1. Permitting the Establishment of an Economic Organisation Prior to Obtaining an Investment Project

Investors can now establish a company in Vietnam before completing certain investment registration procedures, including the Investment Registration Certificate (“IRC”).

This differs from the previous model, where approval was required prior to incorporation. The new approach enables businesses to:

• Establish an on-the-ground presence earlier
• Initiate hiring and operational planning
• Respond more quickly to market opportunities

However, faster setup does not eliminate regulatory obligations.

“Speed gives you entry, but not certainty,” Brian points out. “You can set up faster, but if licensing, capital contribution and compliance aren’t properly aligned, that early advantage can create downstream issues.”

The IRC remains mandatory and capital contribution timelines continue to apply. Without effective coordination across legal, financial and operational functions, gaps may emerge leading to compliance exposure or implementation delays.

2. Narrowing the Scope of Investment Policy Approval

The LOI 2025 refines the scope of investment policy approval to focus on large-scale, sensitive, land-related, or high environmental impact projects.

This reduces the number of projects subject to lengthy pre-approval processes, enabling faster execution.

3. Expansion of Projects Eligible for Special Investment Procedures – The “Green Channel” Mechanism

The “green channel” mechanism introduced under LOI 2020 exempts eligible projects from investment policy approval, environmental assessments and construction permits, requiring only a written compliance undertaking.

Previously limited to selected technology projects, the LOI 2025 extends this to all sectors within designated zones.

This significantly accelerates project timelines and reduces administrative burden.

4. Changes to Conditional Business Lines and Sectors

The LOI 2025 authorises the Government to define and regulate investment and business conditions for selected sectors through two clear categories:

1. Sectors that still require licences or approvals before operations can begin;
2. Sectors that will move to a disclosure-based approach, where businesses only need to meet stated requirements and will be subject to post-licensing supervision.

Currently, most conditional sectors under the LOI 2020 operate under a pre-approval regime. However, some do not require such upfront control and can be effectively managed through post-approval oversight.

This shift enables a more risk-based regulatory approach, freeing low-risk sectors while maintaining oversight where it matters most.

5. The “One-Stop” Mechanism, Electronic Procedures, and Their Impact on Foreign Investors

The LOI 2025 strengthens the “one-stop” mechanism by integrating project registration, amendments and reporting into a single digital system – the National Investment Information System, reducing paperwork and fragmented approvals.

As entry becomes simpler, post-approval supervision increases, requiring businesses to prioritise ongoing compliance. Early-stage risks, such as inconsistent local implementation and delays in guidance, should be closely monitored.

“The changes don’t necessarily mean less regulation, it means accountability begins earlier,” Brian emphasises.

“While entry becomes more straightforward, maintaining compliance is more closely integrated into day-to-day operations.”

In essence, the reform moves complexity from entry to execution.