The National Assembly of Vietnam adopted a new law (the Amended Investment Law) to amend and supplement several provisions in Investment Law 2020. Most provisions of the Amended Investment Law take effect from 1 January 2025, except certain cases will take effect from 1 July 2025. In this post, we discuss some notable points in this Amended Investment Law.

Special Investment Procedures

The key point in this Amended Investment Law is the introduction of a special investment procedure (Special Procedure) which allows the eligible investors in certain high-tech sectors to obtain the investment registration certificate (IRC) and implement its project in a shorter time and reduces procedures, including waiver of various approvals and procedures.

The project utilizing the Special Procedure are exempt from various standard approvals and procedures, including IPA, technology appraisal, environmental impact assessment report, detail planning, construction permit and other approvals and permits in construction, fire fighting and prevention. The issued IRC serves as document for land lease or conversion of land use purpose. However, before commencing construction, investors are obliged to submit a report on the project's economic-technical construction investment, along with the corresponding appraisal report, to the relevant Authority.

This Special Procedure prevails relevant regulations under other laws enacted before 15 January 2025 when there is any difference between the Special Procedure and such other laws. For projects having IPA or IRC before the effective date of Amended Investment Law and eligible for utilizing the Special Procedure, the investor of such project can choose to apply the Special Procedure. The Special Procedure is still subject to further guidance from the Government and Ministry of Planning and Investment.

Projects eligible for Special Procedure

An investment project can apply the Special Procedure if such project satisfies all the following criteria:

The project is subject to investment policy approval (IPA) but excluding projects requiring approval from the National Assembly;
The project is implemented within industrial zones, export processing zones, high tech zones, centralized information technology zones, free trade zones and function areas in economic ones; and
The project invests in the certain permitted investment sectors.

The permitted sectors include:

investment for building innovation centers, research and development (R&D) centers; investment in the semi-conductor integrated circuit industry, design and manufacture technology of components, integrated microcircuits (IC), flexible electronics (PE), chips, semiconductor materials; or
investment in the high-tech sectors prioritized for development, and manufacture of products listed as high-tech products encouraged for development as per the Prime Minister's decision.

Application and procedures for eligible projects

The investment application dossier for project utilizing Special Procedure resembles the standard dossier for IPA under Article 33 of Investment Law 2020. It typically includes the application and proposal for implementing project, demonstrating the investor's legal status and financial capacity, and documentation related to land use rights or the right to use the project location. The difference in application is that the investor utilizing the Special Procedure must provide commitment to fulfil conditions, criteria and standards in construction, environmental protection, fire fighting and prevention regulations. Furthermore, instead of the preliminary environmental impact assessment, the project proposal must include the identification and forecast of impact on environment and methods to minimize adverse impacts to the environment.

The application will be submitted to the management board of the industrial zones, export processing zones, high-tech zones and economic zones (Authority), and the Authority will issue the investment registration certificate (IRC) for the project within 15 days after receiving the application.

The foreign investor is allowed to establish a Vietnam subsidiary before applying for investment under the Special Procedure.

Authority to issue IPA

Authority to issue IPA of the following project changes from the Prime Minister to provincial People’s Committee: (1) investment projects for the construction and operation of infrastructure in industrial zones and export processing zones; and (2) new investment projects for the construction of ports and port areas with a total investment of less than 2,300 billion VND located in special ports.

Project suspension and termination

The Amended Investment Law adjusts provision regarding project suspension and adds new ground for project termination in relation to delay in project schedule, particularly:

Previously, project operations could be suspended if the investor fails to correctly implement the terms of the IPA or IRC and has been subjected to an administrative penalty but continues to violate such regulation. This old regulation covers the case where the investor fails to comply with schedule in IPA or IRC. The Amended Investment Law excludes such ground from project suspension regulation.
A new project termination event has been added to this Amended Investment Law. The relevant authority can terminate all or part of the project operation in case the investor fails to achieve the objectives mentioned in the IPA or IRC within 24 months following the expiry of the original schedule for these objectives specified in the IPA or IRC. This provision does not apply (a) if the project is eligible for extension of project timeline, and (b) to the case when land is resumed for the reason that land is not used or the land use is behind the schedule in accordance with the law on land. For projects having IPA or IRC before the effective date of Amended Investment Law and the expiry date of schedule for main objective prior to 15 January 2025, the 24-month period mentioned above will be counted from 15 January 2025.

Additional conditional sectors

The Amended Investment Law has added some new sectors to the list of industries and trades in which business investment is conditional, which will take effect from 1 July 2025 including:

import, temporary import for re-export, temporary export for re-import of unmanned aerial vehicles, other flying vehicles, aircraft engines, aircraft propellers, and equipment and devices of unmanned aerial vehicles and other flying vehicles;
business of unmanned aerial vehicles, other flying vehicles, aircraft engines, aircraft propellers, and equipment and devices of unmanned aerial vehicles and other flying vehicles;
research, manufacture, testing, repair, and maintenance of unmanned aerial vehicles, other flying vehicles, aircraft engines, aircraft propellers, and equipment and devices of unmanned aerial vehicles and other flying vehicles;
business of data intermediation products and services;
business of data analysis and aggregation products and services; and
business of data marketplace services.

This post is written by Le Minh Thuy and edited by Nguyen Quang Vu.

Vietnam Business Law