Issue of April 2026 – Important Changes under the Decree 96/2026/NĐ-CP Providing Detailed Regulations and Guidance for the Implementation of Certain Provisions of Law on Investment (Decree No. 96)

Dear Valued Clients,

In the context of increasingly intense competition to attract international investment capital, reform of investment licensing procedures has become a priority for many countries. The new regulations demonstrate Vietnam’s strong commitment to building a modern, transparent, and more investor-friendly investment environment. Changes such as permitting the establishment of an enterprise prior to the issuance of an Investment Registration Certificate, adjusting the authority responsible for approving investment policy decisions, and introducing special investment procedures provide clear evidence of this trend.

From a policy perspective, such reforms not only help shorten dossier processing times but also reflect innovation in state governance. This contributes to reducing compliance costs for enterprises while enhancing the country’s competitiveness in attracting high-quality capital, particularly in the fields of high technology, innovation, and sustainable development.

Within the scope of this article, we will summarize and analyze the key reform measures introduced under Decree No. 96, including breakthrough changes to the investment incentive regime and the criteria for determining incentive-eligible locations. The article focuses on clarifying matters such as the eligible beneficiaries and scope of investment incentives, as well as the procedures for implementing special investment processes aimed at optimizing project implementation timelines. In addition, we will examine the regulations governing adjustments to investment policy approvals and the reforms in investment licensing procedures. These updates are intended to provide enterprises with a comprehensive reference framework on the new legal landscape, thereby enabling them to proactively formulate effective investment strategies and properly manage compliance risks throughout the entire project lifecycle.

1. Investment incentives

1.1. Expansion of Eligible Beneficiaries and Scope of Investment Incentives

Decree No. 96 also establishes a revised list of sectors and trades eligible for investment incentives, incorporating a number of significant amendments.

With respect to sectors and trades entitled to special investment incentives, the technology category has been broadened to include high technology, strategic technology, information technology, supporting industries, and environmental industries, thereby increasing the total number to sixteen eligible sectors and trades. In addition, for the first time, projects falling within the list of nationally important works and sectoral key projects approved by the Prime Minister have been added to the category eligible for special investment incentives.

As for sectors and trades entitled to general investment incentives, a number of new fields have been introduced. In particular, the science and technology category has expanded to 23 sectors and trades, notably including the manufacture of products listed under the dual-use technology catalogue. The agricultural category has likewise been expanded to 13 sectors and trades, with the addition of activities relating to the production of pharmaceutical raw materials, plant protection products, and veterinary medicines.

In addition, the environmental protection and infrastructure sectors have been supplemented with new activities such as the construction and upgrading of wholesale markets, as well as the manufacture of environmental industrial equipment. Meanwhile, the culture, social affairs, sports, and healthcare sectors have undergone a reduction in the number of eligible categories, while introducing new contents relating to the training of human resources serving science and technology, innovation, and the national digital transformation agenda. These additions reflect the State’s policy direction of prioritizing projects that not only advance economic objectives but also satisfy requirements relating to national security and sustainable environmental protection.

1.2. Enhancement of the Special Investment Incentive Regime

In addition, pursuant to Article 21 of Decree No. 96, the special investment incentive mechanism has been specifically designed for projects characterized by large-scale capital investment, advanced technology, and the capacity to generate substantial spillover effects across the socio-economic landscape. Such incentives are divided into three categories of eligible projects, each subject to quantitative thresholds as follows:

• Group 1: Innovation Centers and Digital Infrastructure
  This group includes projects relating to innovation centers, big data centers, 5G infrastructure, and strategic technologies.
  Conditions: Total investment capital of at least VND 3,000 billion, with a minimum disbursement of VND 1,000 billion within 3 years.
• Group 2: Core Digital Technology and Strategic Electronic Components
  This group covers the manufacture of key digital technology products, semiconductor chips, and artificial intelligence (AI).
  Conditions: Total investment capital of at least VND 6,000 billion, with full disbursement of the entire investment amount (i.e., VND 6,000 billion) within 5 years.
• Group 3: Exceptionally Large-Scale Projects in Incentivized Sectors
  Applicable to both new investment projects and expansion projects operating in sectors entitled to special investment incentives.
  Conditions: Total investment capital of at least VND 30,000 billion, with a minimum disbursement of VND 10,000 billion within 3 years.

The prioritization of sectors such as semiconductor chips, artificial intelligence (AI), 5G infrastructure, and big data centers demonstrates a policy orientation toward promoting the digital economy and green economy, while keeping pace with global competitive trends. At the same time, the stringent requirements regarding investment capital and disbursement schedules not only help screen out projects lacking commercial feasibility, but also link entitlement to incentives with the investor’s actual implementation commitments.Through the attraction of large-scale projects, this policy is expected to create spillover effects across supply chains, technology transfer, and the development of high-quality human resources, thereby strengthening national competitiveness. Overall, these changes represent not merely technical amendments to investment legislation, but a strategic reform step toward building a transparent, competitive, and sustainability-oriented investment environment.

2. Investment Incentive Areas

One of the key amendments introduced by Decree No. 96 is a fundamental shift in the method of determining locations eligible for investment incentives. Instead of maintaining the former “closed-list” approach, whereby specific localities were expressly enumerated (as under Appendix III of Decree No. 31/2021/ND-CP), the new mechanism adopts a criteria-based system grounded in legal standards and actual socio-economic conditions. This change is not merely a legislative drafting technique; it also reflects a more flexible and adaptive regulatory mindset, capable of responding effectively to the ongoing restructuring of administrative units and disparities in development levels among different regions.

2.1. The Stability and Sustainability of the Criteria-Based

The replacement of a locality-based list with a criteria-based system makes the incentive regime more stable and predictable. In practice, where administrative boundaries are altered or localities are merged, previously enumerated lists often become outdated in a short period of time.

Pursuant to Article 22 of Decree No. 96, locations eligible for investment incentives are determined as follows:

• Areas with Extremely Difficult Socio-Economic Conditions: This includes communes classified as Area II or Area III within ethnic minority and mountainous regions, in accordance with decisions of the Prime Minister.
• Preservation of Incentives Following Administrative Restructuring: Commune-level administrative units that previously belonged to districts classified as areas with extremely difficult socio-economic conditions prior to administrative reorganization shall continue to enjoy the applicable incentive policies. This ensures continuity of the law and safeguards the legitimate interests of investors against changes in administrative structures.

Notably, Decree No. 96 also establishes the principle that, for newly established communes formed through the merger of multiple communes with differing classifications, the highest level of hardship classification shall apply. For example, where a new commune is formed from the merger of one commune located in a difficult area and another located in an area with extremely difficult socio-economic conditions, the newly formed commune shall be entitled to incentives applicable to the latter category. This approach reflects a clear policy objective of encouraging investment in disadvantaged regions while ensuring maximum legal certainty in implementation.

2.2. Expansion of Functional Economic Spaces

In addition, Clause 7 of Article 22 of Decree No. 96 standardizes incentive levels based on functional economic zones in order to create momentum for new growth poles, specifically as follows:

• Economic zones, high-tech zones, hi-tech agricultural zones, concentrated digital industrial zones, free trade zones, and international financial centers are entitled to incentive treatment equivalent to areas with extremely difficult socio-economic conditions.
• Industrial parks, industrial clusters, and export processing zones are entitled to incentive treatment equivalent to areas with difficult socio-economic conditions.

This tiered classification demonstrates the State’s policy direction: not only to support underdeveloped regions, but also to concentrate resources on areas capable of driving innovation, attracting substantial investment capital, and integrating into global value chains.

3. Reform of Investment Licensing Procedures

3.1. Establishment of an Enterprise Prior to Obtaining an Investment Registration Certificate

Pursuant to Article 19.2 of the Law on Investment 2025, a foreign investor may establish an economic organization to implement an investment project (i.e., obtain an Enterprise Registration Certificate) prior to carrying out the procedures for issuance of an Investment Registration Certificate, provided that the investor satisfies the market access conditions applicable to foreign investors as prescribed under Article 8 of the Law on Investment 2025 when undertaking the incorporation procedure. This constitutes an important new development of the Law on Investment 2025 as compared with the Law on Investment 2020, and is further detailed under Article 72 of Decree No. 96.

Where this mechanism is applied, the application dossier for issuance of the Enterprise Registration Certificate must include a commitment confirming compliance with the market access conditions applicable to foreign investors in accordance with law. At the same time, the investor is responsible for completing the procedures to obtain an Investment Registration Certificate for a project consistent with the registered business lines of the established economic organization within 12 months from the date of establishment of such organization. However, there remains no official guidance on the prescribed form or required contents of such market access commitment, nor has detailed guidance been issued regarding the legal consequences in the event that the investor fails to obtain the Investment Registration Certificate after the expiry of the 12- month period.

In addition, Article 72.4 of Decree No. 96 imposes an important limitation: the enterprise may only commence implementation of the investment project after the Investment Registration Certificate has been granted. This reflects a balance between facilitating investment and preserving the State’s supervisory authority over matters such as project objectives, market access conditions, land use, environmental compliance, and economic security.

It may therefore be observed that this regulation remains relatively new, and its practical application will continue to depend on further implementing guidance from the competent state authorities. We will continue to monitor relevant legal developments and provide timely updates as new regulations are issued.

3.2. Adjustment of Authority for Investment Policy Approval

Another notable amendment is the transfer of authority, for certain categories of projects, from the provincial People’s Committee to the Chairperson of the provincial People’s Committee. In substance, this represents an institutional reform in the organization and enforcement of law aimed at shortening the decision-making process.

Under Article 33 of Decree No. 31/2021/ND-CP, approval of investment policy fell within the authority of the provincial People’s Committee. However, Decree No. 96 now vests such authority directly in the Chairperson of the provincial People’s Committee. As a result, dossier processing may be expedited, waiting times may be significantly reduced, and personal accountability of the head of the authority is enhanced. From the perspective of public governance, this change is consistent with the broader trend of decentralization and delegation of powers accompanied by accountability obligations. Nevertheless, in order to ensure transparency, appropriate internal control mechanisms and public disclosure of approval criteria should be established to mitigate the risk of administrative discretion. Overall, Decree No. 96 marks an important reform in Vietnam’s investment policy through a more flexible approach, expanded incentives, and streamlined procedures, thereby enhancing the transparency and predictability of the legal environment. At the same time, the new regulations also entail stricter compliance requirements, particularly with respect to investment conditions and project implementation timelines. In light of the fact that certain provisions still require further guidance, enterprises are advised to proactively monitor regulatory developments, review their investment structures, and develop appropriate compliance strategies in order to maximize available incentives while minimizing legal risks.

As always, we hope you find this update useful and look forward to continuing to work with you in the near future.

Best regards,

ENT Law LLC