Key words: investment, international investment, foreign investment, FDI

On December 11th, 2025, during its 10th sitting, the 15th National Assembly of Vietnam enacted the Law on Investment 2025, replacing the current Law on Investment 2020, marking an important milestone in the country's investment framework in the modern era. In this transformation, the investment sector has received particular attention with many groundbreaking amendments. The law has contributed to perfecting the legal framework for investment, expanding the development space for strategic industries, strengthening decentralization to localities, and promoting the attraction of high-quality investment.

The Law on Investment 2025 includes 07 Chapters and 52 Articles that will take effect from March 1^st, 2026 (except Article 7. Conditional Business Lines and Appendix IV. List of Conditional Business Lines, which will take effect from July 1^st, 2026).

1. Expanding and Clarifying the Legal Framework for Investors.

 Under Article 6 of the Law on Investment 2025, Vietnam has expanded the list of prohibited business lines by adding three new categories, namely:

(i) trading in national treasures;

(ii) export of antiques and relics; and

(iii) trading in electronic cigarettes and heated tobacco products.

Notably, the Law also authorizes the Government to periodically review and submit proposals to the National Assembly for amendments or additions to the list of prohibited business lines, in line with socio-economic conditions and the State’s regulatory and management requirements. This mechanism enhances regulatory flexibility while ensuring alignment with national interests and public policy objectives.

In addition, Article 7 of the Law on Investment 2025 introduces important reforms to the management of conditional business lines. The Government is tasked with publishing:

• a list of conditional business lines that require licenses or certificates prior to commencement of operations; and
• a list of conditional business lines for which the management approach will shift from prior licensing or certification to disclosure of business conditions, subject to post-inspection (ex post supervision) by competent authorities.

Compared with the Law on Investment 2020, Appendix IV of the Law on Investment 2025 has reduced and revised the scope of a number of conditional business lines and sectors. (List of 38 Conditional Business Activities Removed as below).

This reform is expected to reduce initial compliance burdens and create a more transparent and investor-friendly business environment, particularly for sectors assessed as posing lower regulatory risks.

2. Foreign Investors are not allowed to establish a company before applying for an investment project

According to Law on Investment 2020, clause 1 of Article 22 (amended by Law No. 90/2025/QH15):

“Foreign investors are allowed to establish an economic organization to implement an investment project prior to carrying out the procedures for the issuance or adjustment of the Investment Registration Certificate…”.  

Accordingly, under the previous regulations, foreign investors were required to have an approved investment project before being permitted to establish an enterprise.

However, the Law on Investment 2025 has now expressly addressed this issue.

Clause 2 of Article 19 of the Law on Investment 2025 allows foreign investors to establish an enterprise without having an investment project in advance, provided that they satisfy the applicable market access requirements. Specifically,

“2. Foreign investors may establish an economic organization to implement an investment project prior to carrying out the procedures for the issuance or amendment of the Investment Registration Certificate, and must satisfy the market access requirements applicable to foreign investors as prescribed in Article 8 of this Law when conducting the procedures for establishing an economic organization.”.

3. Investment projects subject to In-principle Approval (IPA) (“Chấp thuận chủ trương đầu tư” in Vietnamese) and competent approval authorities

With a fragmented approach, under the Law on Investment 2020, the authority to grant investment policy approval was regulated in a fragmented manner across three separate Articles, corresponding to three different competent authorities. Each level of authority is associated with many standard tools, such as capital scale, project type, land use potential, or the extent of impact on a country, national defense, and the environment:

• The National Assembly: Article 30;
• The Prime Minister: Article 31;
• Provincial People’s Committees: Article 32.

This regulatory structure requires investors to review all three Articles simultaneously to determine the competent authority for their projects. In practice, this approach often caused confusion, increased legal uncertainty, and prolonged the preparation and implementation timeline, particularly for projects involving complex or overlapping criteria.

To address these shortcomings, the Law on Investment 2025 has restructured the regulatory framework for investment policy approval in a more systematic and logical manner.

• Article 24 establishes a single, consolidated list of projects that are subject to investment policy approval;
• Article 25 then clearly allocates approval authority among the competent bodies based on that list, namely: The National Asssembly; The Prime Minister; and theChairperson of the Provincial People’s Committee. (Different from the Law on Investment 2020, the approval authority is the Provincial People's Committee).

Under this approach, investors need only determine whether their projects fall within the scope of projects requiring investment policy approval (Article 24), and can then immediately identify the competent approving authority (Article 25), instead of navigating multiple separate provisions as under the previous law.

It can be seen that the changes in the regulations on approval authority carry significant implications. On the one hand, the new framework allows the State of Vietnam to grant greater autonomy to local authorities, thereby reducing pressure on the central government apparatus. At the same time, it facilitates faster development of industrial and infrastructure projects in line with local conditions and clarifies the role and decision-making authority of the head of the local government, namely the Chairperson of the Provincial People’s Committee. On the other hand, from the investor’s perspective, this reform contributes to simplifying administrative procedures, shortening processing timelines, etc. And engaging directly with provincial-level authorities also allows investors to communicate more effectively with decision-makers, facilitating project adjustments and smoother implementation in practice.

For example, with respect to investment projects for the development and business of infrastructure of industrial parks, export processing zones, and digital industrial parks as stipulated in Clause 14 Article 24 of the Law on Investment 2025, in conjunction with Point (a) Clause 3 Article 25 of this Law, the authority to grant investment policy approval now rests with the Chairperson of the Provincial People’s Committee, rather than the Prime Minister as provided under the Law on Investment 2020.     

4. Special Investment Procedures – “Fast-Track” for Investors to approach the Vietnamese market

The Law on Investment 2025 continues to maintain and further expand the special investment procedure under Article 28, clearly reflecting Vietnam’s policy orientation toward administrative reform and the facilitation of high-value, fast-track investment projects.

Under Article 28 of the Law on Investment 2025, investors are entitled to opt for registration under the special investment procedure for investment projects implemented in industrial parks, export processing zones, high-tech parks, centralized digital technology zones, free trade zones, international financial centers, and functional zones within economic zones, except for projects that are subject to investment policy approval in accordance with Government regulations. Compared to previous regulations, the scope of application of this procedure has been significantly broadened, particularly with the inclusion of new investment models such as centralized digital technology zones, free trade zones, and international financial centers.

Projects registered under the special investment procedure are exempt from a wide range of pre-approval requirements, including:

• Investment policy approval;
• Technology appraisal;
• Preparation of environmental impact assessment reports (“Báo cáo Đánh giá tác động môi trường” – ĐTM in Vietnamese);
• Detailed planning;
• Construction permits;
• and other approval, licensing, or consent procedures in the fields of construction and fire prevention and firefighting.

This streamlined “fast-track” mechanism substantially shortens the investment preparation timeline, reduces compliance costs, and enables projects to move swiftly into the implementation phase.

In exchange for these procedural simplifications, investors are required to undertake enhanced compliance obligations, as expressly provided under Clause 2 Article 28 of the Law on Investment 2025. Specifically, investors must provide a written undertaking confirming their compliance with applicable conditions, standards, and technical regulations under laws on construction, environmental protection, and fire prevention and firefighting. Investors are also required to submit an investment project proposal that includes the identification and forecasting of environmental impacts and corresponding mitigation measures, serving as a substitute for the preliminary environmental impact assessment. Where applicable, information on the use of technologies subject to transfer restrictions must also be disclosed. This regulatory approach clearly reflects a shift from ex-ante control to post-inspection and ongoing supervision, placing greater responsibility on investors during the project implementation phase.

Furthermore, as stipulated in Article 28, when developing investment projects under special investment procedures, the Law on Investment 2025 also requires consultants to prepare several economic and technical reports in such cases. Therefore, although not exactly an "absolutely free" mechanism, this approach in the Law on Investmen 2025 is still a new and groundbreaking regulation, applicable to investment projects in the semiconductor industry, high technology, etc., in special zones as prescribed.

5. Adjustment of Investment Project Duration under the Law on Investment 2025

Article 31 on the Law on Investment 2025 maintains the general rule that the duration of an investment project must not exceed 50 years for projects located outside economic zones, or 70 years for projects implemented within economic zones.

However, the key new feature is that investors are now allowed to adjust (increase or decrease) the duration of an investment project during its implementation. Specifically,

“4. During the implementation of an investment project, the investor may adjust the project's operating period to increase or decrease it. The operating period of the investment project after adjustment must not exceed the period stipulated in Clauses 1 and 2 of this Article.”.

This represents a notable departure from the previous framework under Article 44 of the Law on Investment 2020, which did not allow such adjustments during the project lifecycle and only permitted an extension when the project term was nearing its expiry.

In addition, Clause 6 Article 52 of the Law on Investment 2025 allows investment projects that were already being implemented prior to the effective date of the Law to apply for an adjustment of their project duration, where the remaining term no longer satisfies the financial plan or business plan of the transferee.

These changes reflect a more flexible and commercially responsive approach to investment regulation. Allowing project duration to be adjusted during implementation enables investors to better align the legal lifespan of a project with its actual business and financial realities, particularly in the context of project restructuring, refinancing, or changes in market conditions. The transitional provision for ongoing projects further enhances legal certainty and protects the legitimate interests of investors, especially in M&A transactions involving project transfers.

List of Conditional Business line to be removed

No.	Conditional business line to be removed	Business sector
1.	Tax procedure services	Finance, Accounting, Commerce
2.	Customs procedure services	Finance, Accounting, Commerce
3.	Insurance auxiliary services	Finance, Accounting, Commerce
4.	Commercial inspection services	Finance, Accounting, Commerce
5.	Temporary import and re-export of goods subject to excise tax	Finance, Accounting, Commerce
6.	Temporary import and re-export of frozen food	Finance, Accounting, Commerce
7.	Temporary import and re-export of used goods	Finance, Accounting, Commerce
8.	Energy auditing	Finance, Accounting, Commerce
9.	Employment services	Culture, Society and Health
10.	Labour outsourcing services	Construction, Transportation
11.	Automobile warranty and maintenance services	Construction, Transportation
12.	New building, conversion, repair, and restoration of inland waterway vehicles	Construction, Transportation
13.	Maritime safety assurance services	Construction, Transportation
14.	Sea towing services	Construction, Transportation
15.	New building, conversion, and repair of ships	Construction, Transportation
16.	Flight operation assurance services	Construction, Transportation
17.	Multimodal transport services	Construction, Transportation
18.	Architectural services	Construction, Transportation
19.	Construction activities by foreign contractors	Construction, Transportation
20.	Cost management services for construction investment	Construction, Transportation
21.	Management and operation services for apartment buildings	Construction, Transportation
22.	Management and operation services for cremation facilities	Culture, Society and Health
23.	Data centre services	Technology, Land
24.	Study abroad consulting services	Culture, Society and Health
25.	Breeding and planting of wild species listed under CITES and the endangered species lists	Agriculture, Forestry, Fisheries
26.	Breeding common wild animals	Agriculture, Forestry, Fisheries
27.	Export, import, re-export, transit, and introduction from sea of natural specimens of species under CITES and endangered species lists	Agriculture, Forestry, Fisheries
28.	Export, import, and re-export of artificially propagated or bred specimens under CITES and endangered species lists	Agriculture, Forestry, Fisheries
29.	Processing, trading, transporting, advertising, displaying, and storing specimens of species under CITES and endangered species lists	Agriculture, Forestry, Fisheries
30.	Trading food under the specialised management of the Ministry of Agriculture and Rural Development	Agriculture, Forestry, Fisheries
31.	Animal quarantine services	Agriculture, Forestry, Fisheries
32.	Cosmetic surgery services	Culture, Society and Health
33.	Calibration, testing, and verification services for measuring instruments	Technology, Land
34.	Art performance, fashion shows, beauty contests, and modelling services	Culture, Society and Health
35.	IT infrastructure construction and software development for land information systems	Technology, Land
36.	Land database construction services	Technology, Land
37.	Printing and minting money	Finance, Accounting, Commerce
38.	Archiving services	Finance, Accounting, Commerce