Vietnam issues decree guiding implementation of Law on Investment
On 31 March 2026, Vietnam enacted Decree No. 96/2026/ND-CP (“Decree”), which provides detailed implementation rules for the new Law on Investment No. 143/2025/QH15 (“LOI 2025”). The LOI 2025 was adopted by the National Assembly on 11 December 2025 and took effect on 1 March 2026, replacing the Law on Investment No. 61/2020/QH14.
The LOI 2025 effects a substantial overhaul of the investment regime in Vietnam, and the Decree provides further detail on a range of operational matters.
This article summarises some of the key highlights of the new regime.
Enhanced incentives regime
The new investment regime includes an expansion of special investment incentives aimed at attracting investment in strategic sectors such as semiconductors, artificial intelligence (“AI”), and digital infrastructure.
Two features of the new framework are particularly noteworthy. First, the regime places greater emphasis on the substance and quality of investment projects than on scale alone. Under the previous regime, eligibility for the most generous incentives was largely a function of capital threshold; under the LOI 2025, projects must also meet qualitative criteria such as advanced technology content, research and development (“R&D”) activity, technology transfer commitments, or integration of Vietnam enterprises into production and supply chains. The shift signals a more policy-driven approach to incentive allocation and may encourage foreign investors in technology-intensive sectors to engage more proactively with the framework.
Second, the Decree links incentive eligibility to actual capital deployment. Each tier of the special incentives regime requires not only that the investor commit a certain level of capital, but that a specified portion of that capital be disbursed within a prescribed window. A project that meets the registration threshold but fails to disburse within the required timeframe will lose its entitlement for the relevant period.
The Decree establishes a three-tier structure for special incentives based on capital scale and disbursement timelines as set out in the table below.
|
Tier |
Project type |
Capital |
Disbursement requirement |
|
1 |
Innovation centres; R&D centres; digital infrastructure (including data centres, cloud infrastructure, and 5G or above mobile infrastructure) |
VND3,000 billion |
Minimum VND1,000 billion within three years |
|
2 |
Semiconductor and key digital technology projects (including AI data centres) |
VND6,000 billion |
Full disbursement within five years |
|
3 |
Other priority sectors listed in Appendix II |
VND30,000 billion |
Minimum VND10,000 billion within three years |
The level and duration of incentives, including corporate income tax relief and land or water rent exemptions, are determined under sectoral legislation. In addition, the Prime Minister may determine bespoke incentive packages for qualifying projects, taking into account technological content, scale, disbursement progress and broader economic impact.
Appendix II of the Decree expands the list of incentivised sectors, including AI data centres, hydrogen energy and green ammonia production, semiconductor materials and equipment manufacturing, and projects connected to global production and supply chains.
Entitlement to incentives is conditional and subject to ongoing compliance. Projects that meet additional qualifying criteria may benefit from higher or supplementary incentives for the remaining incentive period. Conversely, incentives may be withdrawn for any period during which the applicable conditions are not satisfied, although investors may continue to access other incentives where the relevant conditions are met.
Expedited investment procedure
The LOI 2025 formalises an expedited investment procedure for projects located in designated zones, including industrial parks, export processing zones, high-tech zones, economic zones, free trade zones, and other designated areas.
Projects approved under this procedure benefit from a significantly streamlined approval process. In particular, the requirement to obtain investment policy approval, which would otherwise apply to larger or sensitive projects, is removed, and the project proceeds directly to registration. Certain pre-construction approvals are also not required at the registration stage. Instead, investors are required to provide written commitments to comply with applicable legal requirements.
The Decree provides for a 15-working-day timeline for issuance of an Investment Registration Certificate (“IRC”). While approvals such as environmental impact assessments are deferred, they are not waived. An environmental permit must be obtained prior to construction, and the investor must notify relevant authorities at least 30 days before commencing construction. Authorities retain the power to inspect, supervise, and enforce compliance.
The Decree allows existing projects to opt into the expedited regime on a prospective basis, including on a phased basis for multi-stage developments.
Establishment of economic organisations
Under the new regime, foreign investors have the express flexibility as to when they incorporate their Vietnam investment vehicle in relation to obtaining the IRC for the underlying investment project with two pathways available:
- Pre-IRC: A foreign investor is able to establish an economic organisation prior to applying for an IRC. The entity is established under the Law on Enterprises (or the law applicable to the relevant type of organisation) and is required to obtain the IRC within 12 months of establishment in order to implement the investment project. The entity may not amend its business registration to add further investment or business activities until the IRC has been obtained.
- Post-IRC: Where a foreign investor obtains the IRC before establishing an economic organisation, the newly established entity becomes the investor implementing the project as recorded in the IRC from the date of issuance of the Enterprise Registration Certificate (the formal incorporation document for a Vietnam company, issued by the business registration authority under the Law on Enterprises).
The pre-IRC establishment route offers practical advantages for foreign investors. It allows the Vietnam vehicle to be put in place at an earlier stage of transaction planning, which can streamline the negotiation of land arrangements, contracts, and pre-operational matters. It also provides flexibility in cases where deal timing requires a corporate vehicle to be operational before the project-level approvals are finalised. The 12-month window provides certainty as to when the IRC must be in place.
After establishment, foreign-invested entities may amend their business registration to expand their business lines, subject to applicable market access conditions, and may establish branches, representative offices and other business locations under standard procedures of the Law on Enterprises.
Procedural refinements
In addition, the Decree introduces several measures aimed at simplifying interactions with the investment registration authorities. Investors may now demonstrate financial capacity through a broader range of supporting documents than before, rather than relying on audited financial statements alone. Electronic submissions and digital signatures are formally recognised through the National Investment Information System. Authorities are required to issue a single consolidated request for any amendments or clarifications to an application dossier, addressing a recurring source of delay under the previous regime.
Market access for foreign investors
The LOI 2025 retains the “negative list” approach to market access. As a general rule, foreign investors are entitled to the same treatment as domestic investors, except in sectors expressly listed as restricted. Restrictions take the form of either sectors in which foreign investment is prohibited or sectors where investment is permitted subject to conditions. Section B of Appendix I sets out the sectors and industries with conditional market access for foreign investors.
The Decree gives effect to this framework through Appendix I, which identifies 23 sectors that are closed to foreign investment in Section A, including press and news activities, certain judicial-administrative services, public postal services, and specific environmental and maritime activities. In addition, foreign investment is permitted in 62 sectors as set out in Appendix I’s Section B, subject to conditions, including financial services, telecommunications, education, real estate, logistics, and professional services.
The Decree introduces several notable refinements to these lists. Two sectors that were previously closed to foreign investment under Section A have been reclassified as conditionally accessible under Section B: (i) the manufacture and trading of weapons, explosives, and supporting tools; and (ii) the manufacture of military materials or equipment, and the trading of military uniforms, supplies, weapons, and specialised military and police equipment. In each case, foreign investment is now permitted subject to compliance with applicable conditions, marking a measured liberalisation in two sensitive defence-related areas.
Section B has also been expanded to include several new categories, of which three are of particular note: (i) construction activities carried out by foreign contractors; (ii) the management and operation of intermediary e-commerce platforms, social networks with e-commerce functions, and integrated e-commerce platforms; and (iii) the two sectors reclassified from Section A noted above. The addition of the e-commerce platform sector reflects the framework’s response to a fast-growing area of foreign investor interest.
In addition to the sector-specific restrictions, the Decree identifies a number of cross-cutting conditions that may apply, including conditions relating to land use, natural resources, public services, real estate ownership, subsidies, and participation in State-owned enterprise equitisation.
The Decree also clarifies a number of practical points on the application of market access conditions. Where multiple international treaties apply, an investor may elect to rely on one treaty regime but must adopt it in its entirety. Where an enterprise operates across multiple sectors with different foreign ownership limits, the lowest applicable limit applies across the entity. Dual-nationality investors may elect to be treated as domestic or foreign investors, with corresponding legal consequences.
The negative list applies not only to foreign investors but also to economic organisations in Vietnam that are treated as foreign-invested entities under Article 20(1) of the LOI 2025.
Routes for foreign investment
Depending on the nature, scale, and location of the project, an investor may be required to obtain approval of the investment policy (an upstream approval granted by the National Assembly, the Prime Minister, or provincial-level authorities for projects of scale or sensitivity), followed by approval of the investor and issuance of the IRC, which constitutes the formal registration of the project. In simpler cases, particularly for smaller projects or those located in industrial parks, high-tech zones, and other designated zones, investment policy approval may not be required, and the project may proceed directly to registration.
Once upstream approvals have been obtained, the IRC is issued within the following timeframes:
- Where investment policy approval and investor approval have been combined into a single decision, the investment registration authority issues the IRC within five working days of receipt of the decision, without requiring a separate application;
- Where the investor has won an auction or tender, or has been approved as the sole qualifying investor, the investor must submit a written request, with the IRC to be issued within five working days; and
- For projects within economic zones, the IRC is issued concurrently with investor approval. Projects not subject to investment policy approval follow a separate procedure under Article 39 of the Decree, with a 10-working-day issuance timeline.
Foreign investors may also acquire an interest in an existing economic organisation, whether by capital contribution, share purchase, or purchase of equity. In each case, the investor must satisfy applicable market access conditions, as well as requirements relating to national defence, security and land use where relevant. Transactions resulting in foreign control, involving sensitive land, or relating to conditional sectors must be registered with the investment registration authority prior to completion.
Business cooperation contracts (“BCCs”) involving foreign investors require an IRC and must comply with prescribed content requirements. Foreign investors may also establish operating offices in Vietnam to implement BCCs.
Transitional provisions for existing investors
The Decree includes transitional provisions to preserve the validity of existing investment approvals and clarify the treatment of ongoing projects.
Existing approvals remain valid and may continue to be implemented without re-approval under the new regime. Amendments to existing projects are subject to the new framework, although not all changes require fresh investment policy approval.
Foreign-invested entities established before the LOI 2025 are not subject to retroactive application of the new rules for past investments but must comply with the new regime for future investment activities.
Investors may also elect to transition to the new project performance security regime where applicable.
