On December 11, 2025, the National Assembly of Vietnam passed a new Investment Law (which will officially take effect on March 1, 2026, with certain conditional operating provisions applicable from July 1, 2026). This law marks a profound transformation in Vietnam’s foreign investment policy, shifting from a simple pursuit of “quantity expansion” to a focus on “quality and compliance.”
Key Points Explained
- From quantitative change to qualitative change: linking discounts with commitments
• Foreign-invested enterprises that wish to obtain special preferential policies such as tax breaks must make specific commitments, including technology transfer and support for the local supply chain. They can no longer easily obtain long-term preferential treatment based solely on registered capital or industry category, as was the case in the past. - Strategic projects will have a “green channel”
• For strategic key projects such as high technology, core semiconductors, and R&D centers, the new law establishes a “green channel” for approval, significantly reducing the time limit for administrative approval, aiming to attract the world’s top technology giants to set up operations. - Access Classification and Simplified Process
• Except for a few sensitive industries such as defense, airports, ports, telecommunications, and publishing, which still require prior “investment proposal approval”, the “company registration first, license application later” convenient model has been fully implemented in other industries, further improving the efficiency of foreign investment. - Substantive control standards and corporate procedure framework
• The new policy further clarifies the standards for the completion of corporate equity transfers, the standardization of capital contribution certificates, and the substantive control standards established through the new policy, strengthening the penetrating supervision of foreign actual controllers and funds. - Simplification of foreign worker management (in coordination with Agreement 219)
• In line with investment reforms, Vietnam’s Decree No. 219/2025/NĐ-CP merged the two-step process of “approval of employment needs” and “issue of work permits” for foreign workers into a single submission, shortening the approval cycle to 10 working days. For details, please refer to the interpretation of Vietnam’s new policy No. 219 on the management of foreign workers.