KEY UPDATES IN INVESTMENT PROCEDURES THAT FOREIGN INVESTORS NEED TO KNOW

On September 5, 2025, the Government issued Decree No. 239/2025/ND-CP amending certain provisions of Decree No. 31/2021/ND-CP guiding the Law on Investment. These changes have a direct impact on investment procedures, required documents, and investment conditions. For foreign investors, staying updated is essential to ensure a smooth and timely process when applying for an investment registration certificate, extending projects, or implementing infrastructure projects.

1. Legal Basis

• Law on Investment 2020 (Effective from January 1, 2021)
• Decree No. 31/2021/ND-CP: Stipulating details and guiding the implementation of the Law on Investment
• Decree No. 239/2025/ND-CP: Amending and supplementing certain articles of Decree No. 31/2021/ND-CP (Issued on September 5, 2025)

2. Key Amendments

The noteworthy amendments include:

• Determination of Investment Incentive Areas based on the two-tiered local government model

• • • Previously, Article 21 of Decree 31/2021 stipulated the principles for determining investment incentive areas when a new administrative unit was established (due to division, separation, or upgrade) at the district level, but it was not clearly applied to the commune level in the two-tiered model.
    • Decree 239/2025 now supplements regulations to clearly apply the determination of investment incentive areas to newly established communes within the two-tiered model.
    • Specific principles:
      • If the newly established commune was previously (part of) a commune (belonging to a district) identified as a severely disadvantaged socio-economic area, the new commune is still determined as severely disadvantaged, and similarly if it was merely “disadvantaged”.
      • If the new commune is formed from multiple communes with varying socio-economic conditions: determination is based on the majority of the original communes enjoying incentives. If the number is equal, priority is given to the severely disadvantaged socio-economic condition. If there is parity between “disadvantaged” and “non-incentivized,” the determination will be “disadvantaged”. If there is parity between “severely disadvantaged” and “non-incentivized,” it will be “severely disadvantaged”.
    • The Provincial People’s Committee (PPC) is responsible for determining and publicly announcing the investment incentive areas and severely investment incentive areas at the commune level, and submitting the information to the Ministry of Finance for monitoring and synthesis.

• Removal of the regulation prohibiting project extension for certain projects due to machinery exceeding 10 years of age

• • Previously, pursuant to Point b, Clause 10, Article 27 of Decree 31/2021: projects using machinery and equipment under HS Codes in Chapter 84 and 85, if their age exceeded 10 years, or if they failed to meet national technical standards regarding safety, energy efficiency, and environmental protection, were deemed to use outdated, pollution-prone, resource-intensive technology and were ineligible for extension of their operational term.
  • The amendment removes the requirement regarding age exceeding 10 years. This is replaced by requirements concerning the machine’s efficiency or capacity remaining below 85% of the original design, or the consumption rate of raw materials, supplies, and energy exceeding 15% compared to the original design. 
  • In the absence of national technical standards, the national standards of Vietnam, or the national standards of one of the G7 countries, or South Korea, must be applied concerning safety, energy efficiency, and environmental protection criteria.
• Amendments to regulations on investment, construction, and business of infrastructure in industrial parks (IPs), export processing zones (EPZs), high-tech zones, concentrated digital technology zones, and economic zones (EZs)

Key points:

• The construction and business of infrastructure must comply with the construction planning of the IP, EPZ, or concentrated digital technology zone approved by the competent authority.
• For areas facing socio-economic difficulties: The Provincial People’s Committee (PPC) may submit to the Prime Minister a decision on establishment or assign a public service unit with revenue to act as the investor for the construction and business of infrastructure projects in IPs, EPZs, etc..
• Investors undertaking activities such as constructing factories, offices, and warehouses (for sale or lease); setting rental prices for land, sub-leasing land, offices, factories, warehouses, infrastructure usage fees, and other service charges: must register the price framework and the infrastructure usage fees with the Management Board of the Industrial Park, Export Processing Zone, High-Tech Zone, Concentrated Digital Technology Zone, or Economic Zone. This registration of the price framework must be done periodically every 6 months or when there is an adjustment different from the registered price framework.

3. Impact on Investment Procedures, Dossiers, and Conditions for Foreign Investors

The amendments introduced in Decree 239/2025/ND-CP clarify and streamline the investment process for foreign investors.

Firstly, the new regulation on determining investment incentive areas based on the two-tiered government model helps investors accurately identify which areas are eligible for incentives, thus mitigating the risk of establishing projects in locations with unclear policies.

The removal of the 10-year age limit for machinery, replaced by efficiency and consumption criteria, enables FDI enterprises to readily utilize effective equipment that meets international standards, thereby increasing their ability to extend and deploy projects.

Furthermore, the requirement for periodic registration of the price framework and infrastructure fees with the IP Management Board enhances transparency, helping foreign investors budget for more stable costs when leasing land, factories, and infrastructure.

Finally, assigning the PPC the task of announcing and monitoring incentive areas will shorten the time required for research and document preparation, ensuring that procedures are processed centrally and swiftly.

4. Recommendations for Foreign Investors

The amendments introduced by Decree 239/2025/ND-CP indicate the Government’s intention to streamline procedures, enhance transparency, and align with international practices.

For foreign investors, three key points require attention:

• Proactively update investment incentive policies in the project area: The clear determination at the commune level allows for more accurate policy forecasting. Investors should regularly monitor announcements from the Provincial People’s Committee (PPC) to leverage opportunities for tax and land incentives.
• Review machinery and equipment standards prior to application submission: Although the 10-year age barrier is removed, enterprises still need to demonstrate performance and consumption rates according to national or international standards. Therefore, preparing technical documents and quality certificates from the manufacturer will facilitate rapid dossier approval.
• Comply with infrastructure price framework registration: If the investor is the infrastructure developer of an IP or high-tech zone, attention must be paid to the periodic registration procedure. If the investor is a sub-lessee, this registration should be used as a basis for transparent negotiation of infrastructure leasing contracts, avoiding unexpected cost increases.

5. Impact on State Management Agencies

Decree 239/2025/ND-CP not only affects businesses but also places higher demands on management agencies. Provincial People’s Committees must proactively determine, announce, and update the list of incentive areas; Management Boards of Industrial Parks and Economic Zones must regularly receive, appraise, and publish the infrastructure price framework. Thus, management responsibilities become clear and transparent, reducing overlapping functions and prolonged processing times for applications.

6. Notes on Investment Dossier Preparation

To capitalize on the advantages of the new decree, foreign investors should note the following:

• Prepare documentation proving the performance and technical standards of machinery in accordance with international regulations.
• Clearly define the project location and consult the information announced by the Provincial People’s Committee to incorporate incentive policies into the application dossier.
• For infrastructure investors, it is necessary to plan for the periodic registration of the price framework and fees to prevent procedural errors from delaying project progress.

7. Conclusion

Decree 239/2025/ND-CP marks a significant step forward in reforming investment procedures in Vietnam. The new regulations help create a clearer, more transparent legal framework, while simultaneously expanding opportunities for foreign investors, especially in manufacturing, infrastructure, and technology sectors. Timely updates, comprehensive dossier preparation, and strict adherence to regulations will be the key for FDI enterprises to shorten licensing times, reduce incurred costs, and enhance investment efficiency in Vietnam.

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