Vietnam: Rising, resilient, and ready for growth

Vietnam is increasingly drawing the attention of international investors as it enters its next stage of economic development. In this three-part series, we examine Vietnam’s changing investment landscape, opportunities and considerations for foreign investors and the evolving private capital scene. 

This first article looks at Vietnam’s latest regulatory reforms and what they mean for market entry, sector opportunities and ongoing compliance. Look out for the next two articles in the series, or follow Withers on LinkedIn here to be notified when they are published.

Vietnam's next chapter

Vietnam is entering a new phase in its foreign investment policy. For much of the last four decades, its investment story has been built on economic opening, manufacturing growth, trade integration and cost competitiveness. Since the Đổi Mới reforms of 1986, Vietnam has moved from a centrally planned economy towards a more market-oriented model integrated with global trade and capital flows. The World Bank describes this transformation as one of the most remarkable development stories in recent decades: GDP per capita rose from under US$700 in 1986 to nearly US$4,500 in 2023. Vietnam’s accession to the World Trade Organization ("WTO") in 2007 further cemented its integration with global markets. By the end of 2024, Vietnam hosted 42,002 foreign direct investment ("FDI") projects, with cumulative registered capital of approximately US$502.8 billion and realised capital of around US$322.5 billion.

The question, therefore, is not whether Vietnam can attract foreign capital. It demonstrably can. The more important question is whether its regulatory and investment framework can support higher-quality, longer-term and more sophisticated capital.

The answer emerging from Vietnam’s latest legislative programme is a cautious but promising 'yes'. With the latest update to  Vietnam's regulatory framework, with Decree 96/2026/ND-CP ("Decree 96") replacing Decree 31/2021/ND-CP ("Decree 31"), Vietnam is making pragmatic steps to attract FDIs by reducing entry barriers, providing fast-track implementation options, decentralising certain approvals and concentrating incentives on specific strategic sectors; particularly in advanced technology, semiconductors, green infrastructure, logistics and, with particular policy attention being paid to financial services within the international finance centres ("IFCs"). Vietnam is not stepping back and de-regulating everything; rather in selected sectors and for qualifying projects, it is repositioning part of the regulatory burden from ex-ante approval towards ongoing supervision, reporting and compliance after business operations have commenced.

From entry gatekeeping to supervised operation

Vietnam’s foreign investment framework was historically 'front-loaded' - investors had to resolve key licensing, approval and market-access questions before meaningfully commencing operations. Investment registration, enterprise registration, sub-licensing, conditional business-line checks, foreign ownership analysis and local authority engagement affected market-entry timing and certainty, with the State exercising significant control over investments permitted in the country. For foreign investors, this created execution uncertainty. 

Recent reforms seek to reduce market-entry risk and uncertainty for qualifying projects, signalling a policy shift towards facilitating FDI whilst retaining regulatory oversight through ongoing reporting, inspection, compliance supervision and sector-specific enforcement.

This shift can be seen in three broad developments.

1.  Market access

Market access continues to be framed through a negative-list approach. Law No. 143/2025/QH15 (the "Law on Investment 2025"), reaffirms that foreign investors are generally entitled to market-access conditions like domestic investors, except where they fall within the list of sectors and trades in which foreign investors are subject to market access conditions. Foreign investors can now begin their market-entry analysis by checking whether their proposed business activities fall within this list. Activities not caught under the list are generally treated as open to foreign investors, subject to applicable treaty commitments, sector-specific licensing and operational requirements. 

The Law of Investment 2025 which took effect on 1 March 2026, also narrows the list of sectors and trades which are subject to conditional business investment, with the revised list taking effect from 1 July 2026. Conditional business lines may require additional licensing, minimum capital, professional qualifications, technical standards or other approvals before operation, so  this is a welcome move to lower entry barriers in selected service and technology sectors. New categories have been introduced to enable (i) construction activities carried out by foreign contractors, (ii) management and operation of intermediary and integrated-commerce platforms, as well as social networks with e-commerce.

The 'negative list' methodology is helpful in M&A and JV transactions where a company’s business description may not always match legal classification. A technology platform may operate within a regulated sector, a fintech business may overlap with payments, lending, data, cybersecurity and securities. A logistics operator may be open to foreign investment in some business lines but remain subject to conditions in others. That said, where a sector is no longer conditional, investors must nonetheless continue to comply with operational regulations, consumer protection requirements, tax obligations, labour law, data protection and sectoral reporting. 

1. The "Green Channel" and the shift from pre-check to post-check

Decree 96/2026/ND-CP introduces special investment procedures for eligible projects in specified sectors and locations. These procedures are applicable to investment projects in industrial parks, export processing zones, high-tech parks, concentrated information technology parks, free-trade zones and other specified sectors.  Decree 96 follows the general framework established under Article 28 of the Law of Investment and is intended to streamline the investment registration process for qualifying projects in specified sectors and locations. Investors may no longer need to fully resolve certain construction, environmental and fire safety matters before the Investment Registration Certificate is issued - the special procedure now allows investors to submit commitments to meet these conditions, together with a preliminary conformity assessment. The Investment Registration Certificate is then issued by the relevant Management Board, with the certificate and investor commitments transmitted to the relevant local regulatory authorities, and the investor will then need to subsequently satisfy the requisite procedures within a 12-month period.

This is a meaningful conceptual shift from pre-check to post-check. Eligible projects may now proceed on the basis of commitments rather than fully resolved approvals, potentially compressing the licensing timeline for qualifying investors in priority sectors such as high technology, semiconductors, innovation centres and research and development ("R&D"). For eligible projects, the Investment Registration Certificate may be issued within 15 working days from receipt of a valid application dossier, compared with ordinary approval processes, which may take several months. Procedural streamlining is achieved through investor commitments and post-licensing supervision. The 30-day pre-construction notification is technically a notification rather than an approval but it is possible that the receiving authority could raise queries or objections within these 30 days. 

Speed, however, comes with clear accountability. Decree 96 provides that investors must implement projects in accordance with their Investment Registration Certificate and commitments. If a project fails to satisfy the committed conditions, technical regulations or standards, the competent authority(ies) may impose administrative penalties, stop or terminate the project, and/or take other legal measures. Management boards, investment authorities and specialised authorities are also tasked with supervising and assessing implementation within their respective functions. 

Investors must therefore treat their commitments as substantive compliance obligations rather than administrative formalities and carefully review commitments before submission.
 
 Article 28 is not the only place the Law on Investment 2025 speeds things up for foreign investors — it just speeds up the project side. On the entity side, Article 19.2 does something similar.
 
 A foreign investor does not need a finished project to get a presence in Vietnam anymore. Under Article 19.2 of the Law on Investment 2025, it can incorporate first — get its Enterprise Registration Certificate — and sort out the Investment Registration Certificate within 12 months of establishment, as long as it's entering a sector already open to foreign investors under the applicable market access rules. Practical implementation remains relatively new and local licensing practice needs to be verified on the ground. 
 
 Nonetheless, the company can be up and running long before the project it was formed to carry out is actually approved, which carries real practical advantages. 

1. Sector-specific priorities and investment opportunities 

Vietnam has historically used location-based incentives to encourage investment in less-developed areas or designated zones. That remains relevant but investment policy is now more sector-focused and strategically looks at advanced technology, semiconductors, R&D, green transition, digital infrastructure, with additional policy emphasis on financial services within the IFCs. Industrial upgrading is a priority.

Advanced technology, semiconductors and R&D

Advanced technology and semiconductors are strategic priorities in Vietnam's next stage of industrial development. This is reflected in Vietnam's Semiconductor Industry Strategy, which aims to ultimately position Vietnam as a world-class leader in the semiconductor and electronics industries by 2050, as well as in the special investment procedure for qualifying projects in areas such as innovation centres, R&D centres, semiconductor integrated circuits, chip design and manufacturing, semiconductor materials and other prioritised high technologies. Vietnam is seeking to move beyond traditional manufacturing into higher value, research-intensive and technology-driven investment. The special investment procedure is particularly relevant in this context as high-tech investors often require speed, site certainty, infrastructure readiness and predictable approval pathways before committing their funds.  Vietnam is looking beyond competing only as a low-cost manufacturing base but as a more strategic participant in regional and global technology supply chains.  

Green finance, power and renewables

Energy transition is another central pillar. Resolution 222/2025/QH15, which establishes the framework for the IFCs in Ho Chi Minh City and Da Nang, supports a framework in which sustainable and green finance are policy priorities within those hubs, and contemplates products and services relevant to those areas such as green finance and carbon credits.

Vietnam is therefore not only seeking to attract renewable energy projects. It is also looking to develop financial infrastructure relevant to the energy transition, potentially including green bonds, sustainable finance products and related transition-supporting mechanisms, although the detailed implementation framework remains important. For investors, the opportunity extends beyond project development into green financing, carbon credit trading, climate risk insurance, risk management and advisory services. The development of sophisticated finance infrastructure enhances credibility and accelerates market confidence in establishing Vietnam as a regional hub for sustainable finance. 

Capital markets, fund management and digital finance 

Resolution 222 identifies a broad range of financial products and services that may be offered within the IFCs, including stocks, bonds, fund certificates, financial derivatives, fund management, insurance and reinsurance, banking and foreign exchange. It also expressly identifies fintech and digital assets and defines a financial sandbox mechanism in Da Nang that allows new financial business models and technologies to be tested within a defined scope and timeframe under the special supervision of an executive body. 

Various tax incentives have been introduced. IFC members enjoy a reduced corporate income tax rate of 10% for 30 years for projects in priority sectors and 15% for 15 years in other sectors; personal income tax exemptions for IFC member employees have also been extended. IFC members are also able to enjoy greater flexibility in managing offshore accounts and cross-jurisdictional payment transfers and are allowed to transact in foreign currencies. Preferential tariffs are also applied to imported and exported goods and services. 

This is a significant policy move. Vietnam’s FDI model has traditionally been heavily manufacturing-led but the IFC framework evidences an ambition to build a sophisticated financial-services ecosystem involving capital markets, asset management, insurance, foreign exchange, fintech and digital assets. The sandbox mechanism, which provides temporary compliance exemptions and liability waivers for state-related damages, is particularly relevant in showcasing Vietnam's intent in not only deepening traditional financial markets but in creating a supervised environment for technology-enabled financial innovation.

Resolution 222 also states that the IFCs should operate according to advanced international standards, connect with major global markets and financial hubs, enable connection between domestic and international exchanges, promote investment capital flows and develop technology-enabled financial services. Ho Chi Minh City is central to this, given its existing commercial and financial depth in capital markets and digital finance, and Da Nang will serve as a hub for green finance and regulatory sandboxes.

Manufacturing, logistics and investment ready infrastructure 

Vietnam’s policy direction increasingly favours higher-value, greener and better-financed production. Logistics, trade finance, supply-chain finance, warehousing, payment infrastructure and insurance are important parts of the ecosystem around Vietnam's manufacturing base. Infrastructure and land readiness underpin all of this. 

Decree 96’s special investment procedure is tied to projects in designated investment locations, including industrial parks, export-processing zones, high-tech zones, centralised information technology zones, free trade zones and functional zones of economic zones. This reinforces the importance of planned, serviced and administratively prepared investment locations.

Resolution 222 further provides that certain fees and charges arising from the operation of the IFCs may be retained by local budgets of Ho Chi Minh City and Da Nang for up to ten years for investment in hub infrastructure, after deducting operating costs. This reflects an understanding that legal reform alone is not enough: financial centres and strategic projects also require physical, digital and administrative infrastructure and improvements. 

Capital scale and disbursements 

Law on Investment 2025 introduces disbursement requirements to prevent abuse of schemes to attract FDI. For example, actual capital injections are required prior to investors being able to enjoy investment incentives to prevent investors from relying on paper capital.  

Investor lens

Vietnam’s regulatory pivot is strategic, positive and welcome but not risk-free. Investors should remain alert on four fronts.

1. Regulatory classification remains critical. The negative-list framework gives a clearer starting point but investors still need to carefully map actual business activities against registered business lines, licences and sectoral rules. This is particularly important for technology, fintech, logistics, education, healthcare, retail, data and financial services businesses, where commercial descriptions and legal classifications frequently diverge.
2. Compliance risk has moved 'downstream'. Decree 96 illustrates this: investors may now move faster on the basis of commitments but commitments are subject to supervision and enforcement. Compliance review should be built into the transaction timeline from the outset and not treated as a post-closing thought or task.
3. Vietnam’s improving investment environment reduces but does not remove the need for careful financial, legal and technical due diligence. In PE and VC transactions, disputes frequently arise from mis-matched expectations between foreign investors and local founders (particularly in family-owned or founder-led businesses) around governance rights, reporting obligations, exit mechanisms, transparency and the legal effect of investment documents. Cross-border investment risk is not limited to licensing or market access; it may also arise from differences in commercial expectations, governance culture and parties’ understanding of how investor rights operate after closing. Transaction documents should be 'localised' and advisors with on-the-ground experience engaged to ensure smooth dealings with Vietnamese counterparties – template form term sheets often do not work.
4. Resolution 222 provides that disputes between IFC members, or between an IFC member and an outside investor relating to IFC investment and business activities, may be resolved by the IFC’s International Arbitration Centre. Where the relevant parties have agreed in writing, the decision recognising a successful mediation result, decision or arbitral award of the IFC International Arbitration Centre is final and valid, and the parties may waive the right to request the court to annul the award or decision.

Ready for the next wave

Very few naysayers will say it is not Vietnam's time to shine. Vietnam's vibrant economic landscape offers exciting opportunities for investors in one of the world's fastest emerging economies. Alongside M&A transactions which continue to play a key role in gaining market entry through minority investments, strategic acquisitions and private equity deals, entry into selected sectors is now faster, more structured and predictable, but legal and compliance obligations are often back-loaded. 

Despite the reforms, investors should not assume that Vietnam has become a lightly regulated market. Investors must continue to conduct proper due diligence and obtain legal and tax guidance on regulatory classification, licensing, land and environmental commitments, foreign ownership limits, data and cybersecurity, employment, tax, dispute resolution and governance.

Changes to Vietnam’s investment framework

At Withers, our international funds and corporate teams support MNCs, fund managers, investors and private wealth clients on tax and legal structuring in investments into Vietnam and the broader APAC region. We have Vietnamese language capabilities in our Singapore office and while we are not licensed to practise Vietnamese law, we routinely work with Vietnamese-qualified counsel when Vietnamese law advice is required.