevant investment project before proceeding with enterprise registration to obtain an Enterprise Registration Certificate (“ERC”) [1].

The LoI 2025 introduces a more flexible regulatory approach. Pursuant to Article 19.2, foreign investors may establish an economic organization for the purpose of implementing an investment project prior to completing the procedures for the issuance or amendment of the IRC, provided that the foreign investor market access conditions are satisfied at the time of incorporation.

2. Reduction and Adjustment of Conditional Business Lines

In line with Resolution No. 68-NQ/TW and Resolution No. 198/2025/QH15, the Government has undertaken a review of the list of conditional business lines.

As a result:

· 38 conditional business lines have been abolished;

· the regulatory scope of 20 sectors has been revised. [2]

In addition, the regulatory approach for certain sectors has shifted from a pre-licensing regime, which requires permits or certifications prior to commencing operations, to a post-inspection

regime [3]. This reform is intended to reduce market entry barriers and facilitate a more business-friendly regulatory environment.

The Government is also expected to introduce a revised framework distinguishing between sectors that continue to require prior licensing and sectors subject to a declaration-based compliance mechanism. Under this approach, investors may commence operations after statutory conditions are satisfied and will subsequently be subject to post-licensing supervision by competent authorities.

Notably, the law expressly prohibits investment and business activities relating to e-cigarettes and heated tobacco products. [4]

3. Decentralization of Investment Policy Approval Authority (“Chấp thuận chủ trương đầu tư”)

Under the LoI 2020, the authority to approve investment policies was largely determined based on quantitative thresholds, such as the scale of the project or the number of resettled residents [5].

The LoI 2025, by contrast, introduces a more decentralized approval framework [6].

While the National Assembly and the Prime Minister continue to retain authority over projects with significant national impact or those involving sensitive sectors, broader approval powers have been delegated to:

· provincial-level authorities; and

· management boards of industrial parks, export processing zones, high-tech parks and economic zones.

This decentralization is expected to reduce administrative bottlenecks and accelerate faster approval of investment projects.

4. Extended Project Duration for Certain Investment Projects

The general duration limits for investment projects remain unchanged:

· 50 years for projects located outside economic zones [7]; and

· 70 years for projects within economic zones [8].

However, under the LoI 2025, projects implemented in high-tech zones, concentrated digital technology parks, or those eligible for special investment incentives may also qualify for the maximum duration of 70 years [9].

The law also introduces a mechanism allowing investors to apply for extensions of the project term upon its expiration, subject to compliance with statutory requirements and provided that the project does not involve outdated technology or significant environmental risks.

Practical Implications for Investors

The LoI 2025 reflects Vietnam’s ongoing efforts to modernise its investment regulatory framework and improve the ease of doing business.

From a practical perspective, the new regulations may:

· provide greater flexibility in structuring investment projects,

· reduce regulatory barriers for certain sectors, and

· accelerate the approval process for investment projects through decentralisation.

Investors planning new projects in Vietnam should review the new regulations carefully to assess how these changes may affect their investment structures, licensing strategies and regulatory compliance requirements.

 

Reference

[1] Article 37, Law on Investment 2020

[2] Annex IV, Law on Investment 2025 [3]: https://pbgdpl.quangninh.gov.vn/gioi-thieu-mot-so-diem-moi-cua-luat-dau-tu-2025/ (accessed on 02 March 2025)

[4] Article 6.1(l), Law on Investment 2025

[5] Article 30, 31, 32, Law on Investment 2020

[6] Article 26, Law on Investment 2025

[7] Article 44.2, Law on Investment 2020; Article 31.2, Law on Investment 2025

[8] Article 44.1, Law on Investment 2020; Article 31.2, Law on Investment 2025

[9] Article 31.2, Law on Investment 2025

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