Issue of March 2026 – Important new points of the Investment law 2025

Dear Valued Clients,

On 11 December 2025, the National Assembly passed Law No. 143/2025/QH15 on Investment (the “Investment Law 2025”), which will take effect from 01 March 2026. This Law comprehensively replaces the Investment Law No. 61/2020/QH14 (the “Investment Law 2020”) and continues to improve the legal framework governing investment activities in Vietnam in the following directions:

• Simplification of administrative procedures;
• Enhancement of decentralization;
• Greater transparency of investment conditions;
• Promotion of digital transformation in investment management.

In particular, the new Law was enacted in the context of the orientation to develop financial centers in Ho Chi Minh City and Da Nang, together with the requirement to enhance international competitiveness. Below are the key changes that investors should take note of:

1. The Investment Law 2025 comprehensively replaces the Investment Law 2020 and establishes a clear transitional mechanism

According to Clause 4, Article 51 of the Investment Law 2025: “The Investment Law 2020 shall cease to be effective as from the effective date of this Law…” This comprehensive replacement carries significant implications:

• Ending the situation of overlapping original law and multiple amending laws;
• Consolidating scattered provisions into a unified legal document;
• Reducing risks of misapplication or incorrect citation of legal instruments.

In addition, the rights of investors recorded in Investment Certificates issued prior to the effective date of the Investment Law 2025 shall remain valid, and investors are generally not required to re-conduct investment procedures under the new law.

Notably, the new Law introduces a mechanism for digitalization of procedures: Vietnamese citizens may use their personal identification number in lieu of copies of their Citizen Identity Card or Passport when carrying out administrative procedures under the Investment Law, provided that the national database has been connected (Clause 5, Article 51). This represents a clear advancement in administrative procedure reform, which was not specifically provided under the Investment Law 2020.

2. Foreign investors may establish economic organizations prior to obtaining project approval

According to Clause 2, Article 19 of the Investment Law 2025, foreign investors are permitted to establish economic organizations in Vietnam without being required to have an approved investment project beforehand, provided that they meet the market access conditions.

This provision changes the previous approach under the old law, which required “having a project first – establishing the enterprise later.” This amendment creates favorable conditions for investors to:

• Establish a legal presence earlier;
• Conduct market research;
• Prepare a more flexible investment structure

However, investors should note that, under the draft Decree guiding the Investment Law 2025, within 06 months from the date of establishment, investors must complete the procedures to obtain an Investment Registration Certificate; otherwise, the economic organization may be required to carry out dissolution procedures in accordance with the law.

3. Standardization of criteria for determining economic organizations subject to conditions applicable to foreign investors

According to Clause 1, Article 20, an economic organization shall be subject to conditions applicable to foreign investors if it falls under one of the following cases:

• A foreign investor holds more than 50% of the charter capital;
• An economic organization falling under case (a) holds more than 50% of the charter capital;
• A foreign investor and an economic organization falling under case (a) together hold more than 50% of the charter capital.

This provision clarifies the threshold of “more than 50% of charter capital,” establishes the mechanism for indirect control (second-tier ownership), and reduces the risk of broadly applying FDI conditions. At the same time, Clause 2, Article 20 specifies that economic organizations not falling under the above cases shall be subject to conditions applicable to domestic investors.

Compared to the Investment Law 2020, the structure of the provisions under the Investment Law 2025 is more systematized and transparent, enabling investors to accurately assess the legal status of enterprises.

4. Clarification of the scope of projects requiring investment policy approval

Article 24 specifically stipulates 20 groups of projects that must undergo investment policy approval procedures, mainly including:

• Important infrastructure projects;
• Projects involving land use or marine areas;
• Projects with potential significant environmental impacts;
• Projects located in sensitive areas concerning national defense and security.

Regarding authority, most projects fall under the competence of the provincial People’s Committees (through provincial specialized agencies such as the Department of Finance) or the provincial Industrial Zone Management Boards (for projects using infrastructure in industrial zones, export processing zones, and economic zones). There are no longer cases under the competence of the National Assembly. The specific listing of project categories enhances predictability and reduces disputes over the scope of application.

5. Simplification of procedures for outbound investment

Another new point of the Investment Law 2025 is the narrowing of the scope of projects required to obtain an Outbound Investment Registration Certificate, which mainly applies to:

• Projects with large capital scale (specific thresholds to be stipulated by the Government);
• Outbound investment projects in conditional business sectors.

For most other projects, investors shall carry out foreign exchange registration procedures in order to transfer capital. This approach reflects a shift from pre-check to post-check with controlled capital flows. It represents a major breakthrough in reducing administrative procedures and provides significant support to investors in preparing and obtaining approvals for outbound investment.

6. Expansion of special investment procedures

Under the Investment Law 2025, the mechanism of special investment procedures is expanded to apply to projects in:

• Industrial zones;
• Export processing zones;
• High-tech zones;
• Concentrated digital technology zones;
• Free trade zones;
• International financial centers;
• Functional areas within economic zones
• (except for projects subject to investment policy approval as stipulated by the Government).

Projects under this mechanism are exempted from many pre-check procedures, based on the investor’s commitment to compliance, but are still required to fulfill reporting obligations and remain subject to subsequent state management.

CONCLUSION

The Investment Law 2025 is not merely a technical amendment, but rather a comprehensive restructuring of the legal framework for investment in Vietnam. Key highlights include:

• Complete replacement of the Investment Law 2020 with clear transitional provisions;
• Standardization of criteria for determining investment activities of economic organizations with foreign capital;
• Allowing the establishment of enterprises prior to having an investment project;
• Expansion of special investment procedures to reduce administrative burdens;
• Narrowing of outbound investment procedures to simplify the process;
• Promotion of digitalization and decentralization.

These changes will directly impact investors’ strategies for investment structuring, risk management, and business expansion plans from 2026 onwards. Against the backdrop of this significant legislative reform, ENT Law LLC stands ready to assist Clients in reviewing investment structures, assessing market access conditions, and developing compliance solutions in line with the new regulations.

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