Dear Clients and Partners,
The investment landscape in Vietnam has undergone a transformative shift with the implementation of the Law on Investment 2026. This new regulatory framework is designed to streamline administrative procedures, foster a more "pro-business" environment, and align Vietnam with global standards. However, as with any major legislative change, the transition from the 2020 framework to the 2026 regime presents both immense opportunities and significant risks.
At BLaw Vietnam, we have observed that while the new law ostensibly simplifies the "Investment Policy Approval" (IPA) process, it also introduces nuanced requirements that can trap the unwary. Understanding these nuances is critical for businesses looking to optimize their market entry or expansion strategies. Through the following article, we will guide you through the latest changes and, more importantly, how to avoid the most common pitfalls that could stall your capital injection.
1. The Strategic Shift: ERC Before IRC
Historically, foreign investors in Vietnam were required to obtain an Investment Registration Certificate (IRC) for their specific project before they could establish a legal entity (the Enterprise Registration Certificate or ERC).
Under the 2026 Law on Investment, this sequence has been reversed. Foreign investors can now:
- Obtain an ERC first: Establish the economic organization to handle preparatory activities like leasing an office, hiring staff, and signing initial contracts.
- Apply for an IRC: Once the entity is formed, the project-specific scrutiny occurs.
While this sounds like a simplification, the pitfall lies in preparatory liability. Investors often assume that since they have an ERC, they have the "green light" to operate. In reality, without the IRC, you are technically an entity with no authorized project. Ensuring that your initial corporate governance documents align with your future IRC requirements is a task that requires expert corporate governance counseling.
2. Narrowing the Scope: Who Actually Needs Policy Approval?
One of the most praised aspects of the 2026 reform is the narrowing of the Investment Policy Approval (IPA) requirement. Previously, a wide range of projects required approval from the National Assembly, the Prime Minister, or the Provincial People’s Committee.
In 2026, the IPA is primarily reserved for:
- Critical Infrastructure: Seaports, airports, and large-scale power plants.
- Sensitive Sectors: Telecommunications, journalism, and publishing.
- National Security: Projects in border areas or those affecting national defense.
For most manufacturing and service-oriented businesses, the separate IPA layer is removed, and you move directly to the IRC/ERC stage. However, the trap here is the "Deceptive Simplicity" pitfall. Just because you don't need a Policy Approval doesn't mean you don't need Sectoral Licenses. For instance, if you are in the fintech or education space, while you may bypass the IPA, you still face rigorous licensing from the State Bank of Vietnam or the Ministry of Education and Training.
3. The "Green Lane" Opportunity
The 2026 regime introduces expanded "Green Lane" or fast-track procedures. These are specifically tailored for projects located within:
- Industrial Parks (IPs)
- Export Processing Zones (EPZs)
- Hi-tech Parks
- Digital Technology Zones
Projects in these zones benefit from shorter statutory timelines and centralized "one-stop-shop" administrative support. Leveraging these zones can significantly optimize your time-to-market. To understand if your project qualifies, you can refer to our detailed guide on IRC and ERC simplification.
4. Avoiding the 4 Biggest Pitfalls in the 2026 Process
Pitfall #1: The Timeline Trap (Statutory vs. Reality)
The Law on Investment 2026 lists statutory timelines for approvals (often ranging from 15 to 45 days). However, these deadlines only begin once a "valid dossier" is accepted.
- The Reality: Authorities may request multiple rounds of clarifications or additional documents (environmental impact assessments, fire safety certificates, etc.) before the clock even starts.
- The Solution: Build a 30-50% time buffer into your project roadmap. Never sign binding commercial supply contracts that rely on the statutory minimum approval date.
Pitfall #2: Overlooking Sector-Specific Overlays
Even if the general Investment Law streamlines your path, sectoral laws (like the Law on Credit Institutions or the Law on Telecommunications) remain supreme in their respective fields.
- The Risk: You might obtain your IRC but find yourself blocked at the land-use stage or unable to get a sub-license because your corporate structure doesn't meet specific sectoral capital requirements.
- The Solution: Perform a dual-track legal audit. At BLaw Vietnam, our knowledgeable attorneys analyze both general investment rules and specific sectoral requirements to ensure a seamless end-to-end process.
Pitfall #3: Outbound Investment Missteps (Decree 103/2026)
For Vietnamese entities looking to invest abroad, Decree 103/2026/NĐ-CP has significantly changed the game.
- The Threshold Change: The threshold for Prime Minister approval for outbound capital has been raised to VND 1,600 billion.
- The Compliance Trap: Small-scale projects (under VND 7 billion) in non-conditional sectors are exempt from obtaining an Outbound Investment Registration Certificate (OIRC). However, they are not exempt from foreign exchange (FX) and tax reporting.
- The Solution: Ensure your tax settlement records are impeccable. Vietnamese authorities often require proof of tax compliance before authorizing outbound capital flows.
Pitfall #4: Transition Issues for "In-Flight" Projects
If you started your application under the 2020 law but it is still pending in 2026, you face a transitional grey area.
- The Confusion: Some local departments may insist on the old IRC -> ERC sequence, while others may allow you to switch to the new "ERC First" model.
- The Solution: Seek formal written clarification or a legal opinion. Using the wrong sequence mid-process can lead to "administrative limbo" where neither the old nor new systems recognize your filing.
5. How BLaw Vietnam Protects Your Investment
Navigating the 2026 Investment Policy Approval process requires more than just reading the law; it requires local insight and a proven track record. We offer a comprehensive suite of services to ensure your project stays on track:
- Tax Optimization: Our excellence in tax settlements ensures that your investment structure is not only compliant but also cost-effective from day one.
- M&A and Corporate Finance: If your investment involves acquiring local assets, our M&A expertise will guide you through the due diligence and valuation stages.
- Regulatory Liaison: We act as your bridge to the Ministry of Planning and Investment (MPI) and local Departments of Planning and Investment (DPI), managing the "informal" timeline and dossier clarifications.
Conclusion: A Consultative Approach to Success
In addition to the regulatory relaxations, the 2026 framework demands a higher level of precision in documentation and strategic planning. The "Green Lane" is only open to those who have prepared their dossiers with surgical accuracy.
By identifying potential risks early: from UBO disclosure to environmental compliance: you can turn the 2026 Law on Investment into a competitive advantage rather than a hurdle.
Are you ready to streamline your investment in Vietnam?
Our team of highly qualified attorneys is here to ensure your approval process is efficient and error-free. Contact BLaw Vietnam today for a comprehensive consultation tailored to your specific industry needs.
Sincerely,
The BLaw Vietnam Team