Law on Investment 2025: Notable breakthrough changes
On December 11, 2025, the National Assembly passed the Law on Investment 2025, marking a significant step forward in the refinement of Vietnam’s investment legislation. With numerous provisions amended and supplemented to better align with practical considerations and international commitments, the Law is expected to enhance the investment environment and improve the effectiveness of state administration in the investment sector. Most provisions of the Law will take effect on March 1, 2026, with several notable changes as follows:
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1. Changes in the licensing sequence for investment projects involving the establishment of a new economic organization by foreign investors.
Clause 2, Article 19 of the Law on Investment 2025 introduces a significant change to the procedure for implementing investment projects by foreign investors. Accordingly, foreign investors are permitted to establish an economic organization to implement the project prior to carrying out the procedures for issuance or adjustment of the Investment Registration Certificate (IRC), provided that the economic organization satisfies the market access conditions at the time of its establishment. This change helps shorten the project preparation time and increases flexibility for investors, in line with administrative reform procedure and the attraction of investment capital into priority sectors.
However, this regulation also raises certain practical issues, particularly concerning the subsequent procedures for issuance of the IRC after the establishment of the economic organization.
According to the draft Decree guiding the implementation of the Law on Investment 2025, within 12 months from the date of establishment, the economic organization must complete the procedures for obtaining of the Investment Registration Certificate to implement the investment project in accordance with its registered business lines. Any amendment to the enterprise registration to add other investment and business lines may only be carried out after the Investment Registration Certificate has been issued.
This regulation aims to ensure that the establishment of the economic organization is linked to the implementation of a specific investment project, while limiting the expansion of business lines prior to the commencement of the project. However, this approach may reduce the flexibility of investors during the project preparation phase, especially when the implementation timeline depends on external factors such as land procedures, planning approvals, environmental impact assessment, or construction permits, which may extend beyond the investor’s control.
It should be noted that the above regulation is currently only proposed in the draft Decree guiding the implementation of the Law on Investment 2025 and has not yet taken legal effect. Therefore, the final form and practical application may still be subject to change upon the promulgation of the official guiding Decree.
2. Simplification of procedures for outward investment
The Law on Investment 2025 introduces significant amendments to simplify procedures for outward investment activities by abolishing the requirement to obtain an Investment Registration Certificate in certain cases and adjusting the mechanism for appraisal and decision on investment projects.
First, revisions to the appraisal mechanism for outward investment projects
Compared with the Law on Investment 2020 – under which certain projects required investment policy approval by the National Assembly or the Prime Minister – the Law on Investment 2025 simplifies this process by assigning the Ministry of Finance to directly handle the issuance of the Investment Registration Certificate for outward investment. For large-scale projects or those proposing special incentive policies (except for exempted cases), the Ministry of Finance shall report to and seek the Government’s opinion before issuing the certificate.
Second, the abolition of the requirement to obtain an Investment Registration Certificate for certain outward investment projects.
Investors undertaking small-scale projects (below the threshold prescribed by the Government) and not operating in conditional sectors such as banking, insurance, securities, press, radio and television broadcasting, or real estate business shall not be required to apply for an Investment Registration Certificate for outward investment. Certain projects related to national defense and security or specific projects of state-owned enterprises are also exempt from this requirement. In these cases, investors are only required to register foreign exchange transactions with the State Bank of Vietnam in accordance with applicable regulations.
Third, reduced frequency of investment activity reporting.
The new Law requires investors to submit reports on outward investment activities on a semi-annual basis (every six months) to the Ministry of Finance, instead of quarterly reporting as previously required.
These amendments contribute to reducing administrative procedures, creating favorable conditions for enterprises – particularly small and medium-sized enterprises – in implementing outward investment activities and expanding access to international markets, technology, and resources.
3. Reduction of conditional business investment sectors
One of the notable reforms in the Law on Investment 2025 is the review and significant reduction of the list of conditional business investment sectors. Accordingly, Appendix IV of the Law now comprises only 196 sectors, representing a reduction of 38 sectors compared to previous regulations. These provisions will take effect from July 1, 2026.
The reduction has been implemented by eliminating sectors no longer necessary to be managed under the “pre-approval” mechanism, while shifting toward specialized management or post-audit mechanisms. The abolished sectors can be categorized into several main groups as follows:
First, the group of financial, accounting, labor, and commercial services.
Several supporting service activities have been removed from the list of conditional business sectors, notably: (1) tax procedure services; (2) customs brokerage services; (3) employment services; (4) labor outsourcing services; (5) auxiliary insurance services; and (6) commercial inspection services. The abolition of business conditions for these services is intended to reduce licensing procedures while enhancing competition and professionalization in the consulting and business support services market.
Second, the group of commercial and import-export activities
Certain types of temporary import – re-export business activities that previously required business conditions have been removed from the list, including (1) temporary import and re-export of frozen food products; (2) goods subject to special consumption tax; and (3) used goods. These activities are now primarily regulated under the laws on foreign trade management and customs rather than under the investment business conditions mechanism.
Third, the group of construction and construction technical services.
The Law on Investment 2025 abolishes a number of sectors in the construction field from the list of conditional business investment sectors, including: (1) architectural services, construction surveying, design, and design appraisal; (2) construction works execution; (3) construction supervision; (4) investment project management in construction; and (5) construction cost management and inspection. The removal of these sectors stems from the fact that conditions on organizational and professional capacity have been fully regulated in the Law on Construction and specialized legal documents. Maintaining them in the Investment Law list could lead to regulatory overlap “license upon license” situations.
Fourth, the group of transportation, infrastructure, and logistics services.
Certain activities in the transportation and infrastructure services sectors have also been removed from the list of conditional business sectors, such as urban railway business or certain maritime services (for example: tugboat services, maritime safety assurance). This adjustment aims to create a more favorable legal environment for attracting investment into transportation infrastructure and logistics services.
The reduction of 38 conditional business sectors reflects a strong reform trend toward reducing pre-approval requirements, strengthening post-audit oversight, and eliminating overlapping business conditions with specialized legislation. This not only reduces compliance costs and administrative procedures for enterprises but also contributes to improving the investment environment and encouraging the private sector to participate in service and infrastructure sectors with development potential.
4. Reallocation of authority for investment policy approval
The Law on Investment 2025 reallocates authority for investment policy approval by transferring part of the authority to approve investment policy for large-scale and significant projects from the National Assembly and the Prime Minister to the provincial-level People’s Committees as provided in Clause 3, Article 25. Specifically, the projects include:
– Investment projects in which the investor proposes that the State allocate or lease land without an auction of land use rights or selects the investor through bidding for projects using land; projects proposing conversion of land use purpose in accordance with land law regulations.
– Investment projects proposing that the State allocate or lease land or permit conversion of land use purpose in areas affecting national defense and security.
– Investment projects proposing that the State allocate sea areas.
– Investment projects for construction of housing (for sale, lease, or lease-purchase) or urban areas, regardless of land use scale or population size, in cases where the investor has obtained land use rights through agreements on the transfer of land use rights or already has land use rights in accordance with the laws on housing and land.
– Investment projects, regardless of land area or population s, located in restricted development zones or historic inner-city areas (as determined in urban planning) of special-class urban areas.
– Investment projects for construction and operation of golf courses, except for cases of investment in construction and operation of golf courses as part of housing or urban area projects where land is allocated or leased through an auction of land use rights or bidding to select the investor.
– Investment projects for construction and business of infrastructure facilities of industrial parks, export processing zones, or centralized digital technology zones.
– Investment projects for the construction of new wharves or port terminals forming part of special seaports or Class I seaports.
– Investment projects for the construction of new airports or aerodromes; runways of airports or aerodromes; passenger terminals of international airports; and cargo terminals of airports or aerodromes with a capacity of 1 million tons per year or more.
– Investment projects for the business of air passenger transport.
– Oil and gas processing investment projects.
– Investment projects requiring the resettlement of 10,000 people or more in mountainous areas, or 20,000 people or more in other regions.
– Investment projects consistent with cultural heritage law, regardless of land area or population size, located within Protection Zone I or Protection Zone II of national or special national monuments recognized by competent authorities, except for Protection Zone I of special national monuments on the World Heritage List.
Provincial-level state management agencies, with the advantage of being closely familiar with the local land fund, infrastructure, and human resources, will have a solid basis to make prompt decisions while bearing full responsibility to the Government for supervising project implementation after approval.
This article was prepared by Thanh Vy, Vy Le with consultation from Lawyer Y Huynh.
This article is provided for general informational purposes only and does not constitute legal advice for any specific case. The legal regulations cited herein are effective as of the time of publication but may have been amended, supplemented, replaced, or ceased to be effective at the time readers refer to them. Accordingly, readers are advised to seek advice from a qualified lawyer before applying any information contained in this article.
