Key Legal Changes from July 1, 2025: Impact on FDI in Vietnam

New Laws from 01/07/2025: How FDI in Vietnam is Changing?

Starting July 1, 2025, a series of new regulations under Vietnam’s Enterprise Law, Investment Law, and their guiding decrees will officially come into force. These changes are considered a strategic move by Vietnam to enhance transparency, attract high-quality FDI, and create a more efficient business environment.

Here is a summary of the key impacts on foreign direct investment (FDI) activities:

Key Changes for FDI Investors

1. Ownership Transparency: The “Beneficial Owner” (BO) Rule

Effective July 1, 2025, the amended Enterprise Law (Law 76/2025/QH15) and Decree 168/2025/ND-CP will require companies to declare their Beneficial Owners (BOs). A BO is an individual who directly or indirectly owns 25% or more of the charter capital or has significant control.

• Impact: This increases transparency in ownership structures, aligning with global anti-money laundering standards. However, it poses a significant challenge for international corporations with complex, multi-tiered ownership structures.

2. “Special Procedures” for High-Tech Projects

Decree 19/2025/ND-CP introduces special investment procedures for FDI projects in high-tech zones, semiconductor manufacturing, and R&D.

• Impact:

  • Time Reduction: Licensing time will be drastically shortened to approximately 15 days, compared to the previous 6-12 months.

  • Flexibility: Procedures like environmental impact assessments and construction permits can be processed after the investment license is issued.

  • This is a strong move to attract “tech giants” amidst the global supply chain shift.

3. Limits on Debt-to-Equity Ratio for Bond Issuance

The amended Enterprise Law now caps the debt-to-equity ratio at 5:1 for companies issuing private corporate bonds.

• Impact: This regulation aims to stabilize Vietnam’s financial market and increase credibility. However, it may limit the financial flexibility of newly established FDI businesses.

4. Expanded List of Conditional Investment Sectors

New technologies like Big Data, AI, Drones, and Blockchain have been added to the list of conditional investment sectors as of July 1, 2025.

• Impact: Provides clearer policy guidance on technical and legal requirements for investors, helping them with business planning.

5. Administrative Digitization

Starting July 1, 2025, legal representatives of FDI companies must use a Level 2 e-ID VNeID account for online investment, tax, and customs procedures. Real-time POS electronic invoices will also be widely implemented.

• Impact: Streamlines administrative processes but requires foreign investors to adapt to Vietnam’s new digital systems.

Recommendations for FDI Investors

To adapt and capitalize on these changes, investors should:

• Review their ownership structures to ensure accurate and timely BO declarations.

• Prioritize projects in high-tech sectors to benefit from special investment procedures.

• Prepare their systems to comply with electronic invoicing and other digital requirements.

• Consult with experts to adjust financial planning and ensure compliance with debt limits.

Conclusion

The new regulations taking effect on July 1, 2025, demonstrate Vietnam’s commitment to improving the quality and sustainability of its FDI inflows. While there may be initial adaptation challenges, these changes will make Vietnam a more attractive and reliable destination for strategic investors worldwide.