Vietnam’s 2025 Investment Law does not represent a dramatic liberalization headline, but it marks a meaningful shift in how the State manages foreign investment. The focus is moving away from heavy upfront approvals toward tighter classification, clearer responsibility allocation, and stronger post-establishment supervision.

This creates opportunities to enter the market with fewer procedural bottlenecks, while reshaping where legal and compliance risk sits throughout the investment lifecycle. Understanding this shift is essential to avoiding missteps that may only surface once operations are already underway.

The Policy Direction Behind the 2025 Investment Law

The amendments reflect Vietnam’s broader regulatory objective of balancing investment facilitation with state oversight. Rather than acting as a gatekeeper at the entry stage, regulators are increasingly positioning themselves as supervisors throughout a project’s operation.

This policy direction aligns with Vietnam’s efforts to streamline administration while maintaining control over sensitive sectors, land use, and capital flows. In practice, investors are given more responsibility to correctly classify their projects, comply with sector conditions, and maintain accurate records from the outset.

What Has Actually Changed Under the 2025 Investment Law

The 2025 Investment Law focuses on refinement rather than reinvention. Several changes are particularly relevant in practice.

First, the scope of projects requiring investment policy approval has been narrowed. Certain projects that previously required high-level approval may now proceed without it, provided they fall within clearly defined parameters.

Second, procedural overlaps between investment registration and enterprise establishment have been reduced. In some cases, foreign investors may complete corporate establishment steps earlier in the process, rather than waiting for sequential approvals.

Third, the law tightens definitions around project scope and sector classification. This reduces flexibility in interpretation but increases predictability if projects are properly structured from the beginning.

Importantly, core principles such as conditional business lines, foreign ownership restrictions, and land-use controls remain firmly in place.

From Pre-Approval to Post-Inspection: A Major Risk Shift

One of the most significant practical implications of the 2025 Investment Law is the redistribution of regulatory risk. Fewer upfront approvals mean fewer early checkpoints, but this does not equate to reduced scrutiny overall.

Instead, enforcement is increasingly occurring through post-establishment inspections, audits, and compliance reviews. Errors that previously would have been identified during licensing may now surface months or years into operations.

This makes early-stage classification, documentation, and internal compliance controls more critical than speed. Mistakes are harder to unwind once operations are underway.

How Market Entry Planning Changes

Market entry strategy under the 2025 framework requires more deliberate planning. Investors must carefully assess whether an Investment Registration Certificate is still required, and if so, how project scope is defined.

Wholly foreign-owned subsidiaries, joint ventures, and M&A-driven entry routes are affected differently. While procedural timelines may shorten in some cases, the legal consequences of misclassification or incomplete filings have increased.

Sequencing matters more than ever. Establishing an entity quickly without aligning licenses, land rights, and operational scope can create compliance gaps that attract scrutiny later.

Conditional Business Lines: What Is Easier and What Still Carries Risk

The streamlining of conditional business lines under the 2025 Investment Law has led to some confusion. While certain administrative steps may be simplified, the underlying conditions attached to these sectors remain enforceable.

In practice, this means that compliance obligations may be assessed after operations commence rather than before. Investors operating in sectors such as logistics, education, healthcare, or technology services should not interpret simplified entry as reduced regulatory burden.

Failure to meet sector conditions can still result in suspension, remediation requirements, or forced restructuring.

Investment Policy Approval: Narrower Scope, Higher Stakes

Although the 2025 Investment Law reduces the number of projects requiring investment policy approval, the projects that remain subject to approval face closer and more technical scrutiny. The reform shifts focus from volume to sensitivity.

Investment policy approval may still be required depending on factors such as:

  • The authority involved, including approvals by the National Assembly, the Prime Minister, or provincial People’s Committees
  • The scale of land use, particularly where projects involve large land areas or changes in land use purpose
  • The nature of the sector, especially for projects linked to infrastructure, natural resources, or regulated industries
  • Adjustments to project objectives, capacity, or implementation location after establishment

A key risk under the new framework is reclassification. Projects initially assessed as not requiring approval may later be deemed to fall within approval thresholds during inspections or audits. In such cases, authorities may require corrective procedures, impose operational restrictions, or mandate restructuring.

This means conservative upfront assessment remains essential. Early legal review and careful definition of project scope help reduce the risk of retroactive compliance issues that are difficult and costly to remedy once operations begin.

What the 2025 Investment Law Means for M&A and Project Restructuring

The 2025 Investment Law introduces additional considerations for acquisitions and restructurings, particularly where transactions result in changes to ownership, control, or project scope.

From an investment law perspective, share acquisitions and asset acquisitions can have different implications. While a share transfer may not require a new investment registration in itself, subsequent changes to business lines, capital structure, or land use can trigger notification or approval obligations.

Project restructuring following an acquisition carries heightened risk under the new framework. Authorities are paying closer attention to whether post-transaction operations remain consistent with registered project objectives and conditions.

Common risk scenarios include:

  • Acquiring a company and expanding its business activities beyond registered scope
  • Restructuring land use or factory operations without updating project approvals
  • Changing ownership ratios in conditional sectors without reassessing foreign ownership limits

This reinforces the importance of aligning transaction structure with investment law requirements from the outset. Legal due diligence should extend beyond corporate matters to include project registration, licensing history, and compliance status.

Key Compliance Risks Under the 2025 Investment Law

As Vietnam shifts toward post-establishment supervision, compliance risk is increasingly shaped by how accurately projects are classified, documented, and managed over time. These issues tend to emerge not at establishment, but during inspections or operational changes. Several risk areas are becoming more prominent under the 2025 framework.

  • Misclassification of business lines or project scope. Investors may initially register a narrow scope to expedite establishment, only to expand operations later. If activities fall outside registered scope, this can trigger enforcement action during inspections.
  • Operating beyond approved locations or capacity. Expanding factory size, adding new premises, or increasing production capacity without updating approvals can expose projects to sanctions, particularly for land-intensive or industrial investments.
  • Incomplete or inconsistent licensing documentation. Gaps between investment registration, enterprise registration, sector licenses, and land-use documents are more likely to be identified during audits. Authorities may require rectification or impose operational restrictions.
  • Delayed or inadequate response to inspections. Under the new regime, failure to address inspection findings promptly or provide supporting documentation can escalate matters from administrative correction to enforcement measures.
  • Assuming fewer approvals mean lighter enforcement. A common but risky assumption is that streamlined entry reduces compliance exposure. In practice, enforcement has shifted downstream, where remedies are more disruptive and costly.

These risks highlight the importance of ongoing compliance management rather than one-time establishment checks. Early identification and remediation of issues can prevent interruptions to operations and long-term regulatory consequences.

Conclusion

The 2025 Investment Law reflects Vietnam’s continued effort to modernize its investment regime while retaining oversight through enforcement rather than approval. The opportunity lies in faster entry and greater procedural flexibility. The corresponding risk lies in underestimating the importance of correct project classification, complete documentation, and ongoing compliance once operations begin.

Under the new framework, speed alone is no longer a meaningful advantage. Compliance readiness has become a strategic consideration. Investors are expected to maintain consistent records covering investment scope, licenses, land use, and operational activities, and to respond promptly to inspections or regulatory reviews. Weak internal controls or misalignment between legal, operational, and finance teams can now surface as enforcement issues long after establishment.

Corporate Counsels advises investors on market entry, restructuring, and compliance under Vietnam’s evolving investment framework. We assist businesses in navigating the practical implications of the 2025 Investment Law with clarity and precision. For professional support, contact us at letran@corporatecounsels.vn.