The Law on Investment 2025 is Vietnam's strong breakthrough legal framework in attracting investment

The Law on Investment 2025 was officially approved by the National Assembly on December 11, 2025, including 07 Chapters, 52 Articles and 04 Appendices that have replaced the Law on Investment 2020. The Law on Investment 2025 officially takes effect on March 1, 2026 with the expectation of removing administrative barriers, improving the quality of the investment and business environment, and improving competitiveness in attracting Vietnam's foreign investment capital in the new development period.

The introduction of the Law on Investment 2025 takes place in the context that Vietnam's economy is striving to transform itself to attract high-quality FDI inflows, with high technology content, added value and spillover.

1. What to expect from the Law on Investment 2025

The introduction of the Law on Investment 2025 takes place in the context that Vietnam's economy is striving to transform itself to attract high-quality FDI inflows, with high technology content, added value and spillover.

According to data from the General Statistics Office under the Ministry of Finance, the total foreign investment capital recorded in Vietnam as of December 31, 2025 reached 38.42 billion USD, up 0.5% over the previous year. Foreign direct investment disbursed in the year was estimated at 27.62 billion USD, up 9% over the same period last year and reaching the highest level in the period 2021-2025. These are quite impressive and meaningful numbers in the context of the domestic and international economy being affected by unpredictable trade policies and fierce competition between countries. This further confirms the increasing attractiveness of Vietnam's investment environment and the confidence of foreign investors in Vietnam is still good[1].

Entering a new stage of development requires Vietnam to seek and build a consistent, transparent and effective investment legal framework in practice to create a strong sustainable foundation for growth and meet the increasingly high and complex requirements of investors on the environment.  places for establishment and development of large-scale investment projects in technology.

2. Adjustments of the Law on Investment for the new period

Adjustment of conditional business lines to expand the space for free business

The new Investment Law has abolished 38 conditional business lines from 227 to 198. At the same time, narrow the scope of about 20 industries and professions to eliminate outdated, vague or no longer appropriate criteria. The narrowing of dozens of conditional business lines has expanded the space for free business with the desire to help the economy gradually reduce its dependence on business conditions and increase the role of transparency, competition and post-inspection measures.

However, it should be noted that the removal of some industries and trades from the list does not mean the complete abolition of the legal requirements of these activities. It is possible that these investment and business activities have been governed by other specialized laws. For example, construction activities of foreign contractors are excluded from the list under the Law on Investment 2025. However, this activity is regulated according to the market access mechanism for foreign investors specified in the Law on Construction 2025.

In addition, investors should also note that the Government will issue specific regulations to provide detailed guidance on conditional business lines[2] in the coming time.

Allow foreign investors  to establish enterprises before obtaining an Investment Registration Certificate ("IRC")

The Law on Investment 2025 reverses the investment process that has existed for more than 30 years in Vietnam, that is, foreign investors must be granted an IRC before being allowed to establish an economic organization to implement an investment project. This is a completely new regulation and shows Vietnam's new thinking and approach in attracting foreign investment in the coming time. This approach will help foreign investors enter the market faster and can establish many different investment projects after establishing a business in Vietnam.

We also believe that the new investment mechanism of the Investment Law 2025 will help Vietnam attract more investment capital flows in the fields of high technology, finance and sustainable green development. When the new mechanism gives enterprises the initiative to be allowed to have a commercial presence in Vietnam before implementing various investment projects. This is a major reform step of Vietnam on investment, not only expressing Vietnam's desire to develop the country, but also Vietnam's desire to create a transparent business environment and accompany foreign investors so that all parties can benefit in the context of today's unstable world.

Advantages of attracting FDI from the "green channel" mechanism and the Investment Support Fund

The Law on Investment 2025 marks an important turning point in completing the legal framework on bidding, planning, investment and PPP investment, in which 2 very important contents are added:

Firstly, officially establish the Investment Support Fund. The Government establishes an investment support fund from additional corporate income tax revenues in accordance with regulations to combat erosion of the global tax base and other lawful sources to stabilize the investment environment, encourage and attract strategic investors, multinational corporations and support domestic enterprises in a number of fields that need to be encouraged for investment;

Secondly, supplementing regulations on special investment procedures – the "green channel" mechanism. With this mechanism, the State allows the project to go faster based on the commitment to comply and design the following control mechanism.

Over the past two months, South Korea has been the largest investor with $1.34 billion, accounting for 37.8% of the total newly registered capital. Source: Government Newspaper

With the new regulations, this process is shortened to the maximum in terms of time - only in days, investors do not have to carry out procedures for approving investment guidelines, appraising technology, preparing environmental impact assessment reports, making detailed planning, issuing construction permits and procedures for approval.  approval and permitting in the field of construction, fire prevention and fighting. Instead, the investor will commit to implementing standards, conditions and technical regulations in accordance with relevant laws[3]. This is also the basis for state management agencies to implement the post-inspection mechanism.

In addition, the subjects of application of special investment procedures are expanded, applicable to investment projects in industrial parks, export processing zones, hi-tech parks, concentrated digital technology parks, free trade zones, international financial centers and functional zones in economic zones.  except for the project that must accept the investment policy according to the Government's regulations[4] , which is expected to be a breakthrough in Vietnam's ambition to become Asia's leading investment destination in the next decade.

3. Challenges and opportunities for businesses when implementing the new legal framework

The Law on Investment 2025 has come into effect, the investment environment is entering a new stage, and at the same time opens up both significant opportunities and challenges for the business community, especially foreign investors who are investing in Vietnam.

What are the opportunities for businesses?

It can be seen that the innovations of the LOI 2025 open up a wider development space for foreign investors in the coming period. In particular, small and medium-sized enterprises – the group that is most affected by complex business conditions will benefit when barriers are cut and the business environment becomes more transparent and stable.

The completion of the legal framework in the direction of transparency and stability while strongly prioritizing the fields of high technology, innovation and green economy, reflects the vision of development based on knowledge and technology. This orientation not only improves the quality of attracted capital flows but also opens up opportunities for Vietnamese businesses to participate more deeply in the shifting global value chain, adapting to the trend of green development, an increasingly important factor in trade and access to international markets. This is a step from attracting capital in breadth to attracting high-value-added resources.

When procedures are gradually removed and the competitive environment becomes more equal, businesses have more motivation to expand their scale, improve their management capacity and strengthen links with foreign investors through cooperation and technology transfer. If implemented synchronously and consistently, these reforms will create an important foundation for businesses to develop sustainably and improve their competitiveness in the long term.

Challenges businesses may face

In parallel with the opening and more convenient investment and business space, the Law on Investment 2025 also "tightens" the necessary stages to ensure the efficiency of resource use. The new regulations on the progress of implementation, extension and transfer of projects force investors to clearly prove their financial capacity, ability to implement and commitment to implementation from the beginning. Businesses do not have much room for project registration but are slow to implement or adjust for a long time.

Tightening management to prevent speculation, inefficient land use and waste of public resources means higher compliance pressures, requiring transparent governance and tighter progress controls. In this context, only businesses with substantive capabilities, clear strategies and effective execution will be able to take advantage of the opportunity, while those that are financially or governatively weak will face the risk of being screened out of the market.

In an effort to transform itself into a developed country, Vietnam is implementing breakthrough reforms in investment laws to optimize the business environment. The new, open and flexible legal framework system is an unprecedented foundation for domestic and foreign investors to accompany the development of Vietnam in the coming time.