Navigating Vietnam's New Investment Law 2025 and Decree 96

On 31 March 2026, the Government of Vietnam issued Decree No. 96/2026/ND-CP (“Decree 96”), implementing the Law on Investment No. 143/2025/QH15 (“Law on Investment 2025”), taking effective on the signing date, 31 March 2026. Decree 96 replaces Decree No. 31/2021/ND-CP (“Decree 31”), together with Decree No. 19/2025/ND-CP and Decree No. 239/2025/ND-CP.

Law on Investment 2025 and Decree 96 introduce new policies and regimes designated to faciliate foriegn investments and attract greater capital inflows into Vietnam. The key takeaways are as follows:
 

• Foreign investors are now permitted to establish an enterprise before obtaining an investment registration certificate for the implementation of an investment project in Vietnam;
• A new fast-track regime has been introduced for projects located in industrial zones, export processing zones, hi-tech zones, concentrated digital technology zones, free trade zones, and functional areas within economic zones (subject to certain exceptions for projects requiring investment policy approval);
• Transaction value declared in the M&A Application Dossier is reversed from “actual transaction value” to “estimated transaction value”. It is expected to address practical issues relating to the remittance and settlement of transaction prices through licensed banks in Vietnam;
• Decree 96 significantly expands the list of investment incentive sectors, reflecting Vietnam’s strategic pivot toward high technology, strategic technology, and the digital economy.

Article 72 of Decree 96 provides detailed guidance for a new investment mechanism under Article 19.2 of the Law on Investment 2025, which for the first time permits foreign investors to choose one of two pathways: (i) establish an enterprise first, then carry out the procedures for obtaining an Investment Registration Certificate (“IRC”); or (ii) carry out the IRC procedures first, then establish an enterprise.

Where a foreign investor elects to establish an enterprise prior to obtaining an IRC, the enterprise registration application must include a commitment to satisfy the market access conditions applicable to foreign investors. Within 12 months of establishment, the established enterprise must complete the procedures to obtain an IRC for an investment project corresponding to its registered business lines. 

The ERC-first pathway offers several practical benefits. It enables the investor to establish a legally recognised Vietnamese entity capable of acting in its own name at an earlier stage, thereby reducing reliance on offshore arrangements and the complexity of transferring pre-establishment contracts to the project company after incorporation. More importantly, the ERC-first approach separates company incorporation from project approval, allowing foreign investors to establish their local entity at an earlier stage and refine or finalise the scope of the investment project in parallel, rather than being required to lock in all project details upfront at the IRC stage.

Practical assessment. The ERC-first pathway is a significant facilitative reform, but its practical effectiveness remains uncertain due to several unresolved issues:
 

• 12-month deadline with unclear consequences. Decree 96 requires the IRC procedures to be completed within 12 months of incorporation, but it does not specify the consequences of failing to meet this deadline — whether the enterprise may face scope amendments, revocation, or dissolution. This gives rise to regulatory uncertainty for investors and licensing authorities alike.
• Market access assessment shifted to business registration authorities. The ERC-first pathway shifts responsibility for assessing foreign market access compliance to the business registration authority — an authority that traditionally handles straightforward company formation matters (e.g., name, address, charter capital, legal representative) within 3 working days. In practice, this may result in requests for additional explanations or evidence, extending the ERC processing timeline. It also remains unclear, both under Decree 96 and in practice, how coordination between the business registration authority and the investment registration authority will operate.
• Contractual risk and limited flexibility. Any contracts entered into between ERC issuance and IRC approval should incorporate conditions precedent and termination safeguards. Business line amendments are restricted until the IRC is granted, and the entity may not commence project implementation until IRC and other relevant investment approvals are obtained.

Following the general framework established under Article 28 of the Law on Investment 2025, Decree 96 introduces a new “special investment” fast-track for projects in industrial zones, export processing zones, hi-tech zones, concentrated digital technology zones, free trade zones, and functional areas within economic zones (subject to certain exceptions for projects requiring investment policy approval) (“SIP”). Instead of undergoing pre-licensing appraisals for construction, environmental protection, technology transfer, and fire fighting and prevention, investors submit a written commitment to comply with applicable conditions and technical regulations, including a preliminary conformity assessment. The investor bears full responsibility for any non-compliance with its commitments.

The relevant zone’s Management Board evaluates the dossier and issues the IRC within 15 working days. The IRC and commitment are then forwarded to local agencies responsible for construction, science and technology, environmental protection, and fighting and prevention for post-inspection supervision. 

Practical assessment. The SIP is one of the most significant reforms under the new regime. Notably, the SIP is now location-based across all business sectors — a significant expansion from the Law on Investment 2020, which confined it to specific sectors. By removing multiple layers of approval, including investment policy approval, technology appraisal, environmental impact assessment, detailed planning, construction permit, and fire safety appraisals — the SIP can dramatically shorten the pre-construction phase. However, investors should be aware of key practical constraints:
 

• The shift from pre-approval to self-declaration carries heightened compliance risk. Article 49 of Decree 96 provides that non-compliance may result in administrative sanctions, project suspension, or termination. Investors must therefore build robust internal compliance systems from the outset. 
• The 30-day pre-construction notification is technically a notification rather than an approval. However, there is a practical risk that the receiving authority could raise queries or objections within this window, particularly given the zone’s Management Board’s oversight role under the Law on Investment 2025. This may create informal delays. 
• The SIP does not apply to all projects in qualifying zones. Decree 96 excludes infrastructure development projects in industrial parks, export processing zones, and digital technology zones, as well as certain sensitive or large-scale projects in economic zones and free trade zones (such as projects involving cultural heritage, nuclear power, housing developments, golf courses, airports, and oil and gas processing). Investors should carefully verify eligibility before committing to the SIP pathway.

Implementing Article 8 of the Law on Investment 2025, Decree 96 issues a consolidated negative list under its Appendix I - List of sectors and business lines with restricted market access for foreign investors, divided into two categories:
 

• Section A lists 23 business lines that are not open to foreign direct investment. The core of the list remains substantially unchanged, including press activities, news collection, fishery harvesting, investigation and security services, notarisation, judicial expertise, bailiff services, state monopoly goods and services in trade, and direct domestic waste collection. 

  Notably, two previously closed defence-related lines have been reclassified as conditionally accessible under Section B: (i) production and trade of weapons, explosive materials, and support tools (item 61); and (ii) production of military materials or equipment and trade in military uniforms, supplies, weapons, and specialised military and police equipment (item 62).

• Section B lists 62 business lines with conditional access, covering inter alia telecommunications, banking, securities, insurance, aviation, maritime, energy, real estate, and education. Notably, Decree 96 introduces several new business lines compared to Decree 31, including: (i) construction activities of foreign contractors (i.e., a new standalone entry that was not separately identified in Decree 31); (ii) management and operation of intermediary e-commerce platforms, social networks operating e-commerce, and integrated e-commerce platforms; and (iii) the two defence-related business lines moved from Section A as noted above.

   

Generally, foreign investors are granted market access on the same terms as domestic investors, except for business lines listed in the above-mentioned Appendix I of Decree 96. Where multiple international investment treaties apply, the investor may choose to apply the market access conditions under one such treaty for all its business lines, provided it assumes all respective rights and obligations under that treaty. 

Comparison: Foreign Market Access – Decree 31 vs Decree 96

Practical assessment. The reclassification of the two defence-related business lines from Section A (closed) to Section B (conditional) is politically notable; however, given the sensitivity of these sectors, the extent to which this will attract meaningful foreign investments in practice remains to be seen. More impactful in practice are the new Section B entries: the platform-based e-commerce entry, which reflects regulatory catch-up with business models already operating in a grey area under Decree 31’s broader “e-commerce activities” category.

Critically, Appendix I does not, by itself, define all applicable conditions. It operates as a gateway that must be read together with sectoral legislation and international treaty commitments. A sector classified as “conditional” in Appendix I may derive its actual ownership limits from a sector-specific law, from Vietnam’s WTO commitments, or from agreements such as CPTPP or EVFTA, which may impose additional conditions beyond those stated in Decree 96 itself. For instance, data centre services, while no longer separately listed as a conditional business line under the Law on Investment 2025, remain subject to conditional regulation through their classification as value-added telecommunications services under the Telecommunications Law 2023, which permits up to 100% foreign ownership but requires a registration certificate before commencing operations. Market access analysis under Decree 96 is therefore inherently multi-layered, requiring simultaneous consideration of the Appendix I, domestic law, and international treaty commitments.

A further notable development in the M&A registration framework relates to the characterisation of the transaction value to be declared in the M&A application dossier. Under the original Decree 31, the application form for M&A registration required the applicant to declare the “estimated transaction value” (giá trị giao dịch dự kiến) of the contract for capital contribution, share purchase, or acquisition of capital contribution. This was subsequently amended by Decree No. 168/2024/ND-CP, which replaced the “estimated transaction value” with the “actual transaction value” (giá trị giao dịch thực tế) — a change that created practical difficulties in M&A transactions where the final purchase price was subject to post-closing adjustments (e.g., completion accounts, earn-outs, or other post-closing adjustments). Under Decree 96, the M&A application form has reverted to requiring only the “estimated transaction value”. 

Practical assessment. This reversion is significant for M&A practitioners. The requirement under Decree 168 to declare the “actual transaction value” was widely regarded as incompatible with standard M&A pricing practice, where the final purchase price is often subject to post-closing adjustments and is not determinable at the time of filing. Decree 96 appears to have addressed this practical constraint by reverting to “estimated transaction value”, implicitly acknowledging that the transaction value at the approval stage is indicative rather than definitive.

Decree 96 significantly expands the list of investment incentive sectors under Appendix II, reflecting Vietnam’s strategic pivot toward high technology, strategic technology, and the digital economy:
 

• Special investment incentive sectors: expanded to 16 sectors, covering high technology, strategic technology, IT, supporting industries, and environmental industries. A new category has been added for nationally important projects and key sector projects approved by the Prime Minister.
• Investment incentive sectors: science, technology, electronics, mechanics, and IT increased to 23 sectors; agriculture to 13; environmental protection and infrastructure to 25; and culture, society, sports, and healthcare restructured into 8 sectors (with human resources training for science, technology, and innovation now included).
  
  Decree 96 also introduces quantitative disbursement thresholds for special investment incentives — a new mechanism enabling the Government to prescribe enhanced incentives for projects with significant socio-economic impact. See the table below for details

Under the Law on Investment 2025, the Government is tasked with promulgating, amending, and supplementing the list of investment incentive areas based on the prescribed criteria. 

By implementing this framework, Decree 96 introduces a decentralised approach whereby provincial-level People’s Committees are authorised to determine and publicly announce investment incentive areas at the commune level. This marks a departure from the previous centralised regime under which such areas were determined and issued by the Government.

Provincial-level People’s Committees are required to report these determinations to the Ministry of Finance for monitoring and consolidation purposes. In addition, the scope of investment incentive areas has been expanded to include emerging economic models, such as concentrated digital technology zones, free trade zones, and international financial centres. 

Practical assessment. While decentralisation promises greater responsiveness to local economic conditions, it also introduces the risk of inconsistent application across provinces. Different People’s Committees may interpret the prescribed criteria differently, leading to variation in which areas are designated as incentive areas and how eligibility is assessed.

Decree 96 provides detailed transitional provisions, implementing Article 52 of the Law on Investment 2025 which establishes the overarching transitional framework. 
Key transitional arrangements include:
 

• Investment projects in industrial zones, export processing zones, hi-tech zones, concentrated digital technology zones, free trade zones, and functional areas within economic zones with valid dossiers received by the Management Board before the Law on Investment 2025 takes effect may either continue to be processed under the prior regime (Decree 31) or, at the investor’s election, be converted to the new SIP, subject to filing supplementary commitments. 
• Existing projects entitled to SIP regime under this Decree 96 but have already been granted investment policy approval or an IRC before the Law on Investment 2025 takes effect may, at the investor’s election, be converted to the new special investment procedures, subject to filing supplementary dossiers.
• Foreign-invested economic organisations established before the Law on Investment 2025 takes effect must comply with the foreign investor procedures under the new regime when adjusting existing investment projects; changing or supplementing business lines; establishing other economic organisations; investing in the form of capital contribution, share purchase, or acquisition of capital contributions in other economic organisations; or investing under a BCC contract.