On 11 December 2025, the National Assembly adopted new investment law (Investment Law 2025). On this blog, we discuss some key changes in the new Investment Law 2025.

Clarification of business investment conditions

The Investment Law 2025 refines the definition of business investment conditions (Điều kiện đầu tư kinh doanh) by introducing an explicit exclusion: these conditions no longer encompass technical standards and regulations issued by competent authorities concerning product or service quality. This addition narrows the scope of what constitutes a "conditional business line", distinguishing administrative market-entry conditions from mere technical product standards.

Prevail of law on capital and special mechanism

Investment Law 2025 adds a regulation regarding the hierarchy of laws. In the event of a discrepancy between the Investment Law 2025 and the Law on the Capital (Luật Thủ đô) or specific National Assembly resolutions regarding the investment procedures and investment assurance, the latter will prevail. This amendment may validate the special mechanisms granted to Hanoi and other pilot programs.

Changes To Licensing Sequence For Greenfield Projects by Foreign Investors

The new Investment Law 2025 keeps the changes to licensing sequence for greenfield projects by foreign investors proposed in previous drafts. Accordingly, a foreign investor who wants to implement a green field investment project is allowed to set up a project company by obtaining an Enterprise Registration Certificate (ERC) first and then obtaining an Investment Registration Certificate (IRC). Under the current law, the order is reversed. The foreign investor must obtain an IRC for the investment project first and then set up the project company. The change to the licensing sequence is presumably intended to be a positive change by allowing a foreign investor to have a commercial presence in Vietnam even before it has an investment project. However, this change raises several questions:

What are the rights and obligations of the project company pending the issuance of the IRC? Can the project company conduct business activities without the IRC? If so what is the purpose of the IRC?
If the application for the IRC is later rejected, then will the foreign investor be required to liquidate the project company? In other words, will all foreign investors be prepared to incur costs and time for maintaining a commercial presence in Vietnam without certainty that its primary business activities will be authorized?

We will need to wait for further guidance of the Government on this new change. In practice, many foreign investors have avoided the need for obtaining an IRC by acquiring an existing Vietnamese company and obtaining an “M&A Approval” instead. While this change introduces serious new uncertainties for investors pursuing greenfield projects, its overall impact could be muted, as it may simply push more investors to favor the M&A route to avoid these very risks.

Delegation and Increased Flexibility for the Government

The Investment Law 2025 removes many detailed regulations on investment conditions and procedures, which will instead be promulgated by the Government. While this approach is intended to grant the Government greater flexibility, it may reduce long-term legal predictability for investors, as key regulations could be altered through government decrees rather than the more stable legislative process. The Government will promulgate many matters including methods for contributing capital and purchasing shares/capital contribution by an economic organization, procedures to apply for investment policy approval, and application for offshore investment registration certificate and implementation of offshore investment, project transfer, rate of deposit to secure project implementation, etc.

Significant changes regarding IPA

· The new Investment Law 2025 introduces a significant change for super projects (e.g., massive forest conversions over 500–1,000 hectares, or large-scale resettlement initiatives involving more than 20,000 people), as the National Assembly is stepping back from the approval process and handing that power directly to the Prime Minister. The National Assembly now focuses on projects requiring special mechanisms or policies.

· At the provincial level, the authority to approve investment policies has shifted from the collective Provincial People's Committee to the individual Chairman of the Provincial People's Committee. The Chairman is now personally empowered—and accountable—to approve major local projects which may accelerate local economic development.

· Investment Law 2025 introduces cases where IPA is not required, for example: projects by individuals not subject to provincial-level approval before decision on land lease or permission for change of land use purpose; construction of technical infrastructure for industrial clusters; certain mineral mining projects; golf project belonging to housing or urban construction projects where land is allocated or leased through an auction of land use rights or a bidding process to select investors.

· Projects requesting land allocation, leasing, or change of land use purpose in areas affecting national defence and security, requesting the State to allocate sea areas or located in restricted development areas or historic inner cities of special-class cities are now clearly included in the requirement of IPA.

· Investment Law 2025 limits the requirement for IPA for housing and urban projects to cases where the investor already has land use rights (via agreement or existing rights under housing and land law).

Broaden accessibility to special investment procedure

· The new Investment Law 2025 removes the detailed list of eligible project which can apply for the special investment procedure. Instead, it adopts a broader approach based on the location and exclusion criteria. Particularly, investors can choose the special investment procedure for projects located in industrial parks, export processing zones, high-tech zones, concentrated digital technology zones, free trade zones, international financial centres, and functional areas within economic zones, except for projects that require IPA as prescribed by the Government.

· Investors must now include commitments or proposals regarding the use of restricted transfer technologies (if any) in their registration documents.

· Investment Law 2025 adds a legal basis for land allocation for projects using the special investment procedure. The IRC is now explicitly stated as the basis for the State to "allocate land" (giao đất) in addition to leasing land or changing land use purposes.

· Certain regulations under the old Investment Law 2020 are removed from the Investment Law 2025 and are likely to be further guided by Government. For example, a detailed list of evaluation contents, provision regarding how to handle multiple investors applying for the same location (granting to the first valid applicant), 15-day limit for issuing the investment registration certificate, etc.

New basis for project termination by authority

The Investment Law 2025 add a significant administrative enforcement power allowing the authority to terminate an investment project, either in whole or in part, if the implementing economic organization has been dissolved without properly liquidating the project or transferring its ownership rights. This provision serves as an administrative cleanup mechanism, preventing "ghost" projects from indefinitely occupying land or resources after the underlying entity has ceased to exist legally. However, this regulation lacks the grace period between the entity’s dissolution and the authority’s right to enforce termination, and explicit safeguards for the investor's rights over the remaining invested capital and assets during such compulsory termination.

Key changes relating to offshore investment

· The procedures for IPA by the National Assembly and the Prime Minister under Investment Law 2020 are significantly simplified by a direct certification process under the authority of MOF. For large-scale offshore investment projects or projects requesting for special support policy (excluding the exempted projects), MOF will report to and obtain opinion of the Government before issuance of the offshore investment registration certificate

· Investors with small-scale projects (under the government-specified capital threshold) and not in conditional sectors (i.e., banking, insurance, securities, press, radio and television, and real estate business) are no longer required to obtain an offshore investment registration certificate. The exemption also applies to defence and security projects, as well as specific state-owned enterprise projects. For these exempted projects, only foreign exchange transaction registration with the State Bank of Vietnam would be required.

· Under the New Investment Law 2025, investors are now required to submit activity reports for offshore investment every 6 months to the MOF, replacing the previous requirement of quarterly reporting.

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

Vietnam Business Law