On 11 December 2025, at the 10th Session of the 15th National Assembly, the National Assembly officially passed the new Law on Investment 2025 (the “2025 LOI”), replacing the Law on Investment 2020 (the “2020 LOI”). The 2025 LOI will come into effect on 1 March 2026, except for the provisions relating to conditional business lines under Article 7 and their corresponding list of conditional business lines set out in Appendix IV issued together with the 2025 LOI, which will take effect on 1 July 2026.
The promulgation of the 2025 LOI takes place against the backdrop of Viet Nam’s ongoing efforts to further improve its investment and business environment, address persistent administrative bottlenecks, and enhance its competitiveness in attracting both domestic and foreign capital. The new and amended regulations under 2025 LOI, compared with 2020 LOI, reflect a clear and deliberate shift in regulatory philosophy, under which the State narrows the scope of direct administrative intervention, concentrates regulatory oversight on key and sensitive sectors, and, at the same time, expands the space for business autonomy and investment freedom.
Set out below are the key highlights of the 2025 LOI.
Key takeaways:
- Expanded business freedom: Significant reduction of conditional business lines; shift from pre-approval to standards-based, post regulatory oversight.
- Clearer scope of investment policy approval: Defined list of projects requiring investment policy approval, reducing ambiguity and enhancing predictability at project inception.
- Foreign investors’ earlier market entry: Foreign investors may now establish enterprises before obtaining a new or an amended investment registration certificate, supporting early strategic positioning and corporate structuring.
- Accelerated procedures via “green channel”: Projects in industrial zones and designated economic areas may bypass traditional approvals (e.g., technology appraisal, environmental assessment, construction permits) with compliance commitments, speeding up operations.
- Fewer project amendment requirements: Removal of obligations to adjust investment policy approval for capital or technology changes, providing greater implementation flexibility and reducing procedural risk.
- Simplified outward investment framework: Outward investment policy approval abolished, certain outward investments only require foreign exchange registration, lowering compliance barriers for international expansion.
- Broader real estate project transferability: The scope of real estate projects that can be transferred under 2025 LOI has been expanded, facilitating M&A transactions and investment exits.
Reduction of conditional business lines – expanding business freedom
The 2025 LOI reaffirms the State’s long-standing position that maintaining an excessive number of conditional business lines is no longer compatible with an economy transitioning towards a fully functioning market system. In line with this approach, the 2025 LOI eliminates approximately 38 conditional business lines that are no longer deemed necessary, while revising the scope of 20 other business lines.
Another notable development under the 2025 LOI is the Government’s publication of two distinct lists of conditional business lines. The first list identifies conditional business lines that are required to obtain licenses or certifications prior to commencing investment and business activities. The second list covers conditional business lines for which the management approach has been shifted from ex-ante licensing and certification to the disclosure of applicable requirements and conditions, subject to ex-post inspection and supervision.[1]
This reform goes beyond mere administrative streamlining. It reflects a structural shift from a regulatory model centered on licensing and ex-ante approvals towards one grounded in technical standards, transparency and effective ex-post supervision. Over the medium and long term, this change is expected to play a critical role in enhancing Viet Nam’s national competitiveness and fostering innovation-driven growth.
Clarifying projects subject to investment policy approval
One of the most fundamental reforms introduced by the 2025 LOI lies in the recalibration of the scope of projects subject to investment policy approval. Departing from the previous approach based primarily on approval authority, the 2025 LOI adopts 20 categories of projects that are required to obtain investment policy approval.[2]
This legislative technique represents a more transparent and predictable framework, effectively reducing divergent interpretation and application among competent authorities at the local level. Importantly, it enables investors, from the early stages of project preparation, to clearly ascertain whether their proposed investment falls within the ambit of investment policy approval.
In substantive terms, the 2025 LOI retains the investment policy approval requirement only for infrastructure development projects in certain key and sensitive sectors, including seaports, airports, telecommunications, publishing and press activities, projects involving the use of land or sea areas, projects with potentially significant environmental impacts, projects with resettlement requirements, and projects implemented in areas affecting national defence and security.
By contrast, the 2025 LOI removes the investment policy approval requirement for a broad range of projects that are common in practice, such as commercial housing and urban development projects where investors are selected through auction or tender, projects that have obtained mineral exploitation rights through auction, technical infrastructure projects of industrial clusters, and projects involving land allocation or land lease through land-use right auctions or investor selection by tender.[3]
With respect to approval authority, the 2025 LOI stipulates that National Assembly shall approve investment policy only for projects requiring the application of special mechanisms or policies. The Prime Minister shall approve the investment policy for eight categories of projects, while thirteen categories are subject to approval by the Chairperson of the provincial People’s Committee, instead of the provincial People’s Committee as previously prescribed.[4]
Foreign investors no longer required to apply for Investment Registration Certificate prior to enterprise establishment[5]
A notable and potentially transformative reform introduced by the 2025 LOI is the removal of the requirement for foreign investors to have an Investment Registration Certificate prior to establishing an economic organization.
Under the 2020 LOI, foreign investors are generally permitted to establish an economic organization only after having an investment project and completing the procedures for issuance or amendment of an Investment Registration Certificate, subject to limited exceptions such as innovative start-ups or start-up investment funds.[6] The 2025 LOI adopts a new approach by allowing foreign investors to establish an economic organization without the need to register an Investment Registration Certificate at the outset. Investors should closely follow the forthcoming guiding decree to understand the detailed implementation procedures and practical guidance.
This reform substantially enhances the openness and attractiveness of Viet Nam’s investment environment, facilitates early market entry for foreign investors, and reinforces the principle of equal treatment between domestic and foreign investors in enterprise establishment procedures.
Expansion of the special investment procedure (“green channel” mechanism)[7]
The 2025 LOI further expands the application of the special investment procedure, commonly referred to as the “green channel” mechanism, to projects implemented in industrial zones, export processing zones, high-tech parks, concentrated digital technology parks, free trade zones, international financial centers, and functional areas within economic zones, except for projects that are required to obtain investment policy approval in accordance with Government regulations.
Under the new framework, projects located in these areas may benefit from the special investment procedure without sectoral restrictions. Investors are only required to commit to compliance with applicable statutory conditions, standards and technical regulations, without having to undergo procedures for investment policy approval, technology appraisal, environmental impact assessment, construction permitting or approval, acceptance, and permission in the fields of construction and fire prevention and firefighting.
If implemented in a consistent and coordinated manner at the local level, this mechanism is expected to serve as a powerful catalyst for foreign direct investment, particularly in the context of intensifying regional competition. Nevertheless, its practical effectiveness will largely depend on the manner in which competent authorities apply and enforce ex-post supervision.
Reducing cases requiring adjustment of investment policy approval[8]
In parallel with clarifying the scope of initial investment policy approval, the 2025 LOI also abolishes two cases in which amendment of investment policy approval was previously required, namely where there is a change of total investment capital of 20% or more resulting in a change in project scale, and where there are changes to technology that had been appraised or consulted during the investment policy approval process.
This amendment reflects a more practical and implementable approach, as fluctuations in investment costs and technological adjustments are inherent to most projects, particularly those with long implementation timelines. The removal of the obligation to adjust investment policy approval in these circumstances enhances flexibility in project implementation and significantly mitigates the risk of procedural delays.
Simplification of outward investment procedures
The 2025 LOI continues to streamline outward investment procedures by abolishing the requirement for outward investment policy approval. In addition, it introduces specific cases in which investors are not required to obtain an Outward Investment Registration Certificate and are only required to register foreign exchange transactions in accordance with applicable foreign exchange regulations, including:[9]
- Outward investment projects with capital below a threshold to be prescribed by the Government and not falling within conditional outward investment sectors;
- Outward investment projects related to national defence, and security implemented pursuant to agreements between the Government of Viet Nam and foreign governments; and
- Outward investment projects of state-owned groups, state-owned corporations and other economic organizations as prescribed by the Government.
For outward investment projects that do not fall within the above-mentioned cases, investors are required to obtain an Outward Investment Registration Certificate issued by the Ministry of Finance before implementing the overseas investment project.
This reform is particularly timely in light of the increasing number of Vietnamese enterprises expanding their operations overseas. Investors are advised to closely monitor the forthcoming guidelines to determine the applicable capital thresholds and detailed implementation guidance.
Expansion of the scope of real estate projects eligible for transfer under the Law on Investment[10]
Previously, particularly in the real estate sector, only real estate projects that had been approved in terms of investor selection or had been issued an Investment Registration Certificate were eligible for transfer under the 2020 LOI.[11] The 2025 LOI significantly expands this scope.
Under the new provisions, all real estate projects that have been subject to an investment policy decision, investment policy approval, adjustment thereof, or that have been issued or amended with an Investment Registration Certificate are eligible for transfer in accordance with the 2025 LOI. This amendment removes a number of practical obstacles in project-based M&A transactions, especially for real estate projects undergoing investment restructuring.
Conclusion
The 2025 LOI marks a clear evolution in the State’s regulatory approach to investment activities, shifting the focus towards the management of core and sensitive issues while granting investors greater autonomy and flexibility. Nonetheless, the practical impact of the 2025 LOI will depend to a significant extent on the quality, timeliness and consistency of its implementation regulations (implementing decrees and guiding circulars), as well as on uniform application by competent authorities in the period ahead.
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[1] Article 7.2, the 2025 LOI.
[2] Article 24, the 2025 LOI.
[3] Articles 24.8, 24.11, the 2025 LOI.
[4] Article 25, the 2025 LOI.
[5] Article 19.2, the 2025 LOI.
[6] Article 22, the 2020 LOI.
[7] Article 28, the 2025 LOI.
[8] Article 33, the 2025 LOI.
[9] Article 42.3, the 2025 LOI.
[10] Article 51.7, the 2025 LOI.
[11] Article 41.1, the Law on Real Estate Business 2023.
