Understanding Vietnam's Law on Investment 2025: What Foreign Investors Need to Know

If you are looking at Vietnam in 2026 and asking yourself whether this is the right time to enter the market, you might have come across a major regulatory update through Law on Investment No. 143/2025/QH15, often referred to as the Vietnam Law on Investment 2025. The law takes effect on March 1, 2026, although the provisions governing conditional business lines under Article 7 and Appendix IV take effect slightly later, on July 1, 2026.

We've reading up on it and trying to wrap my non-legal head around it. Have put this together in plain and simple language so that other business owners, foreign entrepreneurs and SMEs who considering expanding into Vietnam, can get a real practical understanding on how investment projects are structured and approved - presented in plain English. Will try to break down what has changed, what it means in real terms for business owners, and how to approach investing in Vietnam under the new framework.

Why Vietnam Updated Its Investment Law

Vietnam's economic growth and foreign investment strategy

Vietnam continues to position itself as one of Southeast Asia's best performing destinations for foreign investment. Over the past decade, the country has relied heavily on foreign direct investment (FDI) to expand manufacturing, strengthen supply chains, and accelerate industrial development.

The updated investment law reflects the government's intention to maintain that momentum while refining how foreign investment is regulated.

Policy commentary around the new law highlights three long-term objectives:

• attracting high-value and high-technology investment projects
• improving transparency and predictability for investors
• modernizing regulatory supervision methods

In short, Vietnam still wants foreign capital, but it wants to manage it more efficiently.

Vietnam regulatory reform necessary for more investments

Anyone who has set up a company in Vietnam before knows that the licensing process could sometimes feel unnecessarily complex. If you value your sanity and peace of mind, then this is perhaps one of the best reasons why you should get help from consultants. 

Historically, foreign investors often had to jump through a lot of hoops in order to obtain investment approval first, and only then establish the company that would carry out the project. That sequencing would very often create operational delays because companies needed a legal entity in place before they could handle normal business activities such as signing leases or hiring staff.

The 2025 investment law introduces an updated licensing sequence that can make the early stages of market entry more flexible in certain circumstances.

The transition window for implementation

Although the law takes effect in March 2026, some parts of the reform follow a staggered timeline.

The provisions governing conditional business lines take effect on July 1, 2026, which effectively creates a transition period for regulators and businesses to adjust to the new framework.

For companies planning market entry in early 2026, this transition window is important to consider when designing a market entry timeline.

Key Changes in Vietnam's Law on Investment 2025

This section covers the most practical changes affecting foreign investors.

Reduction of Vietnam conditional business lines

One of the headline reforms is the removal of 38 Vietnam conditional business lines.

Vietnam has long maintained a list of sectors where businesses must meet specific conditions before operating. These conditions may involve licenses, certifications, professional requirements, or regulatory approvals.

Following the reform, the total list of Vietnam conditional business lines has been consolidated to 198 categories.

The goal of this change is to reduce unnecessary regulatory barriers while still maintaining oversight in sectors that require closer supervision.

Selected Examples of Vietnam Conditional Business Lines That Were Removed

As mentioned above, the reform removes 38 conditional business lines in total. The full list spans a wide range of technical and sector-specific activities, but here are several examples that are particularly relevant for foreign entrepreneurs and international SMEs considering market entry into Vietnam.

• Tax procedure services
  Businesses that assist companies with tax filings and tax administration procedures are no longer treated as a conditional business activity.
• Customs procedure services
  Companies providing support with customs declarations and import-export documentation are no longer subject to the same licensing conditions as before.
• Insurance auxiliary services
  Certain supporting services related to insurance operations have been removed from the conditional business category.
• Architectural services
  Some architectural and design-related professional services are no longer classified as conditional business lines.
• Automobile maintenance and repair services
  Operating vehicle repair and maintenance services is no longer subject to conditional business licensing under the revised framework.
• Energy auditing services
  Services that assess energy efficiency and consumption have been removed from the conditional business list.
• Overseas study consultancy services
  Companies that assist students with international education placements are no longer regulated as a conditional investment sector.
• Data center services
  Certain digital infrastructure services, including data center operations, have been removed from the conditional business list.
• Land information system IT services
  Some specialized information technology services relating to land and geographic data systems are no longer conditional.
• Event organization services
  Organizing events and commercial activities in the events industry is no longer treated as a conditional investment activity.
• Art performance organization services
  Certain cultural and performance organization activities have been removed from conditional licensing requirements.

Conditional business lines and post-inspection management

Another notable change concerns how certain conditional sectors will be regulated.

Under the new framework, the government will publish two types of regulatory categories:

1. sectors that still require licensing or certification before operations begin
2. sectors where regulatory conditions will be published publicly and enforced through post-inspection supervision

In practical terms, this means that in some industries the regulatory approach shifts from “approval before operation” toward “operate in compliance and verify through inspection.”

This does not mean less regulation. Instead, it changes the timing of regulatory oversight.

For some businesses, this may reduce front-end licensing delays. However, it also means companies must ensure compliance from the beginning because inspections may occur after operations start.

Company Setup in Vietnam: Updated licensing sequence before the investment project registration

Another important development is the updated sequencing between Vietnam company establishment and investment project registration.

The new law allows foreign investors, in certain circumstances, to establish an economic organization before obtaining or amending an Investment Registration Certificate (IRC), provided that market access conditions are satisfied.

In practical terms, this can mean obtaining an Enterprise Registration Certificate (ERC) first, then completing the investment project registration process.

For business owners, this updated sequencing can simplify early operational steps. Having an entity in place earlier may make it easier to prepare for market entry activities such as hiring employees or negotiating commercial contracts.

However, it is important to emphasize that the IRC still remains a critical regulatory document for investment projects, and investors must complete the appropriate investment registration procedures where required.

Vietnam Company Establishment: Market access conditions for foreign investors remain in place

While the reform introduces flexibility in some areas, the fundamental market access framework for foreign investors remains unchanged.

Foreign investors generally receive the same market access as domestic investors unless a sector appears on Vietnam's list of restricted sectors for foreign investment.

For sectors on that list, the government may impose conditions such as:

• limits on foreign ownership
• restrictions on permitted business activities
• specific investment structures
• requirements for Vietnamese partners

These market access conditions remain one of the most important factors when planning foreign investment in Vietnam.

Simplification of Vietnam investment policy approval in certain projects

The law also refines how projects requiring Vietnam investment policy approval are categorized.

The reform aims to concentrate higher-level approval requirements on projects that involve strategic sectors, national security considerations, or significant environmental and infrastructure impacts.

For more typical commercial investments, the goal is to reduce administrative complexity and allow investment projects to move forward more efficiently.

Not All Industries Will Follow the Same Model

It is important to understand that the post-inspection approach will not apply to every sector.

Certain industries will still require licensing or certification before operations begin. This is especially true for sectors involving:

• public safety
• financial services
• healthcare
• national security considerations
• environmental protection

In those areas, the traditional licensing system will remain in place.

The reform mainly affects sectors where regulators believe that compliance can be monitored effectively after operations begin, rather than requiring approval beforehand.

What the Vietnam New Investment Law Means for Foreign Entrepreneurs and SMEs

For foreign business owners, the practical implications are straightforward.

Vietnam Market Entry will become more flexible in some sectors

Three developments in the law can help reduce entry friction:

• the reduction of conditional business lines
• the updated licensing sequence between ERC and IRC
• the shift toward post-inspection supervision in certain sectors

In some cases, these changes may allow companies to move through the early stages of market entry more efficiently.

However, the extent of this flexibility still depends heavily on the specific industry involved.

Regulatory planning is still essential

Vietnam's regulatory environment remains structured, and success often depends on proper planning.

Before entering the market, foreign investors should still carefully assess:

• market access conditions for their sector
• whether their business activity falls under conditional business lines
• licensing and investment approval requirements

Companies that skip this step often encounter delays later when licenses, ownership structures, or project scopes need to be adjusted.

Compliance matters more under a post-inspection system

When regulation shifts toward post-inspection supervision, compliance becomes even more important.

Instead of proving eligibility before operating, businesses may need to demonstrate that they have been operating in accordance with the rules if regulators conduct inspections later.

For foreign companies, this typically means maintaining proper documentation, clear licensing scopes, and internal compliance procedures.

Strategic Opportunities for Foreign Investors in Vietnam

Despite regulatory changes, Vietnam remains one of the most attractive investment environments in Asia.

Vietnam High-growth industries

Foreign investors continue to focus on several major sectors:

• manufacturing and industrial production
• supply chain and logistics infrastructure
• technology and digital services
• consumer-driven retail and services

The government's investment strategy continues to prioritize sectors that contribute to economic modernization and industrial upgrading.

Investment incentives remain part of Vietnam's policy framework

Vietnam's investment law continues to provide a framework for investment incentives and support policies.

These incentives are typically designed to encourage projects that contribute to national development priorities such as:

• advanced technology
• infrastructure development
• environmentally sustainable industries
• regional economic development

Although incentives vary depending on the project and location, they remain an important part of Vietnam's broader investment policy.

Long-term outlook for Vietnam investment 

The broader direction of the 2025 reform suggests two clear trends.

First, Vietnam is working to reduce administrative barriers to investment by streamlining procedures and clarifying regulatory frameworks.

Second, the government is strengthening post-investment supervision mechanisms to ensure that projects operate in compliance with regulatory standards.

For investors, this combination aims to create a system that is both more accessible and more predictable.

Conclusion: What Foreign Investors Should Do Next

The Vietnam Law on Investment 2025 represents an evolution rather than a complete overhaul of the country's investment framework.

The law introduces several meaningful improvements, including:

• removal of 38 conditional business lines
• updated sequencing between company establishment and investment project registration
• expanded use of post-inspection regulatory supervision

At the same time, the core principles of Vietnam's investment system remain in place, particularly regarding market access conditions and regulatory compliance.

For foreign entrepreneurs considering doing business in Vietnam, the key takeaway is simple.

Vietnam continues to welcome foreign investment, but successful market entry still depends on choosing the right structure, understanding the regulatory environment, and planning the investment process carefully.

Set up a company in Vietnam

If you want to set up a company in Vietnam, understanding the investment framework is the first step.

At United Consulting, we help foreign entrepreneurs navigate:

• company formation and licensing
• Investment Registration Certificate procedures
• Enterprise Registration Certificate registration
• market entry strategy and compliance planning

If you are exploring foreign investment opportunities in Vietnam, feel free to reach out and discuss your project! We love talking business!