Vietnam’s Special Investment Procedure: Implementation and Implications for Foreign Investors

Vietnam has introduced a policy to accelerate investment project approvals – Decree 19/2025/ND-CP (“Decree 19”), effective from February 10, 2025. This decree establishes a special investment procedure that drastically streamlines the investment licensing process, aiming to attract high-quality capital, especially in high-tech industries.

In essence, Decree 19 provides detailed guidance for the newly added Point a, Article 36 of the Law on Investment, amended by Law No. 57/2024/QH15. The update has significantly reformed Vietnam’s investment policy framework. This article explores the new policy, its implications, and how it alters earlier procedures. We also analyze its impact on investors, particularly foreign investors, as well as the opportunities it creates in priority sectors.

Overview

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Decree 19 introduces a special fast-track investment procedure designed to replace or override certain steps in the traditional investment approval process for eligible projects. It is an implementing decree that clarifies and expands on a new legal provision (Article 36a) added to Vietnam’s Investment Law.

If any earlier regulations, issued before January 15, 2025, conflict with Article 36a and Decree 19, the new rules prevail going forward. This decree provides a faster alternative route for specific projects. The traditional procedures under the Investment Law 2020 and Decree 31/2021/ND-CP still apply to projects outside the special scheme; however, qualifying projects can now opt for this expedited process.

Key differences between the old and new procedures include:

• Shorter timelines: Investment registration approvals are now set within 15 days, compared to the 6-12 months typically required under the traditional process, representing up to a 75 percent reduction in approval time.
• Fewer pre-approvals: Under the new special procedure, investors no longer need to separately obtain a host of permits and approvals, such as a construction permit, environmental impact assessment, or fire safety certificate, before starting the project. The cumbersome upfront paperwork and overlapping approvals have been streamlined away.
• Shift to post-approval: The special procedure relies on investors’ commitment to comply with technical standards and regulations, with government oversight happening after project commencement rather than before.
• Replacing capital verification with guarantees: The new decree simplified investment capital requirements by allowing the use of bank guarantees or commitment agreements instead of capital contribution verification processes. Investors must still provide a deposit or guarantee to ensure project implementation, but this mechanism is much clearer and tied to the project’s accomplishments.

Eligible investors and priority projects under the special procedure

 The scope of application of Decree 19 encompasses both domestic and foreign investors undertaking qualifying projects. The impetus behind the term, however, is largely to attract foreign direct investment (FDI) in cutting-edge sectors. Vietnam is positioning itself as a competitive destination for global investors in high-tech and innovation, making this policy particularly relevant for foreign companies seeking to set up or expand operations in Vietnam’s strategic industries.

The decree limits the projects that are eligible by specifying priority fields and zones for the special procedure. The criteria for the sector and location are as follows:

• High-tech industry and R&D: Projects located in high-tech parks and meeting the criteria for high-tech projects as outlined in the Law on High Technology, along with more detailed criteria, can be found in this article; and
• Projects in special zones: Investment projects that are in the industrial park, export processing zones (EPZs), concentrated information technology (IT) zones, free trade zones, or functional zones within approved economic zones.

Simplified investment approval process

For projects that meet the criteria, Decree 19 revolutionizes the investment approval process, making it faster and more straightforward. The new fast-track process for obtaining an Investment Registration Certificate (IRC), which is the core license to implement an investment project, can be summarized in a few streamlined steps.

Preparation of the IRC application

The investor prepares a dossier as specified in Article 36a, which includes these main documents:

• Declaration of implementation commitment: A formal statement from the investor affirming compliance with all applicable laws and regulations on construction, environmental protection, and fire prevention and fighting;
• Preliminary project suitability assessment: A self-prepared document by the investor outlining how the proposed project aligns with applicable legal conditions, technical standards, and safety regulations;
• Investor commitment letter: A signed declaration confirming the investor’s full commitment to meet all regulatory requirements, refrain from prohibited activities, and assume full responsibility for any breach of the stated commitments;
• Legal status documents of the investor: Supporting documents verifying the investor’s legal identity and capacity, such as business registration certificates for organizations, or personal identification for individuals;
• Detailed investment project proposal: A comprehensive project outline including objectives, scale, proposed location, total investment capital, implementation timeline, land use requirements, selected technologies, and environmental protection measures;
• Proof of investor eligibility (if applicable): Any additional documentation confirming the investor’s eligibility status, required in certain special cases as per applicable laws; and
• Supplementary documents (if required): Additional documents that may be necessary depending on the nature, scale, or location of the project, or as requested by the competent authority.

Submitting and processing the dossier

Investors are required to submit one complete set of application documents to the management board of the respective industrial park, export processing zone, high-tech park, or economic zone for the purpose of registration and obtaining an IRC, in accordance with relevant legal provisions.

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Then, the management board will be responsible for examining and appraising the submitted dossier and issuing the IRC in line with the law. The processing time for licensing is minimized to the shortest legally permitted duration.

Upon issuance, the IRC and the investor’s signed commitments will be simultaneously forwarded by the board to the relevant state management agencies responsible for construction order, environmental protection, and fire safety in the project’s locality, to facilitate coordinated oversight and supervision.

Post-licensing guarantees and implementation

Once the IRC is obtained, the investor moves into the implementation phase, but must fulfill an investment project security obligation. Decree 19 requires investors to provide a deposit or bank guarantee as assurance that the project will be executed as committed. The deposit amount is typically from one to three percent of the project’s capital, depending on the project’s scale.

The timing for posting this guarantee depends on the project’s land status. For example, the investor may need to deposit after receiving the IRC but before the state issues a land lease decision or before starting any land clearance compensation, or within 30 days of the IRC if land is already allocated. This requirement is not new, as Vietnam has long asked investors to post deposits for projects that require state-allocated land. However, under the special procedure, it is reinforced as part of ensuring that only serious investors benefit from fast-track approvals.

Commencing construction with notice (no separate construction permit)

A major simplification under Decree 19 is that eligible projects do not need to obtain a construction permit in the traditional way, provided the investors adhere to technical standards. Instead, before starting any construction, an investor must submit a “construction commencement notice” at least 30 days in advance.

This notice is sent to the local construction authority and the zone’s management board and must include two key documents as specified in the law:

• A techno-economic construction investment report for the project, essentially a technical design and feasibility report, which the investor itself prepares and approves in accordance with construction laws; and
• An independent verification report by qualified experts certifying that the project’s design meets safety, environmental, and fire protection standards.

Once the notice and attached documents are submitted, the project works can proceed without a traditional permit, speeding up the groundbreaking.

Environmental licensing simplified

For projects that would typically require an environmental impact assessment (EIA) report under environmental laws, Decree 19 provides an exemption at the investment registration stage, in which investors are not required to prepare a full EIA report when applying under Article 36a. Instead, the investor’s initial proposal only needs to include a preliminary environmental impact analysis and mitigation measures as part of their commitments.

Formal environmental licensing or registration may still be required in the future, but it does not delay the investment licensing process. This change enables projects to commence sooner, with environmental compliance monitored in parallel, rather than incurring upfront delays.

Ongoing compliance and monitoring

After the project starts, the investors must comply with all committed standards and regulations during implementation. The fast-track approval does not waive substantive obligations, while it only defers their detailed vetting to the implementation stage.

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Investors must perform self-monitoring and evaluate their project’s progress and compliance. Concurrently, state authorities, including the management board and specialized agencies for construction and the environment, will conduct their required supervision and inspections.

Decree 19 mandates that, in the event of any issues or violations, authorities may enforce corrective measures or penalties in accordance with the law. Investors remain fully liable for meeting their commitments. Failure to do so can result in administrative fines, suspension of operations, or even revocation of the project in severe cases.

Investment guarantee refund

As the project progresses toward tangible milestones, the investor is rewarded for compliance through the staged refund of their deposit or guarantee. Upon commencement of construction, once the investor has duly submitted the required notice and technical documents, 50 percent of the deposit is returned.

After the project is built and ready for operation, the investor submits the completion acceptance report for the construction. At that point, the remaining deposit and any interest are returned in full (or the guarantee is released).

Impact on investors

For investors, especially foreign companies, the new special investment procedure is largely bringing positive impacts. It addresses many pain points that have historically affected foreign direct investment in Vietnam. By simplifying and accelerating the process, Vietnam aims to offer a more competitive, transparent, and investor-friendly environment.

Speed and certainty

Under the new decree, the turnaround time for obtaining an investment project license is significantly faster. A process that once took up to a year can now be completed in two weeks or less, providing investors with greater certainty in planning.

Reduced administrative burden

Investors can avoid jumping through multiple regulatory hoops upfront. The special procedure consolidates several steps into one, thereby reducing paperwork and procedural duplication. It not only saves time but also lowers costs for investors, who would otherwise spend significant resources on consultants and compliance documentation for each permit.

Greater flexibility to launch projects

Under the traditional regime, investors often had to wait for all approvals before even breaking ground, incurring delays. Now, they can commence project implementation immediately upon receiving the IRC, relying on their own preparations and quality control. This flexibility enables them to start construction and other activities at their own pace, provided they adhere to standards.

Opportunity to tap incentives in priority sectors

By targeting high-tech and innovative projects, the policy aligns with areas where Vietnam also offers various incentives, such as tax holidays, R&D support, etc. Foreign investors entering these priority sectors under the special procedure stand to benefit from both faster entry and any available government incentives for high-tech industries.

The decree also signals Vietnam’s commitment to these sectors, which can improve investor confidence. In the long run, streamlined entry for high-tech projects may foster clusters.

Opportunities and priority industries benefiting from the reform

Decree 19 is a strategic move by Vietnam to capitalize on shifting global investment trends. By fast-tracking certain projects, Vietnam is effectively courting investments in specific high-value industries that the government has prioritized for development. Business professionals and legal advisors should note the sectors that are poised to benefit the most from this policy reform.

High-tech manufacturing

Under today’s economic environment and geopolitical shifts, global semiconductor firms are looking to diversify their supply chains. Vietnam’s fast-track approval for semiconductor plants in high-tech parks can attract these firms by cutting through bureaucratic delays. Likewise, manufacturers of advanced electronics, such as flexible electronics and related materials, stand to benefit. The decree complements existing efforts to develop electronics supply chains in Vietnam, offering an incentive for companies to set up fabrication facilities, assembly lines, or R&D centers quickly in industrial zones.

AI and innovation center

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The AI sector and other innovation-driven projects are encouraged as Vietnam aims to become a hub for AI research, software development, and tech startups by making it easier to establish R&D hubs and innovation centers. Multinationals or research institutions focusing on AI, machine learning, and data centers can benefit from expedited approvals, particularly if they locate in high-tech parks or IT zones designed for such industries.

The broader category of “high-tech industries” prioritized by the government (as per Decision 38/2020/QD-TTg of the Prime Minister) encompasses not only AI and semiconductor technology but also areas such as biotechnology, new materials, renewable energy technology, and other Industry 4.0 technologies.

R&D and training center

The decree shortens the time required to establish facilities, enabling companies to launch R&D laboratories, testing centers, and training facilities in Vietnam. For example, a foreign automotive or aerospace firm developing new technology could quickly set up an R&D unit in a Vietnamese high-tech zone. This could, in turn, facilitate local knowledge transfer and skill enhancement. By designating “innovation centers and R&D hubs” as eligible projects, the government aims to enhance Vietnam’s image as a hub for innovation rather than just a low-cost manufacturing site.

Others

In addition to the above sectors, by accelerating high-tech projects, Vietnam could see job creation in skilled sectors and an overall upskilling of its workforce as more advanced industries take root. The reform could also lead to ancillary opportunities in construction, logistics, and professional services such as legal, engineering, and consulting to support the influx of projects being implemented on tighter timelines.

Domestic investors in these priority fields will also benefit from the new procedures. However, the reform’s primary goal is to attract foreign investment with expertise and capital in cutting-edge industries. Vietnamese tech entrepreneurs and companies may find it easier to start large-scale projects if they base them in an eligible industrial park, leveraging the same fast-track rules. This could encourage public-private partnerships or joint ventures, where domestic firms team up with foreign tech partners to launch projects under the special regime.

Conclusion

Vietnam’s Decree 19 represents a landmark policy shift in the country’s investment landscape. For foreign investors, it opens the door to faster entry and expansion in one of Asia’s most dynamic markets, particularly in sectors like semiconductors, AI, and advanced manufacturing. The advantages, including reduced bureaucracy, lower costs, and quicker time-to-market, can be game-changing for companies looking to relocate or initiate new projects in Vietnam.

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