[Vietnam] Key Updates of the Draft Law on Investment 2025

Sally Nguyen

On November 11, 2025, the Minister of Finance presented the third draft of the Law on Investment 2025 (“Draft LOI 2025”) to the National Assembly for review and discussion. The Draft LOI 2025 is scheduled to take effect on July 1, 2026, superseding the current Law on Investment 2020 (“LOI 2020”). The Draft LOI 2025 has been prepared in the direction of simplifying procedures and strengthening decentralization and delegation of authority in investment policies approval processes.

1. Narrow the scope of projects subject to in-principal approval

   Under the Draft LOI 2025, only infrastructure development investment projects in certain important and sensitive sectors will require in-principal approval. These include: (1) seaport, airport, telecommunications, publishing, and press projects; (2) projects involving proposed use of land or maritime areas; and (3) projects that impact the environment or are implemented in areas affecting national security and defense.

   The Draft LOI 2025 further provides that in-principal approval will not be required for commercial housing projects or urban development projects where investors are selected through auction for bidding procedures; projects that have won mineral exploitation rights through auction; technical infrastructure projects of industrial clusters; and investment projects falling under cases where land allocation or land lease is conducted through land use rights auction or investor selection bidding - except for major projects with significant socio-economic impact such as airports, seaports, and industrial zones.

   The authority to grant in-principal approval is delegated and decentralized to the Prime Minister and the Chairpersons of provincial People’s Committees for important projects requiring special mechanisms and policies that deviate from the provisions of laws, ordinances, resolutions of the National Assembly, and other state authorities. In addition, certain appraisal items considered unnecessary have been removed at the in-principal approval stage.

2. Fundamentally reform of investment procedures for foreign investors

   The Draft LOI 2025 introduces a significant shift in the licensing procedures for foreign investors by reversing the current order of procedures. Under the new approach, foreign investors will first apply for the issuance of enterprise registration certificate (ERC) and subsequently apply for the issuance of the investment registration certificate (IRC). The reform is intended to align the procedural sequence for foreign investors with that of domestic investors, thereby promoting equal treatment and reducing administrative hurdles. The change is also expected to facilitate and encourage greater foreign investment in Vietnam. 

3. Clarification of the concept of business investment conditions

   The Draft LOI 2025 further specifies that business investment conditions are requirements relating to capacity, professional qualifications, human resources, facilities, and management systems that individuals or organizations must satisfy. These conditions do not extend to technical regulations or standards issued by competent authorities concerning the quality of products or services.

   The Ministry of Finance has proposed abolishing 25 conditional business sectors. The list includes construction activities conducted by foreign contractors, investment project management consulting services, data center services, accounting services, tax procedures, rice export, employment services, labor leasing, and study-abroad consultancy. The proposal is based on the fact that certain sectors do not require pre-approval control (i.e., licensing before operation) and can instead be regulated through post-inspection mechanisms. This approach aims to lower barriers to market entry and strengthen freedom to conduct business of enterprises. This constitutes a notable reform, reflecting efforts to modernize regulatory policy, eliminate inappropriate restrictions, and promote a more competitive and flexible market environment. While the proposal marks a meaningful regulatory adjustment, its practical effect will depend on how the relevant laws and implementing regulations are amended and how consistently post-inspection mechanisms are applied in practice.

Final Thoughts

The Draft LOI 2025 reflects an ongoing effort to streamline procedures and further improve the legal framework governing investment activities. While the proposed amendments are generally viewed as positive, their practical impact will depend on the quality of implementing regulations and the consistency of endorsement across governmental levels.  TWL Law Group will continue to keep you informed of relevant developments as the draft law is adopted and approaches its effective date.