The Investment Law of 2025 is a significant step in reforming Vietnam’s investment environment, aiming to achieve transparency, stability, and internationalization while strengthening the regulation of high-risk sectors. This is a crucial period for businesses and investors to adjust their strategic plans, utilize new preferential policies, and mitigate legal risks.
I. Background and Amendment Objectives:
- Improve the investment environment to be more transparent, stable, and in line with international practices.
- Reduce “license sub-items” to enhance Vietnam’s competitiveness in attracting foreign direct investment (FDI).
- Ensure the legitimate rights and interests of investors in the context of rapidly changing laws.
- Strengthen the management of high-risk sectors, especially those involving public health.
II) Key Highlights and Important Changes:
2.1 Prohibited Sectors for Investment and Operation
- Newly added prohibited sectors: e-cigarettes and heated tobacco products.
- Stricter management of sectors involving safety, health, and the environment.
2.2 Conditionally Accessible Investment Sectors
- Investment and operation conditions can only be stipulated by laws, National Assembly resolutions, Standing Committee decrees, and government decrees.
- Ministries/local governments are prohibited from setting their own conditions → Significantly reduce administrative procedures.
2.3 Market Access Conditions for Foreign Investors
- The government publishes a directory of industries where market access is restricted for foreign investors.
- Specific requirements are stipulated, including: equity ratios, investment forms, business scope, and partner requirements.
2.4 Investment Protection Mechanisms in the Event of Legal Changes
Investors can obtain:
- Continue to enjoy existing preferential policies.
- Deduct actual losses from taxable income.
- Adjustment of project objectives.
- Application for loss compensation or support within 3 years.
2.5 Protection of Property Rights and Investment Activities
- Legitimate assets cannot be nationalized or administratively confiscated.
- The State shall not force investors to comply with the following requirements:
- Localization ratio
- Mandatory exports
- Foreign exchange self-balancing
- Mandatory R&D ratio
- Mandatory headquarters address
- Mandatory provision of products/services in designated locations
- Mandatory use of domestic goods or services
2.6 Investment Incentives and Support Policies
- New beneficiaries
- Large-scale investment projects
- Projects employing a large workforce
- Key national projects
- Investment support explicitly includes:
- Infrastructure support
- Human resource training
- Credit support
- Site and land support
2.7 Investment Dispute Resolution Mechanism
- Expanded selection of arbitration forms:
- Vietnamese arbitration
- International arbitration
- Foreign arbitration
- Arbitration institutions agreed upon by both parties
- Disputes with State authorities: Priority will be given to resolution through Vietnamese courts/arbitration, unless otherwise stipulated by international treaties.
III) Impact on Businesses and Investors
3.1 Positive Impacts
- A more transparent investment environment and reduced legal risks.
- Foreign investors can more easily anticipate policy changes and formulate plans.
- Compliance costs for businesses decrease due to reduced operating conditions.
- Safeguards in the event of legal changes enhance investor confidence.
3.2 Impacts to be Noted
- E-cigarette and heated tobacco companies must cease operations or transform their businesses.
- Some industries need to reassess market access conditions.
- Large projects should prepare documentation to fully utilize the new preferential policies.
- Advice for leaders and investors:
- Review the industries in which businesses operate to clarify the direct impact of the new law.
- Reassess FDI strategies, especially those involving industries with conditional access.
- Seize the new preferential policies to promote the implementation of large or key projects.
- Improve legal documentation and compliance systems to ensure protection in the event of legal changes.
- Continuously monitor the market access restriction list published by the government.
IV. Definitions of Investment Law
In this Law, the following terms are defined as follows:
- Approval of investment policy means the competent state authority’s approval of the objectives, location, scale, schedule, duration of project implementation; the investor or the method of selecting the investor; and special mechanisms or policies (if any) for implementing the investment project.
- Investment registration authority means the state authority competent to issue, amend, and revoke the Investment Registration Certificate.
- National investment database means a collection of data on investment projects nationwide, connected with the database systems of relevant authorities.
- Investment project means a set of medium‑term or long‑term capital‑investment proposals to conduct business investment activities in a specific geographical area within a defined period.
- Expansion investment project means an investment project that develops an existing project by expanding its scale, increasing capacity, renewing technology, reducing pollution, or improving the environment.
- New investment project means an investment project implemented for the first time or an investment project independent from an existing project.
- Innovative start‑up investment project means an investment project implementing ideas based on exploiting intellectual property, technology, or new business models with high growth potential.
- Business investment means the investor’s act of contributing capital to conduct business activities.
- Business investment conditions mean the conditions that organizations and individuals must satisfy when conducting business investment activities in sectors and trades subject to conditional business investment, excluding technical standards and regulations issued by competent authorities regarding product or service quality.
- Market access conditions for foreign investors mean the conditions foreign investors must satisfy to invest in sectors and trades listed in the Market Access Restriction List for foreign investors as prescribed in Clause 2, Article 8 of this Law.
- Investment Registration Certificate means a paper or electronic document recording the investor’s registered information regarding an investment project.
- National investment information system means a professional information system used to monitor, evaluate, and analyze nationwide investment activities to serve state management and support investors in conducting business investment activities.
- Outbound investment activities mean activities in which investors transfer investment capital from Vietnam abroad and use profits generated from such capital to conduct business investment activities overseas.
- Business Cooperation Contract (BCC) means a contract signed between investors for business cooperation, profit sharing, or product sharing under the law without establishing an economic organization.
- Export processing zone means an industrial zone specializing in manufacturing export goods and providing services for export production and export activities.
- Industrial zone means a geographically delimited area specializing in industrial goods production and providing services for industrial production.
- Economic zone means a geographically delimited area consisting of multiple functional zones, established to achieve objectives of investment attraction, socio‑economic development, and national defense and security protection.
- Investor means an organization or individual conducting business investment activities, including domestic investors, foreign investors, and economic organizations with foreign investment capital.
- Foreign investor means an individual holding foreign nationality or an organization established under foreign law conducting business investment activities in Vietnam.
- Domestic investor means an individual holding Vietnamese nationality or an economic organization without any foreign investor as a member or shareholder.
- Economic organization means an organization established and operating under Vietnamese law, including enterprises, cooperatives, unions of cooperatives, and other organizations conducting business investment activities.
- Economic organization with foreign investment capital means an economic organization with foreign investors as members or shareholders.
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Investment capital means money or other assets as prescribed by civil law and international treaties to which the Socialist Republic of Vietnam is a member, used to conduct business investment activities.
V) Validity
This Investment Law shall come into effect on March 1, 2026, except as provided in paragraphs 2 and 3 of this Article.
The Investment Law No. 61/2020/QH14 has been amended and supplemented in several articles by Law No. 72/2020/QH14, Law No. 03/2022/QH15, Law No. 05/2022/QH15, Law No. 08/2022/QH15, Law No. 09/2022/QH15, Law No. 20/2023/QH15, Law No. 26/2023/QH15, Law No. 27/2023/QH15, Law No. 28/2023/QH15, Law No. 31/2024/QH15, Law No. 33/2024/QH15, Law No. 43/2024/QH15, Law No. 57/2024/QH15 and Law No. 90/2025/QH15 (hereinafter referred to as the Investment Law of 2020/2020/QH14). Articles of the Law on Investment 2020 (and similar provisions) shall cease to be effective from the date this Law comes into force, except for Article 7 and the List of conditional investment and business sectors and professions stipulated in Appendix IV issued together with the Law on Investment 2020, which shall cease to be effective from July 1, 2026.