Vietnam Kicks Off July 2025 with Sweeping Reforms for a "Radiant Vietnam"
As Vietnam had officially underwent major political and economic changes as of July 01st, 2025, further sweeping administrative reforms was launched aimed at simplifying government structure and improving efficiency. Here is brief summary of what happen in the first week of changes:
Significant Fee and Charge Reductions for Businesses in Vietnam
In a major move to support businesses and citizens, the Ministry of Finance officially reduced 50% of 46 types of fees and charges. This policy is effective from July 1, 2025, until the end of 2026, after which fees will revert to their previous levels starting January 1, 2027. This marks the 6th time such a fee reduction policy has been implemented in the past five years.
Key Fees Reduced:
- Business registration fees
- Fees for establishing and operating banks and non-bank credit institutions
- Appraisal fees for restricted business goods/services and fire prevention/fighting designs
- Appraisal fees for construction investment projects
- Certificate of Origin (C/O) fees
- Airport and airfield exploitation concession fees
- Permit fees for sending workers abroad
- Appraisal fees for international and domestic travel service business licenses
- Fees in the fields of healthcare and most securities-related services
Economic Impact: The move is expected to save businesses and citizens over 3,000 billion VND, though it will trim 700 billion VND from the state’s income. The goal is to boost productivity, encourage investment to Vietnam and contribute to economic growth.
Launch of Digital IDs for Foreigners in Vietnam
To facilitate the lives of foreigners residing, working, or studying in Vietnam, a new 50-day campaign from July 1st to issue electronic identity accounts to foreign nationals was launched
Foreigners will be able to use them for banking, rentals, and accessing public services. It also helps reducing time, paperwork, and in-person contact, while ensuring authenticity and protecting legal rights
Process: Eligible foreigners holding permanent or temporary residence cards must apply in person at immigration management offices. Required documents include
- A passport/travel document
- A completed registration form (Form TK01),
- A verified mobile number, and an email (if available).
Applicants will undergo facial image capture and fingerprint collection for verification. The processing time is within 03 working days if biometric data exists in the database, or seven working days otherwise. There is no fee for this procedure.
Key Tax Policy Updates
Several new tax policies also took effect on July 1, 2025, bringing significant changes to individual and business taxation.
- Personal ID as Tax Code: Vietnamese individuals, households, and business households will now use their personal identification numbers (số định danh cá nhân) as their tax codes. Old tax codes and invoices will remain valid.
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Non-Cash Payment for VAT Deduction: Effective from July 1, only transactions made without cash are eligible for VAT deduction.
- E-commerce Tax Collection: Online e-commerce platforms, both domestic and foreign, are now responsible for deducting and remitting VAT and personal income tax on behalf of sellers for transactions generating domestic revenue. Sellers whose taxes are collected this way will not need to re-declare these taxes.
- Continued VAT Reduction: A 2% VAT cut applies to many goods and services through December 2026.
For more details about changes of tax and invoicing start from July 1, 2025, please visit our previous blog post here.
New Notarization Rules Take Effect from July 1, 2025
Starting July 1, 2025, Vietnam will enforce new rules under the Law on Notarization 2024. These changes aim to improve transparency, tighten identity verification, and support digital transformation in notarization services.
Mandatory Photo at Time of Signing: All individuals requesting notarization must be photographed while signing documents in front of the notary. This requirement ensures proper identity verification and strengthens the accuracy of notarization records. The photo becomes part of the official notarization file.
Applies to Authorized Representatives: Proxies or authorized representatives must also follow this rule. Authorized persons act on behalf of others must comply fully with notarization procedures—including the photo requirement.
No Photo, No Notarization: If anyone refuses to be photographed—whether the principal or their representative—the notary office can legally deny the service. Without a photo, the notarization record is considered incomplete and non-compliant.
What It Means for SMEs and Foreign Entrepreneurs:
The Vietnam legal overhaul presents both promising opportunities and operational challenges for SMEs and foreign investors doing business in Vietnam. So, what does this actually all mean for you?
Opportunities:
- Lower costs: Thanks to fee cuts and VAT reductions.
- Simpler admin: Digital IDs help foreigners handle banking, leases, and paperwork faster.
- More efficiency: The new government structure may reduce delays and simplify contact points.
- Better transparency: New notarization rules aim to reduce fraud.
Challenges:
- Tax compliance: Businesses must adjust systems for new VAT and e-commerce rules.
- Transition bumps: Mergers and structural changes could cause short-term confusion or delays.
Vietnam is pushing for a modern, digital, and investor-friendly system. While some changes will take getting used to, the long-term direction points toward a stronger, cleaner, and more efficient place to do business. Businesses that adapt early may gain a head start. Contact United Consulting today so that we can accompany you in your exciting venture in Vietnam.
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Disclaimer:
The information provided in this article is for general informational purposes only and does not constitute legal, tax, or investment advice. While every effort has been made to ensure accuracy at the time of publication, laws and regulations may change. Readers are encouraged to consult with qualified legal or financial advisors before making decisions related to foreign investment or share transfers in Vietnam. United Consulting is not liable for any actions taken based on this content.
The Week in Review: Vietnam officially entered a new era