Significant restructuring of Vietnam government underway

8 July 2025

Vietnam is undertaking the most significant restructuring of its central government since the 1986 Đổi Mới reforms which transformed Vietnam’s centrally planned economy into a more market-oriented one. The current changes to Vietnam’s central and local government apparatus were outlined in 2017 in Resolution No. 18-NQ/TW and revived in December 2024 via Plan 141/KH-BCĐTKNQ18. Formal approvals for the restructuring were provided in 2025 with the passing of Resolution No. 176/2025/QH15, the Law on Government Organisation No. 63/2025/QH15, and Resolution No. 60-NQ/TW.

The new framework aims to create a more streamlined, efficient, and effective state apparatus through a series of complex mergers and transfers of functions between ministries. The implementation of much of the new framework, including ministry consolidation, took effect on 1 March 2025.

This article outlines the key aspects of this framework.

Restructuring of ministries

The main tenet of the framework is the consolidation of current ministries to reduce their number from 18 to 14. The restructuring also affects several ministerial-level and government-affiliated agencies, with anticipated mergers and role realignments to reduce overlapping authority and increase administrative efficiency. Similar streamlining is intended at provincial levels. Specific guidance on affected agencies, including those in the banking, broadcasting, and education sectors, is expected to be issued via sub-decrees throughout 2025.

Highlighted below are selected consolidations that may affect businesses and investors.

Ministry of Planning and Investment

The Ministry of Planning and Investment (“MPI”) has been responsible for overseeing foreign investment, business establishment, and operational matters in Vietnam, including the issuance of licences to investors and enterprises. The MPI has been dissolved, with its functions being transferred to the Ministry of Finance. At the provincial level, the functions of the Departments of Planning and Investment, including the authority to issue Investment Registration Certificates and Enterprise Registration Certificates, are accordingly being transferred to the Department of Finance.

Ministry of Resources and Environment

The Ministry of Natural Resources and Environment (“MONRE”) and the Ministry of Agriculture and Rural Development will be merged to form a new Ministry of Agriculture and Environment. Among its current responsibilities, the MONRE has been overseeing the issuance of land use rights and assets attached to land certificates, as well as the development of land use plans and related policies.

Ministry of Information and Communications

The Ministry of Science and Technology (“MOST”) has assumed responsibility for matters relating to telecommunications, information technology applications, cybersecurity, electronic transactions, and the national digital transformation agenda. These functions were previously under the purview of the Ministry of Information and Communications. In addition, MOST is authorised to issue licences in these areas. Certain press-related and media functions have been reassigned to the Ministry of Culture, Sports and Tourism.

Ministry of Home Affairs

The Ministry of Home Affairs (“MHA”) has assumed responsibility for all labour-related functions previously under the purview of the now-dissolved Ministry of Labour, War Invalids and Social Affairs (“MOLISA”). These responsibilities include the registration of labour utilisation and internal labour regulations by enterprises, the issuance of work permits for foreign employees, and the administration of employment-related matters such as labour policy, wage regulation, and social security. As part of the government restructuring, MHA has been merged with MOLISA.

New two-tier local administration model

Complementing the restructuring of Vietnam’s central government, substantial reforms are also underway at the sub-national level with the aim of simplifying administrative structures, enhancing public service delivery, and promoting regional economic integration. Effective from 1 July 2025, Vietnam implemented a nationwide two-tier local administration model, comprising 34 provinces and cities (reduced from 63), and the abolition of district levels. This change is accompanied by the merger or dissolution of a large number of commune-level units, with reductions expected to reach up to 60% to 70% nationwide. Despite the scale of this restructuring, the government has issued clear guidance to ensure that the delivery of public services (such as licensing, land administration, and labour regulation) remains uninterrupted. Expanded one-stop-shop models are being rolled out at both provincial and commune levels to maintain service continuity.

A notable component of this restructuring is the merger of Ho Chi Minh City with the neighbouring provinces of Bình Dương and Bà Rịa–Vũng Tàu to form a unified metropolitan region. This initiative, often referred to as the creation of “Greater Ho Chi Minh City”, seeks to consolidate administrative functions, standardise regulatory procedures, and unlock synergies across industrial, logistical, and financial hubs. The combined region is projected to span over 6,700 square kilometres with a population exceeding 13 million. While the full implementation timeline is still being finalised, foundational steps have begun.

Additional reforms include the establishment of special administrative and economic zones at the commune level, such as the newly formed Cát Hải Special Zone in Haiphong, which are designed to support targeted industrial and infrastructure development. In addition, fiscal authority and administrative responsibilities previously held by district-level entities are being redistributed to provincial and commune-level governments. These responsibilities include oversight of public assets, procurement, taxation, and the licensing of household and cooperative businesses.

Assurances for investors

The Vietnam Government has affirmed that its recent restructuring will not adversely affect the country’s business and investment environment. According to statements by the Ministry of Foreign Affairs, the primary objective of the reforms is to streamline administrative procedures and create more favourable conditions for economic actors. In support of these objectives, the National Assembly issued Resolution No. 190/2025/QH15, setting out guiding principles for the reorganisation process. The resolution explicitly provides that the restructuring must not result in additional requirements nor conditions, longer processing times, increased costs, nor administrative burdens for individuals or organisations. It also affirms the continued validity of existing licences and approvals and ensures that the implementation of the reforms does not disrupt Vietnam’s obligations under international treaties.