From dream to reality: Vietnam’s next chapter of investment liberalisation
From dream to reality: Vietnam’s next chapter of investment liberalisation
When we recently imagined Vietnam without investment certificates, we saw it as « science fiction », a dream of what could be possible if bureaucracy were replaced by transparency, and administrative control gave way to market discipline.
Six months later, Vietnam has not abolished its investment law, but it has taken an unmistakable step toward that imagined future. The Law on Investment 2025 (Law No. 143/2025/QH15) marks a key evolution of Vietnam’s investment framework. It does not erase the system, but it undeniably reshapes it. The dream is no longer fiction. It has begun to materialise.
- A structural shift: from gatekeeping to governance
The new Law on Investment 2025 represents a decisive shift away from pre‑entry control and toward post‑inspection regulatory administration.
Where the prior regime relied heavily on prior approvals, often involving multiple layers of licensing, appraisal, and waiting, the new law sharply reduces the number of conditional business lines, removing 38 sectors entirely and redesigning many others. This recalibration pushes Vietnam away from the traditional permission‑based model and closer to modern regulatory approaches used in OECD countries.
One of the most consequential practical effects is a reduction in the State’s gatekeeping role. Ministries and local authorities no longer serve as overarching arbiters of “who may enter the market.” Their function now tilts toward monitoring compliance, supervising risk, and ensuring transparent operational conduct. This is the same administrative realignment envisioned in our legal fiction but now grounded in statutory reality rather than theoretical imagination.
- Foreign investors: company first, project second
Perhaps the most anticipated change is Vietnam’s reversal of investment sequencing for foreign investors.
For the first time, foreign investors may: establish a wholly foreign‑owned company before obtaining an Investment Registration Certificate (IRC)[1].
This seemingly small procedural shift carries symbolic weight: it recognises the company as a legal entity first, and the investment project as an activity conducted by that entity—not the other way around.
While implementation details will be clarified in the forthcoming decree, the new model sends a powerful message of equal treatment, aligning foreign investor procedures more closely with those applied to Vietnamese enterprises. Although investors still cannot implement the project without an IRC or policy approval, the barrier to market entry becomes lower, earlier, and more predictable.
The vision of a “permission‑free” market remains aspirational, but the direction is unmistakably toward simplification.
- Greater clarity in policy approvals
In contrast with the previous law’s more open‑ended criteria for when an investment policy approval was required, the 2025 law provides an explicit list of 20 categories of projects subject to approval.[2] These include:
- sensitive land‑use conversions,
- major infrastructure works,
- regulated industries such as nuclear or aviation,
- projects requiring special mechanisms not provided under existing laws.
This change provides much‑needed predictability. The boundaries of State approval authority are now codified, reducing discretion and improving consistency across provinces.
- Special investment procedures: fast‑tracking the future
The new law expands and formalises the Special Investment Procedure, enabling eligible projects—especially in industrial parks, high‑tech zones, free trade zones, and digital technology clusters, to bypass several traditional approvals.
In practical terms, qualifying investors may replace:
- environmental impact assessments;
- construction permits;
- fire safety evaluations;
- technology appraisals
with statutory commitments and compliance undertakings.
- Duration extensions: certainty for long‑term capital
One of the most investor‑friendly reforms is the flexible and clearer mechanism for extending project duration. The new law expressly confirms:
→ Extensions may be granted multiple times,
→ within the statutory caps for each extension,
→ except for projects using outdated technologies or requiring uncompensated handover.
This fosters confidence, critical for large‑scale manufacturing, energy infrastructure, logistics hubs, technology parks, and high‑capital investments.
- Outward investment: a cleaner, leaner framework
Vietnamese investors venturing abroad will also benefit from simplification. The new law eliminates certain outward investment policy approvals previously required from the Prime Minister or National Assembly and narrows the types of projects requiring an Outward Investment Registration Certificate.
This not only streamlines administrative burden but strengthens Vietnam’s evolving position as a regional investor, not merely an investment recipient.
The imaginary Vietnam described in The Great Investment Liberation—a nation without investment approvals, where business procedures match those of the U.S., Japan, or Germany, remains a dream, but the Law on Investment 2025 shows that Vietnam’s policymakers are actively moving toward lower regulatory friction, clearer rules, and a more facilitative investment climate.
[1] Art 19.2. A foreign investor is entitled to establish an economic organization to execute an investment project before following the procedures for issuance or adjustment of an investment registration certificate and must satisfy the market access conditions applied to foreign investors upon following the procedures for establishing an economic organization.
[2] See Art. 24 of the Law on Investment 2025
// Etienne Laumonier / Pham Viet Anh
Disclaimer: This newsletter and its content are for informational purposes only and do not constitute legal advice. Readers should seek legal or professional advice before taking or refraining from any action.
