Vietnam’s 2026 Urban Development Law: What Strategic Investors Need to Know

Vietnam’s Law on Urban Development gives foreign investors a route to seek strategic investor status for qualifying projects in Ho Chi Minh City and other cities covered by the special-grade urban centre regime. Priority projects include specialised healthcare facilities, waste incineration plants that generate electricity, semiconductor manufacturing, and free trade zone infrastructure. Investors should assess the minimum capital and equity requirements alongside the deadlines for disbursing funds and the restrictions on transferring a project.

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Vietnam’s National Assembly adopted Law No. 18/2026/QH16 (Law on Urban Development) on 24 August 2026. The law generally took effect on 1 October 2026. Its special-grade urban centre mechanisms apply to Ho Chi Minh City and other qualifying cities. Hanoi follows the Law on the Capital. The law also sets out a separate regime for formally recognised special economic zones, with different investment thresholds and incentives.

Which projects qualify for strategic investor selection?

To qualify for consideration, a project must fall within a priority category and meet the applicable minimum investment threshold. The statutory thresholds range from VND 800 billion for certain projects involving special national historic sites in special administrative areas to VND 75 trillion for port terminals in free trade zones. Urban development projects involving coastal reclamation must meet separate government criteria.

Priority Projects and Minimum Investment Thresholds for Strategic Investor Selection
Selected priority project	Minimum total investment capital
Innovation and research and development (R&D) centres, and qualifying high-tech research and technology transfer projects	VND 3 trillion
Semiconductor, advanced electronics, next-generation battery, and other specified high-tech industrial projects	VND 30 trillion
Integrated premium resort and entertainment complexes that meet statutory service requirements	VND 30 trillion
Specialised healthcare facilities	VND 5 trillion
Elderly care facilities	VND 2 trillion
Redevelopment or relocation of housing on or alongside rivers and canals	VND 6 trillion
Waste incineration plants that generate electricity	VND 2 trillion
Drainage infrastructure	VND 3 trillion
Remediation and redevelopment of closed landfill sites	VND 10 trillion
Projects in priority urban development areas identified in the city’s master plan	VND 50 trillion
Industrial, urban, or service zones within a free trade zone	VND 20 trillion
Integrated logistics zones within a free trade zone	VND 25 trillion
Port terminals within a free trade zone	VND 75 trillion

The city People’s Council can update the priority list and set local selection criteria and procedures within the statutory framework. Investors should check the city’s current list and any project-specific notice when screening a site.

How much equity must a strategic investor contribute?

A sole strategic investor must contribute at least 20 percent of total investment capital for projects below VND 30 trillion and 15 percent for projects of VND 30 trillion or more. For example, a sole investor in a VND 25 trillion integrated logistics zone would need at least VND 5 trillion in equity.

For consortium projects, the investors’ combined equity must meet the same project-level minimum. The law also requires at least one member to contribute at least 30 percent and each remaining member to contribute at least 15 percent. The provision does not expressly specify the calculation base for those member-level percentages. Consortium members should confirm it with the competent authority before finalising their funding commitments. Separate equity rules apply to projects with multiple components or investment phases, except for commercial housing projects.

Investors must also provide written commitments covering workforce training and development, national defence and security, and environmental protection. For closed landfill redevelopment, they must commit to remediating soil and groundwater contamination before changing the site’s use and to monitoring and controlling environmental impacts during redevelopment.

How are strategic investors selected?

An investor or a competent state authority can propose a priority project. The selection process depends on whether it proceeds as a business investment or a public-private partnership (PPP).

Strategic Investor Selection for Business Investment and PPP Projects
Project type	One qualifying investor	Two or more qualifying investors
Business investment	The chair of the city People’s Committee approves the investment policy and the investor in the same decision.	If another qualifying investor submits a valid application for the same site within seven working days of receipt of the first valid application, the chair issues scoring criteria and establishes a selection council.
Public-private partnership (PPP)	The competent authority approves the selection of the qualifying investor.	If another qualifying investor submits a valid application for the same project within seven working days of receipt of the first valid application, the chair issues scoring criteria and establishes a selection council. The investor with the more suitable proposal is selected.

PPP legislation governs project preparation, appraisal, approval, and contracting.

Ho Chi Minh City has used the business investment route to invite proposals for a specialised healthcare cluster in Binh Dong ward. The proposed development combines geriatric care, rehabilitation, and long-term elderly care, with estimated investment exceeding VND 6 trillion. The city asked proponents to demonstrate financial capacity, relevant experience, and a viable investment plan.

What incentives can strategic investors access?

• Project term of up to 70 years: Eligible projects with total investment capital of at least VND 30 trillion can qualify for a term of up to 70 years. Commercial housing projects are excluded from this provision. Urban development projects involving coastal reclamation can qualify for the same maximum operating term under a separate provision.
• Priority customs and tax procedures: Strategic investors can qualify for priority treatment for goods imported or exported for projects they implement in the city. The law waives import and export turnover requirements and any applicable time requirements for priority treatment. Other eligibility conditions apply, and customs procedures must be handled by the customs unit responsible for the city.
• Project support: The law provides for support for workforce development, social infrastructure, high-tech products, and R&D. The city People’s Council may adopt additional incentives or support measures.
• Land allocation for free trade zone infrastructure: The chair of the city People’s Committee can allocate or lease land for specified free trade zone infrastructure projects without a land-use rights auction or an investor selection tender. Commercial housing projects are excluded.
• Corporate income tax incentives in special economic zones: From the 2027 tax year, qualifying strategic investments in recognised special economic zones can receive the same preferential treatment as projects in areas with exceptionally difficult socioeconomic conditions. For eligible new projects, the preferential rate period may be extended by up to five years. Special economic zones also have a different equity threshold. The minimum project-level equity contribution falls from 20 percent to 15 percent at VND 10 trillion in total investment capital, compared with VND 30 trillion under the special-grade urban centre regime.

Investors should confirm which measures apply to their project before including them in financial projections.

What disbursement deadlines and project transfer restrictions apply?

For strategic investment projects in special-grade urban centres, the disbursement deadlines and project transfer restrictions run from the date the project land or sea area is physically handed over. The applicable periods depend on the project’s total investment capital.

Disbursement Deadlines and Transfer Restrictions by Project Size
Total investment capital	Disbursement and completion requirements	Project transfer prohibition
Below VND 30 trillion	Disburse the full investment capital within 5 years	5 years
VND 30 trillion to below VND 50 trillion	Disburse the full investment capital within 7 years	7 years
VND 50 trillion to below VND 100 trillion	Disburse the full investment capital within 10 years	10 years
VND 100 trillion or more	Disburse at least VND 50 trillion within 10 years and complete investment and construction in line with the project schedule, within a maximum of 20 years	10 years

Coastal reclamation projects follow separate transfer rules. Investors may transfer an entire project only after completion. A partial transfer must comply with investment and real estate business laws and may cover up to 50 percent of the reclaimed land area where the framework technical infrastructure has been completed.

Strategic investors that fail to meet capital, disbursement, or other eligibility requirements lose access to incentives and support under the strategic investor mechanism. The city People’s Council can set rules on penalties, repayment of incentives or support already received, and project termination.

Before committing capital, foreign investors should confirm that the project falls within a priority category, check sector-specific market access conditions, and verify the site’s availability and permitted use. They should align financing commitments with the expected handover date and statutory disbursement deadline. Consortium members should agree on how to fund each phase and cover any funding shortfall before submitting a proposal.