Update: 18.05.2026
The Law on Investment 2025 introduces notable reforms to market entry, post-licensing supervision, special investment procedures and the digitalization of administrative processes for foreign investors.
As Vietnam enters a new era of dynamic development, with a strategic orientation towards rapid and sustainable growth grounded in innovation, economic restructuring and deeper international integration, foreign investment continues to serve as an important driver of economic growth.
On 11 December 2025, at the 10th Session of the 15th National Assembly, the Law on Investment No. 143/2025/QH15 was adopted. The law took effect on 1 March 2026 and replaced the Law on Investment 2020.
The new law was enacted amid intensified competition for foreign direct investment and Vietnam’s transition from attracting FDI “at all costs” to pursuing selective, high-quality investment associated with technology, advanced governance and sustainable development.
Part I
Legal Basis
- Law on Investment No. 61/2020/QH14 adopted by the National Assembly on 17 June 2020 (“LOI 2020”).
- Law on Investment No. 143/2025/QH15 adopted by the National Assembly on 11 December 2025 (“LOI 2025”).
- Draft No. 01 dated 13 January 2026 of the Decree detailing and guiding the implementation of certain provisions of the Law on Investment (“Draft Decree”).
Part II
New Policies on Foreign Investment into Vietnam
The LOI 2025 continues to recognize the principal forms of investment available to foreign investors in Vietnam, including:
- Establishment of an economic organization.
- Capital contribution or acquisition of shares or capital interests.
- Implementation of investment projects.
- Investment under contracts, particularly business cooperation contracts.
The retention of these investment forms reflects the intention to maintain stability within Vietnam’s investment legal framework. The key reforms focus primarily on simplifying procedures, processes and market access mechanisms.
1. Establishment of an Economic Organization before Obtaining an Investment Project
One of the most notable features of the LOI 2025 is that foreign investors may establish an economic organization to implement an investment project before completing the procedures for issuance or amendment of an Investment Registration Certificate.
Under the previous regime, foreign investors were required to obtain an Investment Registration Certificate (“IRC”) before completing enterprise registration procedures, which often prolonged market entry timelines.
The LOI 2025 now allows foreign investors to establish an enterprise first, provided that the applicable market access conditions are satisfied. The investment project itself may only commence after the IRC has been granted.
The LOI 2025 does not currently specify the deadline for completing the IRC application after the project-implementing economic organization has been established.
The Draft Decree proposes that the economic organization must complete the required investment procedures and obtain the IRC within six months from its establishment date. Failure to meet this deadline may require the organization to carry out dissolution procedures in accordance with applicable law.
Foreign investors should therefore monitor the official guiding decree and its effective date in order to arrange appropriate implementation plans.
2. Narrowing the Scope of Investment Policy Approval
The LOI 2025 continues to narrow the range of projects required to undergo investment policy approval procedures.
Such procedures are primarily retained for:
- Large-scale projects.
- Projects in sensitive sectors.
- Projects involving proposed land use.
- Projects with significant environmental impacts.
- Other specific cases prescribed by law.
This approach is expected to reduce the number of projects subject to lengthy pre-approval procedures.
3. Expansion of Projects Eligible for the “Green Channel” Mechanism
Special investment procedures, commonly referred to as the “green channel” mechanism, were previously introduced under Article 36a of the LOI 2020.
Projects registered under this mechanism are not required to complete certain procedures, including:
- Investment policy approval.
- Technology appraisal.
- Environmental impact assessment reports.
- Detailed planning.
- Construction permits.
- Certain approvals relating to construction and fire prevention and fighting.
Instead, investors are required to submit a written undertaking confirming compliance with applicable legal conditions, standards and technical regulations.
Previously, this mechanism applied only to selected science and technology projects located in industrial parks, export processing zones, high-tech parks, concentrated digital technology parks, free trade zones and functional zones within economic zones.
The expanded mechanism is expected to shorten procedural processing times and improve the competitiveness of Vietnam’s investment environment.
4. Changes to Conditional Business Lines and Sectors
The LOI 2025 authorizes the Government to publish and regulate investment and business conditions through two separate lists:
- Conditional business lines and sectors requiring licenses or certificates before investment and business activities may begin.
- Conditional business lines and sectors shifting from licensing and certification to disclosure of business requirements and conditions, subject to post-licensing supervision.
This distinction between pre-approval and ex post supervision is intended to simplify procedures, reduce market entry barriers and promote freedom of business.
The LOI 2025 also removes a number of activities from the list of conditional business lines, including:
- Tax procedure services.
- Customs procedure services.
- Employment services.
- Labor outsourcing services.
- Automobile warranty and maintenance services.
- Certain other business lines.
These changes are expected to reduce market entry barriers and encourage additional foreign investment into Vietnam.
5. The “One-Stop” Mechanism, Electronic Procedures and Their Impact on Foreign Investors
The LOI 2025 further strengthens the “one-stop” mechanism and the implementation of investment procedures through the National Investment Information System.
Procedures relating to project registration, project amendment and investors’ reporting obligations are integrated, thereby reducing paper-based documentation and fragmented handling by multiple authorities.
At the same time, the simplification of pre-approval procedures is accompanied by enhanced post-licensing supervision. Foreign investors must therefore place greater emphasis on legal compliance throughout the entire project implementation process.
Part III
Conclusion
The LOI 2025 demonstrates a clear effort to reform and simplify investment procedures applicable to foreign investors by reducing restrictions, revising market entry procedures, shifting from pre-approval to post-licensing supervision and increasing the digitalization of administrative procedures.
Nevertheless, the practical effectiveness of these reforms will depend significantly on their implementation and consistent application by the relevant authorities.
During the initial implementation period, foreign investors should approach the new regulations proactively yet cautiously and regularly monitor guiding and implementing regulations in order to ensure effective investment, legal compliance and the minimization of legal risks in Vietnam.
