Vietnam Investment Law 2026: Key changes for foreign investors

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New Investment Law enables company formation before project approval and removes 38 conditional business lines.

On 11 December 2025, Vietnam’s National Assembly approved a new Law on Investment that fundamentally changes how foreign companies enter the market. The law takes effect 1 March 2026, with conditional business provisions starting 1 July 2026.

Company formation before project approval

The most significant change reverses decades of practice: foreign investors can now establish a legal entity and obtain an Enterprise Registration Certificate (ERC) before securing an Investment Registration Certificate (IRC), the document approving the activities in which a company is permitted to undertake. Previously, companies needed approval of their business activities before they could incorporate, resulting in a longer investment scheduled than in other countries in ASEAN. Without the IRC and legal entity, an investor could not begin to do business in Vietnam.

The new law means manufacturers can now set up their legal entity, open bank accounts, sign an office lease, hire local design and engineering firms, begin staff recruitment and conduct market validation while project approvals are pending. This is particularly valuable for operations with complex supply chain or hiring requirements.

38 business lines removed from licensing

The law cuts conditional business lines to 198 categories, removing licensing requirements for 38 sectors including tax services, customs brokerage, and certain transport and construction activities. Another 20 sectors have narrowed requirements.

Vietnam is shifting from requiring permission before operation to allowing companies to operate if compliant, with enforcement through post-inspection much like all of the other countries in ASEAN, moving away from the model popularized in China where an investment must be approved before any investment can be made.

Investment policy approval limited to 20 project types

Only projects in sensitive sectors (e.g. nuclear, casinos, telecom infrastructure, publishing), those requiring large-scale land use such as industrial zones, major infrastructure projects, projects involving heritage sites, or those requesting special policy mechanisms now require investment policy approval. Most standard commercial and manufacturing projects no longer need this level of approval.

Fast-track green channel expanded

Projects in industrial parks, export processing zones, high-tech zones, digital technology zones, free trade zones, and economic zones can now use special fast-track procedures that eliminate investment policy approval, environmental impact assessment, construction permits, and fire safety approvals. Instead, companies submit written commitments to comply with technical standards and an investment proposal identifying environmental impacts.

Approval authority decentralized

Provincial People’s Committee Chairs now approve most projects, including residential housing, seaports, airports, and golf courses. Previously, many of these required Prime Minister approval. This shifts decision-making closer to where projects are located, potentially accelerating investment timelines. However, in practice, due to the recent merger of Vietnam’s provinces, some procedures may be prolonged due to the changes in authorization level.

Project modifications simplified

Two major triggers for re-approval have been eliminated: capital increases of 20% or more and technology changes. Manufacturers can now scale production or upgrade equipment without bureaucratic delays. Only 5 circumstances require adjustment approval: changes to approved objectives, land area or location changes, extensions over 24 months, duration adjustments, and investor changes before operations start.

Extended project durations

High-tech zones, digital technology parks, and projects with special investment incentives can now receive 70-year operating terms (previously limited to economic zones). Projects can be renewed for periods up to the original maximum term. Delays from government actions or administrative procedures don’t count against project timelines, a significant protection for long-term investments.

The compliance trade-off

While entry becomes easier, compliance expectations are stricter. The shift to post-inspection enforcement means companies need solid understanding and preparation of the requirements from day one through their own internal systems or experienced advisors. The law favors investors with clear business scope and realistic setup plans over those with vague activities or minimal preparation.

What to watch

Early 2026 functions as a transition period where requirements vary by sector and locality. Companies should monitor government-issued lists defining which sectors require pre-licensing versus post-inspection management and expect provincial interpretation to vary as responsibilities shift from licensing officers to inspection teams.

For manufacturers considering Vietnam, location strategy now matters as much as sector choice, industrial park placement provides access to fast-track procedures that standalone locations don’t receive.

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For guidance on how these changes affect market entry or expansion plans, contact Tractus or Vietnam Country Manager Duc Le at duc.le@tractus-asia.com