Key Updates in Vietnam’s New Investment Law

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Simpler investment procedures

Under the new law, foreign investors can now set up a company and receive an Enterprise Registration Certificate (ERC) before applying for an Investment Registration Certificate (IRC). This reverses the old process and gives investors more flexibility from the start.

With the ERC issued earlier, companies can begin preparation activities right away. They can record pre-investment and setup costs in their accounting books, supported by VAT invoices issued in the company’s name. This helps improve cash-flow management, operational readiness, and tax efficiency, in line with applicable regulations.

Fewer conditional business sectors

The law also reduces the number of business lines subject to special conditions. At the same time, investment incentives are refocused on priority areas such as innovation, digital transformation, high-tech manufacturing, and sustainable development.

Fast-track “green lane” investment process

To boost competitiveness and attract high-quality foreign investment, Vietnam is introducing a special fast-track mechanism for selected projects. This “green lane” shortens approval timelines, simplifies administrative procedures, and offers enhanced incentives for eligible foreign direct investment (FDI) projects.

Under this mechanism, qualifying projects may be exempt from investment policy approval and several other procedures, including technology assessment, environmental impact studies, planning approval, construction permits, and fire safety approvals. The fast-track process applies mainly to projects located in industrial parks, export processing zones, high-tech zones, digital technology zones, free trade zones, international financial centers, and economic zones, except for projects that are legally required to obtain policy approval.

A more attractive investment destination

Overall, the 2025 Investment Law creates a more transparent, efficient, and business-friendly legal framework. These reforms strengthen Vietnam’s position as a competitive and attractive destination for foreign investors looking to enter or expand in the market.

Potential foreign investors may re-evaluate and in most cases shorten time-lines required for setting up FDI projects in Vietnam. Related compliance and planning costs may also be be reduced following the implementation of the above rules, increasing Vietnam’s competitiveness in the race to attract global FDI.

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