On 11 November 2025, the Government submitted to the National Assembly the Draft Law on Investment (“Draft 2”) with several key adjustments compared to the Draft Law on Business Investment circulated for comments in September 2025 (“Draft 1”), as well as the current provisions of the Law on Investment 2020.
With Draft 2 expected to be passed and take effect from 01 January 2026, enterprises/investors should pay close attention in order to develop and/or adjust their investment plans effectively and in compliance with the new regulations. Below, ATA Legal Services provides updates on some notable new points of Draft 2 based on comparisons with the current Law and Draft 1 that we previously discussed.
1. Returning to the name “Law on Investment” instead of “Law on Business Investment”
In Draft 2, lawmakers have returned to the “familiar” name, the Law on Investment, instead of the Law on Business Investment. This change is reasonable as the business community and legal practitioners in Vietnam have long been familiar with the term “Law on Investment.” Moreover, the name “Law on Investment” already distinguishes it from the “Law on Public Investment” and sufficiently reflects the nature of investment as being for business purposes, without needing the additional phrase “Business” attached.
2. Additional removal of certain conditional business investment sectors
In addition to the sectors proposed to be removed in Draft 1 (rice export; temporary import–re-export of frozen food; accounting; labor outsourcing; automobile warranty/maintenance; construction activities of foreign contractors; building and repairing ships/vessels; art performance services, fashion performance, beauty contests; cremation services; overseas study consultancy; money printing/minting services), Draft 2 removes several more sectors currently classified as conditional business sectors under the Law on Investment 2020, notably:
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Judicial expertise services;
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Bailiff services (replaced with Enforcement Officer services);
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Tax procedure services;
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Construction project management consultancy services;
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Data center services;
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Cosmetic surgery services;
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Import/export, breeding, transplantation, processing… of rare animals/plants.
In our view, these sectors already fall under specialized regulations and are subject to supervision by relevant specialized authorities. Therefore, the removal in Draft 2 merely helps reduce procedures with the investment registry authority when establishing businesses or implementing investment projects—not a complete “liberalization” of these sectors.
Some sectors proposed for removal under Draft 1 remain in the list of conditional business sectors, including:
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Trading of goods and activities directly related to the sale of goods by foreign service suppliers in Vietnam;
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Employment services;
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Research, manufacture, testing, repair, maintenance of unmanned aircraft, other flying vehicles, their engines, propellers, and related equipment;
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Film dissemination services.
3. Greater authority granted to the Government and the Prime Minister in investment decisions
– Authority to decide investment incentives and support measures beyond those provided in the Law
Compared to the Law on Investment 2020 and Draft 1, Draft 2 grants more authority to the Government and the Prime Minister to determine additional forms of incentives and support measures outside those stipulated in the Law to encourage and promote investment projects or investment activities in Vietnam.
Accordingly, the Prime Minister (instead of the Government as in Draft 1) is authorized to decide additional forms of investment incentives beyond those in the Law. The Government and the Prime Minister may also determine new forms of investment support. In principle, this provides highly flexible mechanisms for the Government and the Prime Minister to adjust economic governance according to practical needs.
– The Government decides investment policies for projects requiring special mechanisms or policies differing from provisions of laws or resolutions of the National Assembly and its Standing Committee
Draft 2 introduces fundamental changes compared to the Law on Investment 2020 and Draft 1:
a. Removal of the National Assembly’s authority to approve investment policies (for both domestic and outbound investment); reducing central-level authority so that only significant or specially required projects are decided at the central level, while most others are delegated to local authorities.
b. The Government becomes the authority to approve investment policies for projects requiring special mechanisms or policies different from existing legal provisions.
c. The Prime Minister will approve investment policies for projects that previously required National Assembly approval, such as:
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Conversion of special-use forest land, watershed protective forest, border protective forest of 50 ha or more;
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Conversion of windbreak/sandbreak/coastal protective forests of 500 ha or more;
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Conversion of production forest land of 1,000 ha or more;
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Conversion of two-crop wet rice land of 500 ha or more.
d. At the local level, instead of the provincial People’s Committee as before, investment policy approval authority is now vested in the Chairperson of the provincial People’s Committee.
Overall, Draft 2 streamlines procedures, strengthens accountability of individual decision-makers, and creates flexibility to attract investment in strategic sectors. However, the Law does not clearly specify risk control or accountability mechanisms related to appraisal and decision-making, which, in our view, will require further review to ensure effectiveness and sustainable development.
4. Adjustment of investment incentive sectors and geographic areas aligned with future economic development directions
Draft 2 identifies incentivized sectors based on general development goals rather than sectoral titles as in the current Law. Alongside traditional priorities (agriculture, education, healthcare, key industries, supporting industries), new highlighted goals include:
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Science, technology, innovation;
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Green economy, circular economy;
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Cluster-based industrial linkages and value chains;
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Clean and renewable energy.
Regarding incentivized geographical areas, Draft 2 adds new locations aligned with existing National Assembly resolutions, such as:
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Free trade zones;
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International financial centers.
Industrial clusters are also recognized as incentivized areas to support SMEs, consistent with Resolution 68 on private sector development.
5. Allowing project timelines to be extended up to 24 months before requiring investment policy adjustment
Draft 2 maintains the spirit of Draft 1 by removing two cases requiring policy adjustment (changes in total investment capital and technology). Investors only need to adjust investment policy if the project timeline is extended by more than 24 months (where extension is legally permitted).
However, Draft 2 retains the requirement to adjust investment policy when changing investment objectives, location, or land-use scale.
6. Retaining Draft 1 provisions for outbound investment: Abolishing outbound investment policy approval and removing certificate requirements for small-scale projects
Draft 2 continues Draft 1’s approach but adds stricter conditions:
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Outbound investment projects with capital not exceeding VND 20 billion and not in conditional outbound investment sectors are exempt from obtaining an Outbound Investment Registration Certificate.
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Projects from VND 20 billion upward or in conditional sectors require only the Certificate (no policy approval step).
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The Ministry of Finance may delegate authority for issuance, amendment, and revocation of outbound investment certificates to its subordinate units.
7. Investors may only be approved after two unsuccessful land-use right auctions
Under the Law on Investment 2020 and Draft 1, only one failed land auction was sufficient to proceed with investor selection. While convenient, this sometimes led to issues of competitiveness or transparency, especially for investors with insufficient preparation time.
To ensure fairness, Draft 2 stipulates that only after two unsuccessful auctions may the competent authority proceed with investor approval. This gives all investors a more even opportunity to participate.
8. Clarifying beneficiaries of special investment incentives and support
Draft 1 proposed granting special investment incentives/support (higher than standard incentives) to projects with significant socio-economic impacts but left identification of qualified projects to the Prime Minister.
Draft 2 still assigns authority to the Prime Minister but narrows the qualifying scope, covering:
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New establishment of innovation centers, R&D centers, large-scale data centers, cloud infrastructure, 5G+ mobile infrastructure, and other strategic tech infrastructure;
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Projects in strategic technologies with investment capital of VND 3,000 billion+, with minimum disbursement of VND 1,000 billion within 3 years;
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National innovation centers;
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Projects related to digital technology products, semiconductor design/production/packaging/testing, AI data centers meeting requirements of VND 6,000 billion+ and disbursement of VND 6,000 billion within 5 years;
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Other projects (new or expansion) in specially incentivized sectors meeting capital scale and disbursement conditions as defined by the Government.
With these developments—many of which represent significant breakthroughs, especially the delegation of broader investment decision-making powers to the Government, the Prime Minister, and local officials—Draft 2 is expected to help create a more open yet disciplined investment environment, thereby enhancing Vietnam’s attractiveness to both domestic and foreign investors.
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