Law on Investment 2025: A Shift in Regulatory Approach from Ex-Ante Control to Ex-Post Supervision

The Law on Investment No. 143/2025/QH15 was adopted by the National Assembly on 11 December 2025 and takes effect from 1 March 2026. Compared with the Law on Investment 2020, the new legislation not only introduces technical legal amendments but also reflects a clear shift in the State’s regulatory philosophy toward investment activities.

While the 2020 Law emphasized control over market access conditions and strict ex-ante regulatory management, the 2025 Law demonstrates a trend toward:

• Enhancing investor autonomy;

• Narrowing the scope of administrative intervention;

• Standardizing and unifying procedural mechanisms; and

• Increasing flexibility during project implementation.

Below are five fundamental reforms introduced by the 2025 Law.

I. Removal of 38 Conditional Business Lines – A Major Step Toward Greater Freedom of Enterprise

One of the most notable reforms is the streamlining of the List of Conditional Business Lines (Appendix IV).

The 2025 Law:

• Removes 38 conditional business lines;
• Revises the regulatory scope of 20 business lines.

The abolition of business conditions in areas such as tax and customs procedure services, commercial inspection services, employment services, labor outsourcing services, and automobile warranty and maintenance services reflects a clear trend toward reducing market entry barriers.

Policy Analysis

This reduction is not merely a technical amendment to the list but carries structural significance:

1. Shifting regulatory focus from ex-ante control to ex-post supervision;
2. Reducing compliance costs and administrative processing time;
3. Minimizing the risk of discretionary “licensing” mechanisms.

From an institutional perspective, this reform moves closer to the principle that investors may conduct business in all sectors not expressly prohibited by law, rather than maintaining stringent controls at the market entry stage.

II. Allowing Foreign Investors to Establish Economic Organizations Prior to Having a Specific Project

Clause 2, Article 19 of the Law on Investment 2025 provides that foreign investors may establish an economic organization to implement investment projects before carrying out procedures for the issuance or amendment of an Investment Registration Certificate (IRC).

Comparison with the 2020 Law

Under the 2020 Law, in practice, foreign investors were generally required to have a specific investment project prior to establishing an enterprise. This made the pre-investment phase more complex, particularly for strategic or financial investors.

Legal Significance

The new provision:

• Separates the procedure for establishing a legal entity from the procedure for project implementation;
• Aligns with holding company or intermediate investment vehicle structures;
• Reduces documentation pressure at the pre-project stage.

From an integration perspective, this amendment aligns Vietnam’s regulatory framework more closely with international practice and facilitates foreign direct investment (FDI) inflows.

III. Narrowing the Circumstances Requiring Adjustment of Investment Policy Approval

Clause 3, Article 33 of the Law on Investment 2025 removes two circumstances previously requiring mandatory adjustment of the investment policy approval:

• A change in total investment capital of 20% or more resulting in a change in the project scale;
• A change in technology that had been appraised during the investment policy approval process.

Impact Assessment

Under the 2020 Law, increases in capital or changes in technology typically triggered procedures for adjustment of the investment policy approval, thereby increasing:

• Administrative processing time;
• Risk of project delays;
• Opportunity costs.

By narrowing the scope of cases requiring adjustment, the 2025 Law:

• Enhances operational flexibility;
• Reflects the characteristics of high-tech industries, where technological changes occur frequently;
• Reduces unnecessary administrative burdens.

This reform is particularly significant for large-scale projects, technology projects, and industrial manufacturing projects.

IV. Permitting Adjustment (Extension or Reduction) of Project Duration During Implementation

Clause 4, Article 31 of the Law on Investment 2025 allows investors to adjust—either extend or shorten—the operational term of a project during its implementation, provided that the adjusted term does not exceed the statutory maximum duration.

Distinction from the 2020 Law

The 2020 Law permitted extension only when the project was approaching expiry of its operational term. Investors lacked a flexible mechanism to adjust the project duration during operation.

Practical Significance

The new provision:

• Accommodates project restructuring models;
• Supports adjustments to business strategies;
• Reduces legal risks when modifying investment plans.

This is a strongly market-oriented reform, reflecting a more flexible regulatory approach and reduced administrative intervention in investors’ business decisions.

V. Unification of Procedures for Transfer of Real Estate Projects under the Law on Investment

Clause 7, Article 51 of the Law on Investment 2025 expands the scope of application of procedures for the transfer of real estate projects under the Law on Investment.

From 1 March 2026, projects that have:

• Been subject to a decision on, or approval of, investment policy; or
• Been granted or had amended an Investment Registration Certificate,

shall carry out transfer procedures in accordance with the Law on Investment.

Systemic Significance

This amendment resolves previous issues of:

• Overlap between the Law on Investment and the Law on Real Estate Business;
• Inconsistency in the scope of applicable projects.

The unification of the legal framework:

• Shortens transfer timelines;
• Enhances legal predictability;
• Reduces disputes regarding competent authorities.

For the real estate M&A market, this constitutes a reform of substantial practical significance.

Conclusion

The Law on Investment 2025 does not represent “absolute deregulation,” but rather a recalibration between:

• Freedom of investment;
• Compliance obligations; and
• The supervisory role of regulatory authorities.

Its guiding philosophy may be summarized as:

Reducing ex-ante control – strengthening ex-post supervision – enhancing accountability.

For investors, the new law provides greater operational flexibility. However, the reduction of administrative procedures simultaneously requires:

• Robust internal control systems;
• Full compliance with sector-specific regulations;
• Proactive legal risk management.

The regulatory burden has not disappeared; rather, it has shifted from the entry stage to the stage of ongoing compliance and post-implementation oversight.

Disclaimer:

This article is intended for informational purposes only and does not constitute legal advice from HTH & Partners. The content represents the views of HTH & Partners and is subject to change without prior notice.

The legal provisions referenced in this article were valid at the time of publication but may have been amended or repealed by the time of reading. We strongly recommend consulting a qualified legal professional before applying any information contained herein.