The 2025 Law on Investment, effective from March 1, 2026, marks a significant adjustment in Vietnam’s policy framework for attracting foreign capital. Rather than being merely technical amendments, the new law directly impacts how foreign investors enter the market, structure investment projects, and plan long-term strategies. For investors considering entering the Vietnamese market or currently operating projects in Vietnam, the following changes may directly influence investment plans.

Changes to Investment Procedures: Greater Flexibility for Foreign Investors

One of the most notable changes under the 2025 Law on Investment is the adjustment of the investment procedure sequence. Under the new regulations, foreign investors may establish an enterprise prior to obtaining an Investment Registration Certificate (IRC) in certain cases.

This change carries significant practical implications for foreign investors doing business in Vietnam. Instead of completing the entire investment approval process before establishing a legal entity, investors can now set up a company earlier to open bank accounts, sign preliminary agreements, or conduct market preparation activities. This helps shorten market entry time and allows investors greater flexibility during the early stage of project implementation.

Improvement of the Regulato ry Framework for Conditional Business Lines

The 2025 Law on Investment (No. 143/2025/QH15) significantly reduces the list of conditional business lines set out in Appendix IV of the law. This represents one of the most important reforms aimed at reducing administrative burdens, promoting freedom of business, and improving the investment environment.

Accordingly, the 2025 law removes 38 conditional business lines and amends 20 others, representing a considerable reduction compared to the 2020 Law on Investment, which included 227 conditional business sectors.

Notable sectors affected by these changes include: cosmetic surgery services, overseas study consulting services, architectural services, construction activities conducted by foreign contractors, and multimodal transport services, among others.

Extension of Project Duration to 70 Years in More Cases

The 2025 Law on Investment maintains the maximum project duration of 50 years for ordinary investment projects and 70 years for projects located in economic zones. However, a key change is that the scope of projects eligible for the 70-year investment term has been expanded.

Specifically, the extended duration may apply to projects implemented in areas with difficult or extremely difficult socio-economic conditions, projects with large investment capital and slow capital recovery, and projects involving the development and operation of infrastructure for high-tech zones, high-tech industrial parks, or concentrated digital technology parks. The provision also applies to projects eligible for special investment incentives and support under Article 31 of the 2025 Law on Investment.

From an investor’s perspective, this change provides greater long-term stability and improved financial planning capability. For manufacturing, infrastructure, and technology projects with long payback periods, the possibility of a 70-year project term helps reduce investment recovery pressure and enhances the attractiveness of Vietnam as an investment destination.

Greater Decentralization – Faster Project Approval

Another significant development is the stronger decentralization of approval authority to local governments and industrial zone management authorities. Many projects that previously required approval from central authorities may now be decided at the provincial level.

According to Article 25 of the 2025 Law on Investment:

(i) The National Assembly decides on projects requiring special mechanisms or policies that differ from existing legal provisions.

(ii) The Prime Minister retains authority over projects related to national security, natural resources, large-scale population resettlement (20,000 people or more in mountainous areas and 50,000 or more in other areas), casinos, nuclear power plants, and certain sectors with foreign investment restrictions such as telecommunications infrastructure, afforestation, publishing, and press activities.

(iii) The Chairperson of the Provincial People’s Committee is granted broad authority over most remaining projects, including housing projects, urban development projects, projects located in restricted development or historic inner-city areas, golf courses, airports, seaports, and certain projects involving defense, security, or marine areas.

(iv) The Management Boards of industrial parks, export processing zones, high-tech parks, and economic zones may approve investment policies for projects within these zones, provided they are consistent with approved planning.

For foreign investors, this is not only a change in authority but also one that may significantly impact project timelines. The approval process is expected to become faster, with fewer administrative layers and more direct engagement with competent local authorities.

Protection of Investors’ Rights in Cases of Delay

The 2025 Law on Investment also expands the scope of protection for investors when projects are delayed due to objective reasons.

Time delays caused by force majeure events, prolonged administrative procedures, or actions by competent state authorities will not be counted toward the project’s operational term.

Compared to the 2020 Law on Investment, this provision has a broader scope and demonstrates a clearer policy orientation toward reducing legal risks for foreign investors. This is particularly important for large-scale projects where implementation timelines often depend on land approval, construction permits, and environmental licensing procedures.

The 2025 Law on Investment: Opportunity or Challenge?

Overall, the 2025 Law on Investment reflects Vietnam’s ongoing efforts to improve the investment environment in a more transparent, flexible, and internationally aligned manner. However, the implementation of these new provisions will require investors to review their legal structures, sectoral conditions, and project timelines.

Contact Asia Business Consulting today to receive in-depth advisory services and develop an optimal investment roadmap in compliance with the latest provisions of the 2025 Law on Investment.

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