The Law on Investment 2025 has just come into effect on March 1, 2026 but has continued to face a new amendment in a short time. This development reflects the need to quickly institutionalize new orientations in investment attraction and management, especially shifting from simple capital attraction to selecting quality capital flows, from incentives based on input conditions to support mechanisms associated with actual results, and at the same time strengthening project governance throughout the life cycle.
In an exchange with Ho Chi Minh City Radio and Television (HTV) on September 25, 2026, Managing Partner Nguyen Van Phuc, representative of HM&P Law Firm ("HM&P"), shared about the notable adjustments of the Second Draft Amendment to the Investment Law 2025, and analyzed issues related to market access conditions, investment incentives and support mechanisms, decentralization to localities as well as the interests of active projects.
Managing Partner Nguyen Van Phuc, HM&P Law Firm
Why does the Law on Investment continue to be amended?
According to Lawyer Phuc, the fact that the Law on Investment 2025 continues to be proposed to be amended in a short time mainly stems from the requirement to quickly institutionalize new orientations for the development of the foreign investment sector. The policy is shifting from attracting capital at scale to selecting quality projects, from incentives based on initial commitments to support associated with actual results and strengthening project management throughout the implementation process. The draft therefore adds many notable mechanisms, from easing market access conditions in some industries and professions to supporting supply chain development, human resource training, research and development, as well as outstanding incentive packages for projects with great impact.
However, besides the request to quickly institutionalize new orientations, Lawyer Phuc also noted the quality and stability of this amendment. Lawyer Phuc shared:
"Urgency should not become a reason to ignore legislative quality. The issue of concern is not just a second amendment, but whether this amendment is ripe enough to limit the possibility of further amendments in the short term. When preferential policies, decision-making authority and transitional clauses are open, accelerating progress can create a loop: the law that has just been enacted has to be corrected because of problems that have not been fully identified."
Expanding room to attract investment but needs a clear control mechanism
One of the notable contents of the Draft is the proposal to give more initiative to the Government in easing market access conditions for foreign investors. According to Lawyer Phuc, this mechanism can help Vietnam respond more flexibly to the movement of international capital flows, but the scope of jurisdiction, criteria for selecting industries and trades and conditions for application must be clearly defined to avoid the situation that a document under the law actually changes the content specified in the law.
Along with that, the transition to a preferential and support mechanism based on the results of the implementation of commitments also requires measurable criteria. According to Lawyer Phuc, the value of the project needs to be assessed through actual results such as disbursed capital, technology transferred, trained human resources, domestic added value and the level of participation of Vietnamese enterprises in the supply chain. For outstanding support packages, the criteria should not only be based on the size of capital but need to consider more technology, research and development, human resource training and the ability to create a spillover impact on the economy.
Ensuring stability for active projects
In addition to the new mechanisms, Lawyer Phuc said that the transitional clause is one of the most important issues of the Draft because it has a direct impact on the rights and obligations of projects that have been licensed or are being implemented. Accordingly, the new regulations should not be applied retroactively to the detriment of investors; at the same time, it is necessary to clearly delineate how to handle projects that are enjoying incentives, expansion projects or cases where investors voluntarily switch to a new support mechanism.
As for the outcome-based incentive mechanism, the Draft is currently designed mainly for projects approved after the new law takes effect. Lawyer Phuc said:
"This approach is in line with the established requirements to protect the interests of investors; existing projects should only be subject to new commitments when implementing the expanded investment, voluntarily switching to a new mechanism or receiving additional incentives and supports after the law takes effect."
At the end of the discussion, Lawyer Phuc said that the important point of this amendment lies not only in the addition of investment attraction and support mechanisms, but also in the way those mechanisms are designed and implemented in practice. Clearly defining the application conditions, evaluation criteria, support limits and transition mechanisms will be the foundation for new policies to be effective in attracting high-quality capital flows and ensuring the interests of projects that have been operating in Vietnam.
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