The Great Investment Liberation – A Vietnamese legal fiction
Vietnam’s New Era Without the Investment Law
June 2026 – Vietnam takes a bold leap forward by abolishing the Law on Investment, transforming its economic landscape overnight. For decades, businesses struggled with bureaucratic hurdles, stagnant approvals, and investment bottlenecks. Now, with this legal burden lifted, the country embraces a market-driven, permission-free investment environment.
The Immediate Aftermath Without the requirement for investment approval, investors simply comply with existing laws and register businesses like in the United States, Japan, and Germany. Entrepreneurs, once entangled in approval layer, now face a simplified regulatory process focused solely on operational licenses, tax compliance, and environmental protection.
Within weeks of the law’s abolition, over billions worth of stalled projects begin construction. Industrial parks expand at unprecedented rates, garment factories secure land without waiting years, and high-tech zones attract foreign investors with streamlined procedures.
The Transformation of Government Oversight Vietnam’s provincial governments, previously caught in excessive red tape, shift from gatekeeping approvals to enforcing compliance. The administration focuses on project delivery rather than controlling market entry.
To prevent loopholes, new sector-specific frameworks emerge:
- Environmental agencies tighten pollution regulations without slowing investment.
- Financial authorities ensure transparency in foreign direct investment (FDI) without burdening firms.
- New operational licenses applications develop.
Private sector booms with institutional barriers removed, Vietnam witnesses an explosion of private sector activity:
- Foreign investors flood the market, bringing in high-tech manufacturing and pharmaceutical innovation.
- Startups launch effortlessly, bypassing lengthy approval chains that previously stalled business creation.
- Local enterprises flourish, as businesses gain the ability to expand without excessive licensing demands.
Vietnam’s economy enters an era of unparalleled dynamism, setting a new ASEAN benchmark for investment efficiency.
Returning to Reality: Vietnam’s Current Economic Landscape and Potential Gains
Vietnam’s economic trajectory has been remarkably resilient, with GDP growth projected at 6.8% in 2025. The country has successfully recovered from global trade disruptions, maintaining strong export performance and attracting foreign direct investment (FDI). However, challenges remain, including global economic uncertainties, financial sector risks, and infrastructure gaps.
The potential abolition of the Law on Investment in Vietnam which is currently being considered would mark a significant shift, comparable to the passing of the unified Law on Enterprise and Law on Investment in 2005.
The 2005 reform was a milestone in Vietnam’s economic liberalization, creating a single legal framework for both domestic and foreign enterprises, streamlining business registration, and enhancing investor confidence. It was a critical step in Vietnam’s WTO accession, signalling commitment to market-oriented reforms.
However, while the 2005 laws simplified procedures, they still maintained regulatory oversight to ensure economic stability. In contrast, abolishing the Law on Investment entirely would remove approval requirements altogether, potentially accelerating investment flows but also raising concerns about unchecked market entry, monopolization risks, and regulatory gaps. The key difference lies in balance—the 2005 reform harmonized regulations, whereas a full abolition would shift Vietnam toward a more laissez-faire investment model, requiring stronger sector-specific governance to mitigate risks.
Source: A call to scrap Vietnam’s tangled investment approval system
Disclaimer: 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.
