Key Notable Changes of The 2025 Law on Investment

Summary: The amended Law on Investment was passed by the National Assembly on the morning of 11 December 2025, introducing fundamental and breakthrough changes to investment processes and procedures, particularly with respect to investment policy approval, procedures applicable to foreign investors, and the management of foreign investment activities. This Law takes effect from 01 March 2026. Notably, the provisions on the List of conditional business lines and sectors will take effect from 01 July 2026, while Clause 3, Article 50 will take effect earlier, from 01 January 2026.

This article highlights the key amendments of the 2025 Law on Investment, with a focus on policy-oriented changes and their notable practical implications for both domestic and foreign investors.

1. “Framework law” approach – enhancing flexibility and stability of the investment environment

One of the most significant and impactful changes is the shift toward a “framework law” approach, whereby regulations are formulated in a general and principle-based manner, rather than through detailed and rigid provisions as under the previous regime. Accordingly, the amended Law on Investment significantly reduces procedural and dossier-specific provisions at the statutory level. Instead, it directly delegates authority to the Government to provide detailed implementation guidance through decrees. For example, provisions governing dossiers, processes, and procedures for issuing investment policy approval decisions (Article 22), Investment Registration Certificates (Article 25), and project adjustment procedures (Article 26) have been repealed under the new Law and replaced by a mechanism empowering the Government and competent sectoral authorities to issue detailed regulations.

In addition, the new Law narrows the scope of explicitly listed investment incentives and instead focuses on objectives and sectoral orientations, specifically by:

• Emphasizing development objectives of sectors and industries;
• Linking incentives to strategic policy orientations such as innovation, high technology, green transition, sustainable development, and investment in disadvantaged areas;
• Granting the Government authority to prescribe detailed criteria and corresponding incentive levels in line with each stage of socio-economic development.

This reflects a clear transition from a procedure-driven management approach to one based on objectives and principles, helping to reduce the risk of statutory obsolescence as administrative procedures evolve, while enhancing flexibility, coherence, and adaptability in investment governance and policy implementation in response to the country’s changing context.

2. Reduction of administrative procedures and promotion of domestic and foreign investment activities

2.1. Narrowing the National Assembly’s authority and reducing the number of projects subject to investment policy approval

The amended Law restructures the investment policy approval regime by clarifying the scope of projects subject to investment policy approval and retaining control mechanisms only for projects that are truly significant or sensitive, such as seaports, airports, telecommunications, press and publishing activities, and projects implemented in areas affecting national defense and security.

Under the new regulations, no project is subject to investment policy approval by the National Assembly, except for projects implemented under special mechanisms that are not expressly regulated in the Law or in resolutions of the National Assembly. Projects that previously fell within the authority of the National Assembly are now delegated to the Government for consideration and approval, while other projects are further decentralized to the provincial-level People’s Committees or to the Management Boards of industrial parks, hi-tech parks, and economic zones (where projects are implemented within such zones).

Notably, the amended Law excludes three categories of projects previously stipulated under Clause 8, Article 24 from the requirement to obtain investment policy approval, thereby further reducing procedural burdens for investors in project implementation, namely:

• Investment projects of individuals that are not required to obtain prior approval from the provincial People’s Committee before decisions on land lease or permission for change of land use purpose are issued;
• Investment projects for the construction of technical infrastructure of industrial clusters;
• Mineral exploitation projects subject to auction of mineral exploitation rights; and mineral exploitation projects serving projects, works, or work items implemented under emergency mobilization measures in accordance with the Law on Geology and Minerals.

2.2. Simplifying procedures for overseas investment

The new Law simplifies procedures for outward investment, notably by abolishing the investment policy approval procedure for outward investment and narrowing the scope of projects required to undergo procedures for the issuance of an Outward Investment Registration Certificate or outward investment registration.

Under the new regulations, the investment policy approval procedure for outward investment is largely abolished, except for projects of large scale implemented under special mechanisms, in which case the Ministry of Finance shall report to the Prime Minister for consideration and approval prior to the issuance or amendment of the Outward Investment Registration Certificate.

With respect to outward investment registration, the Ministry of Finance is the competent authority to issue the Outward Investment Registration Certificate for:

• Outward investment projects with investment capital reaching the threshold prescribed by the Government (currently not yet issued); or
• Projects falling within conditional outward investment sectors or trades, such as banking, insurance, real estate business, and press and media activities.

At the same time, 03 cases are excluded from the requirement to apply for a Certificate of Registration for Foreign Exchange Transactions, and only require the registration procedure for foreign exchange transactions in accordance with the law on foreign exchange management, including:

• Overseas investment projects that do not fall within the cases subject to outward investment registration as mentioned above;
• Overseas investment projects related to defense and security are implemented according to agreements between the Government of Vietnam and the Government of the host country.
• Overseas investment projects by state-owned corporations, conglomerates, and other economic organizations as regulated by the Government.

These changes aim to shorten project preparation time, reduce compliance costs, and enhance investor initiative.

3. Investment incentive policies focusing on key and priority sectors
In parallel with the reduction of administrative procedures, the 2025 amended Law on Investment continues to refine the investment incentive framework, adopting a more selective approach that concentrates state resources on sectors and industries playing a leading role in growth and the transformation of the economic development model, such as high technology, digital finance, sustainable development, and innovation.

3.1. Establishment of an Investment Support Fund:

Targets: The Fund is positioned as a financial instrument aimed at: (i) Supporting investment projects in priority sectors; (ii) Enhancing national competitiveness in attracting large-scale, high-tech projects; and (iii) Creating a flexible support mechanism aligned with international practices, particularly in the context of intensifying competition for investment incentives.

Operation method: The establishment and operation of the Fund will be regulated by the Government, with the underlying principle that it is funded from the state budget and managed by a third-party credit institution.

3.2. Special investment procedure (“green channel”) for key projects

The Law also expands the scope of application of the special investment procedure (“green channel”) under Article 28, allowing investment projects implemented in industrial parks, export processing zones, hi-tech parks, centralized digital technology parks, free trade zones, and functional zones within economic zones to be exempt from a range of procedures, including: investment policy approval; technology appraisal; preparation of environmental impact assessment reports; preparation of detailed zoning plans; issuance of construction permits; and other approval, consent, or licensing procedures in the fields of construction and fire prevention and fighting.

Accordingly, investors are only required to apply for the issuance of an Investment Registration Certificate and commit to satisfying the applicable conditions, standards, and technical regulations under the laws on construction, environment, and fire prevention and fighting. However, prior to commencement of construction, investors must submit to the industrial park management board and the local construction order management authority: (i) an investment economic–technical report; and (ii) a report on the appraisal results of the investment economic–technical report.

3.3. Expansion of investment incentive policies for key projects

The amended Law adds hi-tech agricultural zones, centralized digital technology parks, free trade zones, and international financial centers to the list of investment incentive locations (Article 15.2). Article 18 recognizes special investment incentives for large-scale, high-tech projects with strong spillover effects on socio-economic development, including:

• Projects for the establishment of innovation centers and research and development centers; projects for the development of infrastructure for large data centers, cloud computing infrastructure, mobile infrastructure from 5G and above, and other digital infrastructure in strategic technology sectors as decided by the Prime Minister; projects in strategic technology sectors and projects manufacturing strategic technology products as decided by the Prime Minister, meeting the investment capital scale and capital disbursement timelines prescribed by the Government; and national innovation centers established under decisions of the Prime Minister;
• Projects for the production of key digital technology products; projects for research and development, design, manufacturing, packaging, and testing of semiconductor chips; and projects for the development of artificial intelligence data centers in accordance with the law on the digital technology industry, meeting the investment capital scale and capital disbursement timelines prescribed by the Government.

In addition, the amended Law authorizes the Prime Minister to decide on the application of incentive mechanisms and approvals for particularly important projects without the need to seek approval from the National Assembly.

4. Enhancing the effectiveness of investment project implementation and management
– Business line & sector:

• The Law reduces the number of conditional business lines and sectors, including: tax procedure services; customs brokerage services; insurance auxiliary services; labor subleasing services; commercial inspection services; temporary import–re-export of frozen food products; and temporary import–re-export of goods listed as used goods (Appendix IV).
• Article 7 of the 2025 Law on Investment also provides that the Government shall publish: (i) the list of conditional business lines and sectors that require licensing or certification prior to commencement of operations; and (ii) the list of conditional business lines and sectors for which the management of business conditions is to be shifted from a licensing/certification regime to a regime based on disclosure of business requirements and conditions, subject to ex post inspection.
• In addition, the Law introduces three newly prohibited business lines, namely: (i) Trading in national treasures; (ii) Export trading of antiques and relics; and (iii) Trading in electronic cigarettes and heated tobacco products.

– Facilitating foreign investors at the market entry stage:

The Law permits foreign investors to establish enterprises prior to the issuance of an Investment Registration Certificate, with the aim of creating a more open and attractive investment and business environment, promoting investment inflows, and ensuring equal treatment between domestic and foreign investors in the conduct of this procedure.

– During the Project implementation phase

• The Law allows investors to adjust the project implementation duration during the course of project execution, without having to wait until the project term is close to expiry as previously required.
• It also abolishes two cases in which investment project adjustment procedures were previously required, namely: (i) adjustments to investment capital involving an increase or decrease of more than 20%; and (ii) changes to technology that had already been subject to appraisal.

– Suspension and termination of projects:

Failure to implement a project in accordance with the schedule recorded in the Investment Registration Certificate or the investment policy approval decision is no longer automatically deemed grounds for suspension of the project. However, where a project is subject to an overall delay and, after 24 months, still fails to achieve its investment objectives, its operation may be terminated in accordance with the law.

5. Impact Assessment and Recommendations for enterprises’ transition
5.1. Assessing the impact on investors and businesses

The amendments introduced by the 2025 Law on Investment reflect a consistent policy orientation of the State toward restructuring the investment legal framework in a more open yet selective manner, while enhancing the effectiveness of management over key projects and sectors.

• The reduction in investment policy approval authority and the simplification of investment procedures significantly shorten project preparation and implementation timelines, thereby lowering legal compliance costs and improving predictability in investment activities. This is particularly meaningful for medium- and large-scale production and business projects, as well as projects involving foreign investment.
• Targeted incentive mechanisms—such as the Investment Support Fund, the special investment procedure (“green channel”), and special investment incentives—create clear advantages for enterprises operating in high-technology, innovation-driven sectors, international financial centers, free trade zones, and strategic projects. However, this selective approach also imposes higher requirements on investors in terms of implementation capacity, long-term commitments, and actual project performance.
• Greater flexibility in mechanisms for project adjustment, extension, and termination, together with the reduction of conditional business lines and sectors, contributes to a more transparent and substantive investment and business environment.

However, the new “framework law” approach and the strong decentralization embedded in the amended Law also give rise to certain limitations and challenges in practical application.

• The delegation of many critical matters to decrees and implementing regulations may create legal gaps during the transitional period, particularly where such subordinate legislation is not issued in a timely manner or lacks consistency. In the short term, this may increase investor caution and cause uncertainty for local implementing authorities.
• Deep decentralization to the Government, provincial-level People’s Committees, and management boards, while expediting dossier processing, also entails the risk of divergent interpretations and application of the law across different localities.
• The strong shift from ex ante control to ex post supervision for many conditional business lines and sectors increases the burden of state management and oversight, potentially weakening the capacity to detect and address violations, especially where inter-agency coordination mechanisms remain limited.

5.2. Recommendations for transition and adaptation for businesses
In light of the above changes, investors and enterprises are advised to consider the following transition and adaptation orientations:

• Proactively monitor and promptly update implementing legal instruments, in particular decrees, circulars, and policy directives issued by the Government following the entry into force of the amended Law on Investment. At the same time, close attention should be paid to the State’s policy orientation and adjustments in each development phase, so as to timely review and adjust investment strategies, business models, and project structures in line with the new legal framework, thereby mitigating risks during the transitional period.
• Leverage incentive mechanisms and special procedures, especially the “green channel” mechanism and special investment incentive policies, through strategic selection of investment locations and early, thorough preparation of capacity profiles, implementation plans, and project performance commitments from the outset.
• Actively adjust project timelines and scope during the implementation phase, rather than waiting until the final stages, in order to reduce legal risks associated with overall project delays and potential project termination.
• For enterprises engaging in outward investment, reassess investment structures and capital flows to take advantage of the streamlined approval regime, while ensuring full compliance with foreign exchange management regulations and conditions for outward investment under the new legal framework.
• Prepare for enhanced ex post supervision, as many business lines transition from ex ante licensing to post-licensing management, by strengthening internal compliance systems, risk management frameworks, and comprehensive legal record-keeping practices.

———————————————–

By Trang Linh – Associate at Midland & Partners