Vietnam’s new administrative organisation: a “great leap forward”
In a move towards administrative efficiency and modernisation, Vietnam is restructuring its government and provincial organisations simultaneously. These changes, recently approved by the National Assembly and immediately set in motion, aim to streamline operations and enhance governance.
- Under the new resolution, the Vietnamese government now comprises 14 ministries and three ministerial-level agencies. This reorganisation aims to reduce redundancies and improve the effectiveness of government operations. This new structure officially came into effect on 1 March 2025.
- By reducing the number of administrative units at the provincial level, the government aims to enhance its ability to address the needs of its citizens promptly and effectively.
Key changes in the government structure
- Before 1 March 2025
The Vietnamese government consisted of 18 ministries and four ministerial-level agencies. This structure was established under Resolution No. 08/2021/QH15, approved by the National Assembly in 2021. These ministries and agencies included:
Ministries:
- The Ministry of National Defence
- The Ministry of Public Security
- The Ministry of Foreign Affairs
- The Ministry of Justice
- The Ministry of Finance
- The Ministry of Planning and Investment
- The Ministry of Industry and Trade
- The Ministry of Agriculture and Rural Development
- The Ministry of Transport
- The Ministry of Construction
- The Ministry of Natural Resources and Environment
- The Ministry of Information and Communications
- The Ministry of Labour, Invalids, and Social Affairs
- The Ministry of Culture, Sports, and Tourism
- The Ministry of Science and Technology
- The Ministry of Education and Training
- The Ministry of Health
- The Ministry of Home Affairs
Ministerial-Level Agencies:
- The Government Inspectorate
- The Committee for Ethnic Minority Affairs
- The State Bank of Vietnam
- The Government Office
- After 1 March 2025
Following a new resolution approved by the National Assembly on 18 February 2025, the number of ministries has been reduced from 18 to 14. Meanwhile, the number of ministerial-level agencies has fallen from four to three. This new structure aims to reduce redundancies and improve the effectiveness of government operations.
After 1 March 2025, ministries and ministerial-level agencies include:
Ministries:
- The Ministry of National Defence
- The Ministry of Public Security
- The Ministry of Foreign Affairs
- The Ministry of Home Affairs (incorporating the Ministry of Labour, Invalids, and Social Affairs)[1]
- The Ministry of Justice
- The Ministry of Finance (merging the former Ministry of Finance and Ministry of Planning and Investment)[2]
- The Ministry of Construction (incorporating the former Ministry of Transport)[3]
- The Ministry of Industry and Trade
- The Ministry of Science and Technologies (containing the former Ministry of Information and Communications)[4]
- The Ministry of Education and Training
- The Ministry of Culture, Sports, and Tourism
- The Ministry of Agriculture and Environment (merging the Ministry of Agriculture and Rural Development and the Ministry of Natural Resources and Environment)[5]
- The Ministry of Health
- The Ministry of Ethnic and Religious Affairs (newly created)[6]
Ministerial-Level Agencies:
- The Government Inspectorate
- The State Bank of Vietnam
- The Government Office
- Objectives of the reorganisation
The primary objective is to create a more efficient and responsive government. This change is also expected to foster a more conducive administration and improve efficiency, creating a better environment for economic development. However, while the reorganisation presents many potential benefits, it is not without challenges. Transitioning to a new administrative structure may face resistance from those accustomed to the existing system. Additionally, implementation will require significant resources and coordination to ensure a smooth transition. There is also the risk of temporary disruptions in government services during the transition period, which could impact the delivery of certain services to citizens and investors.
- Stakeholder perspective: Merging the Ministry of Planning and Investment (MPI) with the Ministry of Finance (MOF): a foreign investor’s view
The merger of the Ministry of Planning and Investment (MPI) with the Ministry of Finance (MOF) aims to streamline economic planning and financial management. However, it also poses significant challenges and risks. One major concern is the potential for leakage and inefficiencies between the two previously separate administrations. The MPI, responsible for approving investments via provincial Departments of Planning and Investment, and the MOF, in charge of the state budget and tax administration, have distinct functions and workflows.
Integrating these functions requires meticulous coordination to avoid overlaps and ensure cohesive policy implementation. There is a risk of miscommunication and data mismanagement during the transition, which could lead to delays in investment approvals and budget allocations. Meanwhile, stakeholders – such as foreign investors – may face uncertainties during the integration, affecting their confidence in the regulatory environment. The merger of MPI and MOF is a double-edged sword. While it promises greater efficiency, the transition could disrupt existing processes and create uncertainties for investors. It is crucial that the government establish clear protocols and maintain transparency to minimise these risks and ensure administrative continuity.
Key features of the provincial reorganisation
At the same time, the government has unveiled an ambitious plan to restructure its provincial-level administration. This initiative aims to reduce the number of provinces and cities from the current 63 to around 34. This consolidation is expected to cut down on bureaucratic redundancies and improve resource allocation, bringing governance closer to the people.
- Two-tier provincial administration:
Vietnam is set to transition from its current provincial administrative system, which predominantly operates at the provincial, district, and commune levels, to a streamlined two-tier provincial structure comprising provincial and commune levels. This reorganisation marks a significant shift in governance by prioritising the commune-level administration as the foundation of the government system. The future system aims to delegate greater authority to the local level.
The streamlined model is expected to enhance responsiveness to citizen and business needs, fostering a dynamic and inclusive administrative framework compared to the more segmented approach of the present system.
The Ministry of the Interior will play a pivotal role in preparing the restructuring plans of provincial administrative units. These will be submitted to the National Assembly by 30 May 2025, with approval expected by 20 June 2025. Concurrently, the government mandated relevant ministries and agencies to issue the necessary legal, policy, and procedural guidelines. Provincial People’s Committees are tasked with drafting their restructuring plans by 1 May 2025, ensuring alignment with this timeline.
Vietnam’s provincial reorganisation represents a bold step towards modernisation and improved governance. By embracing this change, the country is not only addressing current inefficiencies but also laying the groundwork for a more dynamic and responsive administrative system. The success of this initiative will depend on the government’s ability to navigate the challenges of implementation while maintaining transparency and stakeholder engagement.
While the provincial reorganisation holds great promise, it also presents significant challenges. The transition will require careful planning and coordination to minimise disruption.
- A “super-metropolis” in Vietnam?
The proposed merger of Ho Chi Minh City with neighbouring provinces like Binh Duong, Dong Nai, and Ba Ria-Vung Tau presents a significant opportunity to create a “super-metropolis” in Vietnam.
Ho Chi Minh City is already Vietnam’s economic hub. Merging with industrial powerhouses like Binh Duong and Dong Nai could amplify its economic potential. In particular, this integration would foster the country’s industrial, maritime, and digital economies.
Combining resources and infrastructure across these regions could lead to better urban planning, improved transportation networks, and enhanced connectivity, benefiting residents and businesses alike. The merger would create a larger administrative unit with a combined population of over 13 million and a vast area, making it a significant player not just nationally but regionally.
Conclusion
We see this on-going reorganisation at government and provincial levels as a positive step towards improving the business environment. A more responsive and efficient government can significantly improve the ease of doing business in Vietnam.
However, resistance from stakeholders accustomed to the existing system may pose hurdles. Moreover, the financial and logistical demands of implementing such a large-scale reform cannot be underestimated.
It is essential for the government to ensure continuity and stability during the transition to maintain investors’ confidence in a context of international tensions.
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[1] This will handle the current functions of the Ministry of Home Affairs and assume responsibilities related to labour, wages, employment, people with meritorious services, occupational safety and hygiene, social insurance, and gender equality from the Ministry of Labour, Invalids, and Social Affairs.
Additionally, vocational education management will be transferred from the Ministry of Labour, Invalids, and Social Affairs to the Ministry of Education and Training.
Furthermore, responsibilities for social protection, child welfare, and social evils prevention (except drug rehabilitation and post-rehabilitation management, which will be transferred to the Ministry of Public Security) will be transferred from the Ministry of Labour, Invalids, and Social Affairs to the Ministry of Health. Responsibility for poverty reduction will be shifted to the new Ministry of Agriculture and Environment.
[2] The new Ministry of Finance largely inherits the functions and responsibilities of the former ministry and those of the previous Ministry of Planning and Investment. It will also assume the organisational structure of Vietnam Social Security and take over the rights, obligations, and responsibilities of state ownership representation for 18 state-owned corporations and enterprises currently managed by the Committee for Management of State Capital at Enterprises.
[3] The new Ministry of Construction largely inherits the functions and responsibilities of both the former ministry and the previous Ministry of Transport. Additionally, the function of state management over driver licensing and road vehicle examinations will be transferred from the Ministry of Transport to the Ministry of Public Security.
[4] Responsibilities related to press and publishing management will be transferred from the Ministry of Information and Communications to the Ministry of Culture, Sports, and Tourism.
[5] The new Ministry of Agriculture and Environment is taking over the responsibilities of both the previous Ministry of Agriculture and Rural Development and the former Ministry of Natural Resources and Environment. It will also assume the state management function over poverty reduction from the Ministry of Labour, Invalids, and Social Affairs.
[6] This will be established by restructuring the current Committee for Ethnic Affairs, incorporating the state management function over religious affairs from the Ministry of Home Affairs, and refining its responsibilities in managing ethnic affairs
Disclamer: This article and its content are for information only and are not given as legal or professional advice. They do not necessarily reflect all relevant legal provision with respect to the subject matter. Readers should seek legal or professional advice before taking or refraining to take any action.
