Vietnam’s Law on Investment 2025 (LOI 2025) has introduced administrative reforms aimed at facilitating market entry and reducing procedural barriers. While these reforms simplify incorporation procedures, they do not eliminate the regulatory obligations applicable to certain industries.
In particular, businesses operating in conditional business sectors remain subject to statutory requirements designed to safeguard public health, national security, and environmental protection. Oversight of these sectors continues to be exercised by the relevant line ministries and sectoral regulators.
Business classification and market entry
Under the LOI 2025, the principle of freedom of business remains subject to regulatory classification. Business activities generally fall into three categories, each involving a different level of state oversight:
Ordinary sectors – not subject to investment conditions; market entry is relatively straightforward. The issuance of an Enterprise Registration Certificate (ERC) allows investors to establish a legal entity and conduct business activities in accordance with general legal requirements.
Conditional sectors – investors are required to satisfy additional statutory conditions beyond company registration. These may include obtaining sector-specific licences, meeting minimum capital requirements, or satisfying technical and professional standards.
Prohibited sectors – a limited number of activities remain entirely prohibited to private and foreign investors. These include the trade of narcotic substances, debt collection services, and the trade of electronic cigarettes.
Navigating conditional business sectors
Article 7 of the LOI 2025 defines conditional investment and business sectors as industries in which business operations must satisfy specific statutory conditions for reasons related to national defence, security, social order, social ethics, or public health. These conditions do not constitute a prohibition on investment but function as a regulatory safeguard to manage risks associated with sensitive industries.
Once a business activity falls within this category, investors must obtain the relevant approvals or sector-specific licences from the competent authorities responsible for the sector. As of 2026, the list of conditional sectors remains extensive, comprising 198 business lines administered by various ministries, including the Ministry of Industry and Trade, the Ministry of Health, and the Ministry of Information and Communications.
Post-licensing: the continuing burden of compliance
A key feature of the LOI 2025 reforms is the increased emphasis on post-licensing supervision. While administrative procedures for establishing a company have become more streamlined, regulatory authorities place greater focus on ensuring ongoing compliance after a business has been registered.
This approach is particularly relevant to conditional business sectors. In practice, the issuance of an ERC establishes a company’s legal presence but does not automatically authorise business operations in sectors subject to investment conditions. Investors must continue to obtain any required sector-specific licences or approvals before commencing commercial activities.
In addition, certain industries continue to maintain elements of pre-operation licensing, requiring investors to obtain additional permits, professional certifications, or regulatory approvals prior to conducting business.
Failure to comply with applicable regulatory requirements may expose businesses to significant legal risks. Administrative sanctions may include monetary fines, suspension of operations, or revocation of licences, depending on the severity of the violation. Beyond financial penalties, non-compliance may also damage a company’s reputation and restrict its ability to expand in the Vietnamese market.
Final thoughts
Vietnam’s investment reforms in 2026 aim to facilitate business establishment while maintaining regulatory safeguards in sensitive sectors. Although administrative procedures have become more efficient, lawful operations ultimately depend on compliance with sector-specific regulatory requirements. For investors entering the Vietnamese market, understanding the interaction between general investment regulations and industry-specific licensing regimes remains essential to achieving sustainable and compliant business operations.
