High-Tech Investment Boost: Vietnam’s New Law on Investment Sets a Powerful Foundation for Growth

Vietnam continues to evolve its economic landscape with decisive legal reforms aimed at attracting high-quality investment, speeding up business entry, and strengthening competitiveness in the global market. The recently passed Law on Investment 2025 — effective from March 1, 2026 — marks one of the most ambitious overhauls of Vietnam’s investment regime in years, shaping a more investor-friendly, flexible, and future-focused environment

This major reform reflects the government’s strategic ambition to shift from quantity-led investment attraction to quality-driven participation in global value chains, particularly in high-tech, innovation, digital transformation, clean energy, and production ecosystems with strong spillover effects.

A Streamlined Investment Framework for the Modern Economy

One of the most noteworthy aspects of the new Law on Investment 2025 is its simplified structure. Compared with the previous 2020 law — which had 77 articles — the updated version now has 52 articles organized into seven chapters, signaling a clearer and more concise legal framework. This simplification is aimed at significantly reducing red tape and improving the clarity of investment rules.

Faster Market Entry and Licensing

Under the new law, foreign investors can now establish an economic organization before securing an Investment Registration Certificate (IRC) for their project, a departure from the previous requirement that mandated project approval first. This change reduces administrative burdens and allows investors to set up a legal business presence more quickly while preparing full documentation.

Another positive development is the ability for investors to open direct capital accounts to contribute initial project funds before receiving the IRC, a move that streamlines financial setup and enhances liquidity flexibility during early project phases.

Smarter Approvals with Decentralization

The Law on Investment 2025 introduces a more efficient decentralized approval structure, transferring authority from national to provincial levels for many investment decisions. While the National Assembly retains oversight for projects requiring special mechanisms or policies, the Prime Minister and People’s Committee Chairs of provinces now have expanded powers to approve or delegate project approvals. This reform is designed to accelerate decision-making and improve local accountability.

By narrowing the scope of projects requiring high-level approval and redistributing authority, the law empowers regional authorities to respond swiftly to investor needs, a key competitive advantage as Vietnam competes with other ASEAN economies for strategic FDI.

Simplification of Conditional Business Activities

In a bold move to foster a more open business environment, the Law on Investment 2025 reduces the number of conditional business lines and revises the scope of others. Previously, certain industries such as tax procedure services, customs procedures, and data center services faced additional licensing restrictions — many of which have now been removed or simplified.

The streamlined classification is expected to lower compliance costs, simplify entry requirements, and give domestic and foreign investors greater freedom in choosing business activities aligned with Vietnam’s development priorities.

Expanded Investment Incentives for Strategic Sectors

A central highlight of the new law is the shift from a detailed listing of incentivized industries to a policy-objective-driven approach. Rather than enumerating every industry eligible for incentives, the law emphasizes broad strategic goals, such as:

• Encouraging science and technology, digital innovation, semiconductors, and high-tech industries
• Promoting a green economy, renewable energy, and digital transformation
• Supporting the development of industrial clusters, value chains, and high-value export industries
• Enhancing education, training, healthcare, and infrastructure development

This forward-looking approach — focused on outcomes rather than checklist criteria — reflects Vietnam’s ambition to attract investment with spillover effects and long-term impact.

In addition, the law expands the scope of locations eligible for investment incentives, including not only traditional industrial and export processing zones but also free trade zones, high-tech agriculture zones, and international financial centers — widening opportunity horizons for investors.

Reducing Project Adjustment Requirements

To further support investor autonomy, the new law removes two common triggers for investment project adjustments, namely changes to capital above 20% and changes to assessed technology, leaving only five specified cases where adjustments would still be required. This shift signals a move toward greater operational freedom for investors, reducing bureaucratic friction for project expansion and refinement.

For investors seeking to capture opportunities, Core5 Vietnam provides more than facilities , we are your strategic partner in long-term success.

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