Ho Chi Minh City, 10 November 2026
On 24 August 2026, the Law on Urban Development No. 18/2026/QH16 (the “UD Law”) was passed by the National Assembly and officially took effect on 1 October 2026. The UD Law establishes special mechanisms and policies to promote urban development, mobilize investment resources and enhance competitiveness, while prioritizing the attraction of investors to large-scale projects capable of driving socio-economic development.
To clarify the opportunities for foreign investors to participate in urban development projects in Vietnam, we have prepared a series of four articles on the new policies and legal mechanisms under the UD Law. In this edition of this Weekly Debrief, we focus on the selection of strategic investors and the preferential and support policies available to such investors for the development of special urban areas.
1. Strategic Investor Selection Mechanism
The UD Law establishes a mechanism for selecting strategic investors through a list of priority sectors for attracting such investors, covering a wide range of fields. In relation to the development of special urban areas, the projects eligible for attracting strategic investors can be broadly classified into nine main groups (1) as follows:
(i) high technology and innovation;
(ii) high-tech industries;
(iii) tourism, resorts and premium entertainment;
(iv) healthcare, elderly care, culture and sports;
(v) urban renovation and improvement of living environments;
(vi) development of key urban areas;
(vii) urban infrastructure and the environment;
(viii) infrastructure in free trade zones; and
(ix) services, commerce and special-zone development.
Depending on the sector and nature of each project, the Law prescribes different minimum investment capital thresholds, ranging from VND 800 billion to VND 75 trillion. For coastal reclamation urban development projects, investors must satisfy the criteria prescribed by the Government.
To be selected as a strategic investor for the development of special urban areas, a foreign investor must satisfy certain financial capacity requirements. Specifically, the investor’s contributed equity capital must account for at least 20% of the total investment capital for projects with a scale of less than VND 30 trillion, and at least 15% for projects with a scale of VND 30 trillion or more. Where multiple investors participate in a project, at least 01 (one) investor must contribute a minimum of 30% of the total investment capital, while each of the remaining investors must contribute at least 15% (2).
In addition to the financial capacity requirements, foreign investors participating in the above-mentioned projects must also provide written commitments regarding the training and development of human resources, compliance with relevant laws, particularly those concerning national defense and security, and environmental protection.
Based on the list of priority sectors, an investment project may be proposed by a foreign investor or a competent state authority in the form of either a business investment project or a PPP project. The competent authority will organize the selection of strategic investors in accordance with the procedures prescribed by law for the relevant project form.
2. Investment Incentives and Support Policies
To promote large-scale investment projects, the UD Law introduces specific investment incentives and support policies for strategic investors participating in key projects in special urban areas. Accordingly, competent authorities may apply the following special support measures:
- Project operating term: Projects with a total investment capital of VND 30 trillion or more may be granted an operating term of up to 70 years, except for commercial housing projects;
- Customs and tax procedures: Priority treatment may be considered for goods imported or exported in connection with projects implemented by strategic investors in the City;
- Human resources and infrastructure: Support may be provided for human resource development, social infrastructure, high technology, and research and development (“R&D”) activities;
- Specific authority over investment policies: The City People’s Council is vested with the authority to decide on additional investment incentives and support policies to meet the requirements for attracting strategic investment (3).
Accordingly, the UD Law not only provides financial incentives but also establishes a favorable investment environment for the development of special urban areas across various aspects. Notably, through the grant of specific authority, the competent authorities of the City is empowered to formulate and implement policies tailored to the characteristics and development needs of each project, thereby enhancing its flexibility and initiative in supporting strategic investors in implementing key projects.
Conclusion
By identifying priority projects, setting out eligibility requirements and providing corresponding investment incentives and support policies for strategic investors in special urban areas, the UD Law aims to attract private-sector resources into large-scale urban development projects. In the next part of Weekly Debrief, we will further examine the preferential and support mechanisms available to strategic investors in the development of special economic zones.
Footnote:
(1) Article 36.1 of UD Law.
(2) Article 36.2 (a), (b) and (c) of UD Law.
(3) Article 36.7 (d) of UD Law.
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