The Law on Investment No. 143/2025/QH15 effective from 01 March 2026 (the “Law on Investment 2025”) focuses on simplifying procedures to improve business environment and creating more favorable conditions for investors, which is considered a breakthrough step in the legal framework on investment, in line with changes in the business environment and the socio-economic development requirements of Vietnam. Key highlights of the new Law are as follows:
1. Adjustment of the list of conditional business lines in the direction of streamlining
The Law on Investment2025 has modified the scope of operation for 20 more conditional business lines and abolished 38 conditional business lines. Notably, the trading of electronic cigarettes and heated tobacco products would be prohibited from investing by 01 March 2026.[1]
In addition, the Law has removed certain business lines from the list of conditional business lines, such as construction activities of foreign contractors; data center services; temporary import and re-export of frozen food, goods subject to excise tax, and goods on the List of used goods, etc.[2] Essentially, the purpose of this change is to ensure consistency across the entire legal framework related to the above fields as these business lines have already been managed through corresponding legal frameworks or have been assessed as not posing any particular risks.
Notably, the Law on Investment 2025 has innovated the approach to managing conditional business lines by classifying them into two groups: (i) (i) one which requires obtaining a license or certificate before conducting business; and (ii) the other which is managed under a mechanism of public disclosure of business conditions fulfillment and post-inspection management.[3] This change not only marks the foundation for a modern, unified management system but also significantly reduces the compliance burden for certain business lines that previously required both “pre-inspection” and “post-inspection”.
It can be seen that the Law on Investment 2025 has partly lowered the barriers to market access for many investment activities, aiming to promote investment attraction, enhance business freedom, and better implement the orientation of building an integrated, transparent, and favorable investment environment.
2. Allowing for enterprise establishment before Investment Registration Certificate obtainment
The Law on Investment 2025 has established a more flexible mechanism for foreign investors in the procedures for establishing economic organizations, aiming to shorten the time required for foreign investors to enter the market, create a more transparent and attractive investment environment, and increase the competitiveness of Vietnam in the region while ensuring fair treatment between domestic and foreign investors. Accordingly, the new Law allows foreign investors to establish an economic organization without first having an investment project, provided that the market access conditions are still satisfied, in order to regulate sensitive sectors and areas.[4]
3. Clarification of the scope of projects subject to investment policy approval
The Law on Investment 2020 mainly determined the scope of projects based on the authority of each approving authority.[5] However, the Law on Investment 2025 has specifically listed 20 projects that must undergo the investment policy approval procedure.
Accordingly, projects subject to approval are mainly those in fields that have major impacts on natural resources, land, environment, population stability, national defense and security, culture; or projects involving foreign investors in sensitive sectors or related to strategic resources and important infrastructure (airports, seaports, telecommunications, etc.).[6]
The narrowing of the scope of projects requiring investment policy approval and the clearer delegation of approval authority mark a significant change with respect to the post-merger administrative system, and have considerably reduced legal obstacles in the process of implementing investment projects in Vietnam.
4. Streamlining cases requiring adjustment of investment
In order to simplify administrative procedures and create more favorable conditions for investors when conducting business investment activities in Vietnam, the Law on Investment 2025 has removed two cases in which the procedure for requesting investment policy adjustment must be carried out: (i) Changes in total investment capital of 20% or more, leading to changes in the scale of the investment project; and (ii) Changes in technology that have been appraised and given opinions during the investment policy approval process.[7]
5. Expansion of the eligibility for special investment procedures mechanism
Although the pioneering spirit of the special investment procedures mechanism is recognized, the scope of application of this mechanism in the Law on Investment 2020 was relatively limited.[8] Accordingly, the Law on Investment 2025 has expanded the scope of application of the special investment procedures mechanism to all investment projects in industrial parks, export-processing zones, high-tech zones, concentrated digital technology zones, free trade zones, international financial centers, and functional areas within the economic zones (except for a number of projects that must undergo investment policy approval as prescribed by the Government).[9]
6. Adjustment of the operating duration of investment projects in a more flexible direction
Although still retaining the regulations on the operating duration of investment projects not exceeding 50 years for projects outside economic zones, not exceeding 70 years for projects inside economic zones; Clause 4 Article 31 of Law on Investment 2025 has allowed investors to increase or reduce the operating duration of the investment project during the implementation process in a more flexible manner.
7. Streamlining procedures in outward investment activities
The Law on Investment 2025 has narrowed the scope of projects subject to the procedure for issuance of an Outward Investment Registration Certificate, specifically only applying to projects with an outward investment capital level as prescribed by the Government or projects in fields belonging to conditional outward investment business lines.[10]
At the same time, the Law only requires investors to carry out foreign exchange transaction registration procedures for projects with investment capital lower than the level prescribed by the Government and not belonging to conditional outward investment business lines; projects related to national defense and security; or projects of state-owned corporations and general companies.[11]
[1] Point l clause 1 Article 6 of Law on Investment 2025
[2] Appendix IV of Law on Investment 2025, Appendix IV of Law on Investment 2025
[3] Clause 1 Article 7 of Law on Investment 2025
[4] Clause 2 Article 19 of Law on Investment 2025
[5] Article 30, 31, 32 of Law on Investment 2025
[6] Article 24 of Law on Investment 2025
[7] Clause 3 Article 33 of Law on Investment 2025, clause 3 Article 41 of Law on Investment 2020
[8] Clause 8 Article 2 of Law No.57/2024/QH15, which has expired pursuant to clause 4 Article 51 of Law on Investment 2025
[9] Clause 1 Article 28 of Law on Investment 2025
[10] Clause 1 Article 42 of Law on Investment 2025
[11] Clause 3 Article 42 of Law on Investment 2025
