Effective from March 1, 2026, the Law on Investment 2025 (No. 143/2025/QH15, passed by the National Assembly on December 11, 2025) officially takes effect (with certain provisions concerning conditional business sectors becoming effective from July 1, 2026). This legislation is not merely an amendment to the 2020 Investment Law but represents a profound institutional reform aimed at creating a more open, transparent, and professional investment environment, thereby strongly attracting both domestic and foreign capital inflows.
The 2026 Investment Law (commonly referred to by its effective year) comprises 7 chapters and 52 articles. It focuses on significantly reducing pre-approval (“ex-ante”) procedures, shifting emphasis to post-audit (“ex-post”) supervision, expanding investor autonomy, and prioritizing high-tech sectors, green economy initiatives, and innovation-driven activities. Compared to the 2020 Law, the new framework substantially lowers administrative barriers, enabling enterprises to save considerable time and costs—an improvement that many foreign investors regard as a major catalyst for increased FDI into Vietnam.
Below are the 8 most prominent new features, analyzed in detail with their practical implications and key considerations for investors.
Substantial Reduction in Conditional Business Sectors – Shift from Pre-Approval to Post-Audit Management
Appendix IV of the 2025 Investment Law eliminates 38 conditional business lines and adjusts the scope of 20 others compared to the previous law. Notable removals include tax procedure services, customs brokerage, insurance auxiliary services, labor outsourcing, commercial appraisal, and temporary import-re-export of frozen foods or used goods.
Article 7 authorizes the Government to issue two lists: (i) sectors still requiring pre-operation licensing or certification, and (ii) sectors fully transitioned to self-declared compliance standards enforced through post-audit supervision. From July 1, 2026, the conditional list is expected to shrink to approximately 198 sectors (a significant reduction).
Practical benefits: Enterprises save substantial time previously spent on licensing applications (often shortened from months to weeks) and reduce administrative costs. Market entry becomes significantly easier, particularly in services and logistics. However, businesses must strictly comply with published standards to mitigate risks of subsequent inspections, penalties, or license revocation.
Foreign Investors Permitted to Establish Enterprises Prior to Securing an Investment Project
Clause 2, Article 19 Investment Law allows foreign investors to establish an economic organization (i.e., obtain an Enterprise Registration Certificate) before completing procedures for the issuance or amendment of an Investment Registration Certificate (IRC), provided they satisfy market access conditions under Article 8.
Unlike the prior regime—which required an investment project before company formation—this represents a breakthrough, enabling foreign investors to set up a legal entity and develop strategic plans without being delayed by investment approval procedures.
Impact: Particularly advantageous for private equity funds and multinational corporations seeking to test the Vietnamese market or establish a presence before committing substantial capital.
Expanded Application of Special Investment Procedures (“Green Channel”)
Article 28 Investment Law permits investors to opt for special procedures in industrial zones, export processing zones, high-tech zones, concentrated digital technology zones, free trade zones, international financial centers, and functional areas within economic zones (excluding projects requiring investment policy approval).
Privileges include exemption from investment policy approval, technology appraisal, preliminary environmental impact assessment, detailed planning, construction permits, and fire prevention approvals. Investors need only commit to meeting standards and submit an economic-technical report along with mitigation measures for environmental impacts.
Benefits: Project implementation timelines can be reduced from 6–12 months to 1–3 months, making this highly attractive for digital technology, semiconductor, AI data center projects (minimum capital VND 6,000 billion), or innovation centers (minimum VND 3,000 billion).
Clarification and Narrowing of Projects Requiring Investment Policy Approval
Article 24 explicitly enumerates 20 categories of projects subject to investment policy approval (replacing the previous broad, authority-based criteria). Large-scale projects involving land use, forests, significant resettlement, national defense and security, casinos, nuclear power, special seaports, and major urban developments remain subject to approval.
Approval authority is clearly delineated: National Assembly for exceptional projects, Prime Minister for 8 categories, and Provincial People’s Committee Chairpersons for 13 categories. This enhances transparency and accountability of state agencies.
Flexible Adjustment of Project Operational Duration
Article 31 Investment Law retains the maximum duration of 50 years (outside economic zones) or 70 years (inside economic zones) but allows investors to adjust (increase or decrease) the duration during implementation, subject to statutory limits.
Clause 6, Article 52 Investment Law further permits ongoing projects predating the law’s effective date to adjust duration if the original financial plan becomes unviable.
Benefits: Provides greater flexibility for enterprises to adapt to market volatility, inflation, or strategic shifts.
Elimination of Two Grounds for Mandatory Adjustment of Investment Policy
Only 5 grounds now trigger mandatory adjustment of investment policy (Clause 3, Article 33): changes to objectives requiring approval, significant land area increases, site relocation, implementation delays exceeding 24 months, duration changes, or investor changes.
The previous requirements concerning capital increases of 20% or more and changes to previously appraised technology have been removed, substantially reducing administrative burdens for minor project modifications.
Abolition of Investment Policy Approval for Outward Investment
Article 42 significantly narrows scope: only large-scale or conditional-sector outward investments require an Outward Investment Registration Certificate. Other projects need only register foreign exchange transactions with the State Bank of Vietnam. The former requirements for National Assembly or Prime Ministerial approval of outward investment policy have been fully eliminated.
Expanded Provisions on Transfer of Investment Projects
Clause 7, Article 52 Investment Law permits the transfer of any investment project that has received investment policy approval or an Investment Registration Certificate (broader than the prior limitation to projects with approved investors).
Important Considerations for Implementing the 2026 Investment Law
- Transitional arrangements: Projects underway before March 1, 2026 continue under the old law unless amended. Pending applications will be transferred to provincial People’s Committees if no decision has been issued.
- Potential risks: The strengthened post-audit regime increases enterprise responsibility for compliance with environmental, construction, and fire safety standards. Violations may result in tax recovery, fines, or license revocation.
- Opportunities in priority sectors: High-tech, green economy, semiconductors, data centers, and innovation projects qualify for tax incentives, land rental exemptions/reductions, and support from the Investment Support Fund.
- Resolved longstanding issues: Foreign investors no longer need a project before company formation; procedures in industrial zones and economic zones are maximally streamlined.
The 2026 Investment Law not only simplifies procedures but also elevates Vietnam’s investment governance to international standards, fostering a more equitable and attractive environment for both domestic and foreign investors.
For detailed and comprehensive advice on investment procedures under the 2026 Investment Law, foreign direct investment and capital contribution, project transfers, or related capital and corporate governance matters, please contact Siglaw Firm:
Head Office in Hanoi: No. 44/A32 – NV13, Area A Geleximco, Le Trong Tan Street, Tay Mo Ward, Hanoi, Vietnam.
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