Vietnam’s 2025 Investment Law: 5 Major Changes Foreign Investors Need to Know

16-06-26 MTParners

From March 1, 2026, Law No. 143/2025/QH15 and Decree No. 96/2026/ND-CP introduce a new mechanism: foreign investors can establish a company first and complete investment procedures afterward — along with several breakthrough provisions that simplify Vietnam’s investment environment.

On December 11, 2025, the National Assembly passed the 2025 Investment Law (Law No. 143/2025/QH15), which officially takes effect on March 1, 2026, replacing the 2020 Investment Law. This is the most extensive legal reform in the investment sector since 2020, focused on simplifying procedures, expanding opportunities for foreign investors, and removing long-standing legal bottlenecks. Guiding Decree No. 96/2026/ND-CP further details the new regulations and takes effect on March 31, 2026. Below are the five most important changes that businesses and investors need to understand.

1. Foreign Investors: Establish a Company First, Obtain the Investment Registration Certificate Later

This is the most groundbreaking change in the 2025 Investment Law. Under Article 19, Clause 2, foreign investors are no longer required to have an investment project before establishing an economic organization in Vietnam. Instead, they may establish a company first, then complete the procedure for obtaining an Investment Registration Certificate (IRC) within the following 12 months.

Previously, under the 2020 Investment Law, foreign investors had to obtain the IRC first before being allowed to register a company — a sequential process that often took 3-6 months just to complete the first step. The new mechanism significantly shortens market entry time, particularly benefiting investors who want to quickly establish a legal presence in Vietnam before launching a specific project.

Decree No. 96/2026/ND-CP (effective March 31, 2026) has detailed this process, clearly defining the conditions, documentation, and procedures for foreign investors to complete their IRC after company registration.

2. Narrowing the Scope of Investment Policy Approval — Significantly Cutting Administrative Procedures

The 2025 Investment Law significantly narrows the list of projects requiring investment policy approval. Under Article 42 and related provisions, this procedure now applies only to projects in truly important and sensitive sectors, including: seaports, airports, telecommunications, publishing, press, and projects in areas affecting national defense and security.

Compared to the 2020 Investment Law, dozens of project categories that previously required the lengthy investment policy approval process have now been removed from this list. This means most ordinary FDI projects can proceed directly to the Investment Registration Certificate procedure, saving anywhere from several months to a full year of preparation time.

3. Abolishing the Outbound Investment Policy Approval Procedure

One change highly welcomed by the business community is that the 2025 Investment Law officially abolishes the outbound investment policy approval procedure — which previously fell under the authority of the National Assembly or the Prime Minister for large overseas investment projects under the 2020 Investment Law.

Instead, Vietnamese investors seeking to invest abroad now only need to obtain an Outbound Investment Registration Certificate under Decree No. 103/2026/ND-CP (effective April 3, 2026). Additionally, Circular No. 38/2026/TT-BTC (effective April 15, 2026) prescribes the forms and reports required for practical implementation.

This change makes it much easier for Vietnamese enterprises to expand their investments abroad, particularly amid the growing “go global” trend among Vietnam’s private business community.

4. Expanding Special Investment Procedures and Adjusting Project Duration Rules

The 2025 Investment Law expands the scope of the special investment procedure — previously applicable only to certain economic zones — to cover more types of functional zones, including: industrial parks, export processing zones, hi-tech zones, concentrated digital technology zones, free trade zones, and international financial centers.

Decree No. 96/2026/ND-CP has detailed this special investment procedure, creating a “green channel” for administrative procedures for investment projects in priority development areas. Investors in these zones will benefit from faster application processing, shorter licensing times, and a unified point of contact.

In addition, the 2025 Investment Law also adjusts regulations on investment project duration, removes two cases requiring project adjustment, and changes the rules on investment project transfer — giving investors greater flexibility during operations.

Practical Impact

With these changes, the 2025 Investment Law and its guiding documents mark an important turning point in improving Vietnam’s investment environment:

Foreign investors save 3-6 months of market entry procedures thanks to the “establish company first, IRC later” mechanism.
FDI enterprises in ordinary sectors (technology, manufacturing, services) no longer need to go through the lengthy investment policy approval step, significantly reducing compliance costs.
Vietnamese investors expanding abroad have had their biggest barrier removed — the outbound investment policy approval procedure previously requiring Prime Minister/National Assembly approval.
Businesses investing in digital technology zones and free trade zones benefit from a procedural “green channel” thanks to the expanded special investment provisions.
However, investors should note: regulations on conditional business sectors still follow the 2020 Investment Law until June 30, 2026 — the new appendix under the 2025 Investment Law only applies from July 1, 2026.

Recommendations for Businesses and Investors

To make the most of the opportunities under the 2025 Investment Law, businesses should:

Review existing investment projects to determine whether they qualify for exemption from investment policy approval under the new law, and adjust implementation plans accordingly.
New foreign investors entering the Vietnamese market should thoroughly understand the “establish company first” mechanism to shorten market entry time.
Businesses preparing to invest abroad should update their procedures in line with Decree No. 103/2026/ND-CP and Circular No. 38/2026/TT-BTC instead of the old process.
Pay attention to the transition period for business conditions: from July 1, 2026, the new appendix of conditional business sectors under the 2025 Investment Law will apply — some previously conditional sectors may be liberalized or adjusted.
Consult with investment law specialists to comprehensively assess opportunities and legal risks as the guiding legal framework continues to be issued.

MT & Partners Law Firm, with a team of experienced lawyers in investment, corporate, and project legal advisory, stands ready to assist businesses and investors in assessing the impact of the 2025 Investment Law, reviewing legal documentation, and advising on strategies for establishing and operating a business in Vietnam. Contact hotline 0987140772 or email info@mtpartners.vn for consultation.

(*) This article is for reference only and does not replace specific legal advice.