Foreign Legal Consultant Hanoi
"On 11 December 2025, during its 10th Session, the 15th National Assembly adopted the Law on Investment No. 143/2025/QH15."
On 11 December 2025, during its 10th Session, the 15th National Assembly adopted the Law on Investment No. 143/2025/QH15 (the “Law on Investment 2025” or “LOI 2025”). Subsequently, the Ministry of Finance (“MOF”) released a Draft Decree guiding implementation of the LOI 2025 (“Draft Decree”) for public consultation. Although subject to further revision, the Draft Decree both inherits and refines investment procedures that have been applied stably, while also providing more detailed guidance on the new regulations introduced under the LOI 2025. For purposes of this article, reference is made to the Third Draft (dated 12 February 2026) of the Draft Decree.
EXECUTIVE OVERVIEW OF KEY REFORMS
The LOI 2025 marks a significant recalibration of Vietnam’s investment regime, introducing several key reforms, including:
- a new optional licensing sequence for foreign investors, allowing enterprise incorporation prior to the issuance of an Investment Registration Certificate;
- restructuring of the investment policy approval regime, including consolidation of approval-triggering projects and further decentralisation of approval authority to provincial levels;
- expansion of the Special Investment Procedure, providing a fast-track licensing pathway for eligible projects located in designated investment zones;
- streamlining of conditional business lines together with the introduction of a differentiated regulatory approach combining licensing and disclosure-based supervision; and
- greater flexibility in project term adjustments, potentially facilitating restructuring and M&A activities.
For foreign investors, these reforms provide enhanced structuring flexibility and greater agility in market entry and project implementation. At the same time, they require careful early-stage regulatory planning, technology and compliance assessment, as well as strategic sequencing of licensing procedures.
The key regulatory changes introduced under the LOI 2025 are discussed in detail below.
Licensing Sequence Reversed Option: ERC Before IRC
Article 19 of the LOI 2025 introduces a significant procedural option for foreign investors. Under the previous regime, foreign investors were required to obtain an Investment Registration Certificate (“IRC”) before incorporating a project company and receiving its Enterprise Registration Certificate (“ERC”). However, under the LOI 2025, foreign investors that satisfy market‑access conditions can instead obtain the ERC first and then apply for issuance or amendment of the IRC.
With respect to the application dossier for the establishment of an economic organisation under this mechanism, the Draft Decree introduces an additional requirement whereby the ERC application must include an undertaking confirmation that the foreign investor satisfies the applicable market access conditions in accordance with relevant regulations.
Notably, the Draft Decree also introduces an important safeguard by imposing a twelve-month deadline within which a foreign investor that has established an economic organisation must complete the procedures for obtaining an IRC. The Draft Decree further provides that amendments to the ERC contents for the purpose of adding additional business lines shall only be permitted after the IRC has been duly issued.
Key contacts
"The Draft Decree introduces an additional requirement whereby the ERC application must include an undertaking confirmation that the foreign investor satisfies the applicable market access conditions in accordance with relevant regulations."
Practical implications include:
- the Draft Decree requires foreign investors to complete IRC procedures within 12 months of ERC issuance but does not specify the consequences of failing to do so, creating regulatory uncertainty for both investors and licensing authorities. Notably, it is unclear whether the ERC would remain valid, whether the enterprise might be required to dissolve, or whether authorities could revoke the ERC at their discretion. This lack of clarity also complicates related corporate arrangements, such as shareholder agreements, capital contribution schedules, financing and operational contracts, and may lead to inconsistent enforcement approaches by local authorities. As a result, this gap introduces a material compliance risk that investors should factor into when structuring their investment;
- contracts entered between ERC issuance and IRC approval should incorporate conditions precedent and termination safeguards to mitigate regulatory risk; and
- the possibility of parallel ERC and IRC filings may increase administrative workload and licensing bottlenecks during implementation.
Investment Policy Approval (“IPA”): Consolidation and Decentralisation
Consolidated Categories
The LOI 2025 consolidates all IPA‑triggering projects into a list of 20 categories, replacing the previous structure under the 2020 law. The revised list incorporates new categories that include projects involving state allocation of maritime areas and also clarifies exemptions. The framework increases clarity and may capture a broader range of land‑intensive or infrastructure‑scale projects.
For projects that require both an IPA and an IRC, the IRC must be issued on the basis of, and in alignment with, the contents of the IPA. Accordingly, the IPA must be obtained before the application for the IRC can be submitted.
Redistribution of Authority
Authorities that grant the IPA include:
- the National Assembly: limited to projects requiring special mechanisms;
- the Prime Minister: eight specified categories and multi‑provincial projects; and
- Provincial People’s Committee Chairpersons: thirteen categories.
This reflects a deliberate policy shift toward decentralisation and administrative efficiency.
IPA Exemptions
Certain land‑using projects are exempted from obtaining IPA, including:
- projects by individual investors not requiring prior provincial land approval;
- construction of industrial‑cluster infrastructure;
- mineral‑extraction projects following mining‑rights auctions or for emergency mobilisation; and
- certain other government‑designated exemptions.
A separate exemption pathway applies under the Special Investment Procedure (“SIP”).
Special Investment Procedure: Targeted Fast‑Track Mechanism
The LOI 2025 further develops the SIP as an expedited licensing mechanism for investment projects implemented in industrial parks, export-processing zones, high-tech parks, concentrated digital-technology zones, free-trade zones, international financial centres and functional areas of economic zones, apart from projects requiring investment policy approval as prescribed by the government. In contrast to the previous framework, eligibility is no longer confined to specifically designated sectors or industries, thereby allowing the SIP to be applied more flexibly based primarily on project location.
Qualifying projects may bypass several major licensing procedures, such as IPA, technology appraisal, preliminary EIA, detailed planning, construction permitting and other procedures to obtain approval and authorisation in the fields of construction, fire-prevention and firefighting, then transitioning to a commitment‑based post‑check model. Investors must provide written undertakings on full compliance with relevant conditions, standards and technical regulations as prescribed under the laws on construction, environmental protection and fire prevention and fighting; violations may result in sanctions, suspension or termination.
In addition, the Draft Decree clarifies that SIP does not apply to sensitive or large‑impact projects implemented within economic zones or free trade zones, including those involving cultural‑heritage protection zones, nuclear power, housing or urban‑area developments, projects in restricted‑development or historic inner‑city areas, golf courses, industrial‑zone infrastructure, new seaports or airports, commercial air‑passenger transport, oil and gas processing and other projects under special mechanisms.
This reflects a targeted exclusion of particular project types, rather than a general exclusion of all projects that fall under Article 24 IPA requirements of the LOI 2025.
Should the Draft Decree be promulgated in its current form, energy projects that are not excluded from the SIP mechanism may, when located within the eligible zones, elect to pursue the SIP pathway. This would include LNG‑to‑power facilities, rooftop solar installations and battery storage systems but would exclude nuclear power.
Conditional Business Lines: Targeted Rationalisation
The LOI 2025 reduces Appendix IV from 227 conditional business lines to 198, removing certain service‑oriented activities such as tax procedures, customs brokerage, insurance auxiliary services, commercial inspection and labour subleasing. Electronic cigarettes and heated tobacco products are added to the list of prohibited business lines.
"The LOI 2025 reduces Appendix IV from 227 conditional business lines to 198, removing certain service‑oriented activities such as tax procedures, customs brokerage, insurance auxiliary services, commercial inspection and labour subleasing."
A two‑track regulatory model is newly introduced for conditional business lines:
- ex‑ante licensing (e.g. banking, insurance); and
- disclosure‑based, ex‑post supervision, allowing enterprises to declare compliance and operate subject to periodic inspection.
Project Lifecycle Flexibility and Sustainability Controls
Narrowed IPA Adjustment Requirements
The LOI 2025 narrows the circumstances in which an investment project is required to undergo adjustment of its IPA by removing two previously applicable triggers, namely: (i) a change in total investment capital of 20% or more; and (ii) changes to technology previously appraised during IPA. In addition, the timeline trigger for project‑implementation extension has been relaxed: an IPA adjustment is now required only where the extension exceeds 24 months, instead of the previous threshold of 12 months.
Flexible Project‑Term Adjustments
While general project‑term limits (50 years; 70 years in economic zones) remain unchanged, the LOI 2025 clarifies that investors may adjust the operating term of an investment project – whether by extension or reduction – at any stage of its implementation. This enhanced flexibility facilitates project restructuring and may contribute to improved liquidity in the secondary investment market.
Transitional Provisions and Effective Dates
Effective Timeline
The LOI 2025 shall take effect on 1 March 2026, with the exception of Article 7 and Appendix IV about conditional business lines, which will take effect on 1 July 2026. The LOI 2020 is repealed from 1 March 2026, although its conditional‑sector list remains valid until 1 July 2026.
Grandfathering
Existing projects that have obtained licences, IRCs, IPAs and auction or bidding determinations remain valid. Re‑approval is not required unless the investor seeks adjustments triggering IPA. Transitional rules also address transfer of legacy sub‑projects, and preservation of previous favourable market‑access conditions.
With respect to investment‑performance deposits, projects implemented or approved prior to 1 July 2015 are exempt from the deposit or bank‑guarantee requirement, even if such projects would otherwise fall within the scope of mandatory guarantee for execution under LOI 2025. However, if the investor subsequently adjusts the project’s objectives, implementation schedule, or land‑use purpose after the law takes effect, the project becomes subject to the LOI 2025 deposit requirements.
Hanoi Intern Lan Hoang also contributed to this article.
Key contacts
Foreign Legal Consultant Hanoi
Partner Hanoi
Counsel Hanoi
Senior Associate Hanoi
