During a meeting on amending the Investment Law on September 18 at the Party Central Committee Headquarters, Party Chief To Lam directed strict adherence to Resolution No 68 dated May 4, 2025, by the Politburo on private economic sector development. The goal is to create a transparent, stable, safe, easy-to-implement, low-cost, and internationally competitive business environment, while addressing existing “bottlenecks” and facilitating enterprise development.

Regulations on business investment conditions must reflect the shift from pre-inspection to post-inspection, coupled with enhanced monitoring and supervision. Setting conditions for specific industries or professions should only be justified by reasons of national defense, security, social order, public safety, social ethics, or community health, with all other conditions drastically reduced in line with the Party and State policies.

The designation of prioritized investment sectors should fully encompass policies on renewable energy, nuclear energy, and new energy development as outlined in the Politburo’s Resolution No 70 dated August 20, 2025, on ensuring national energy security by 2030, with a vision to 2045.

VietNamNet spoke with respected economist Nguyen Dinh Cung on the “institutional bottlenecks” in the draft Investment Law currently under public consultation.

Part 1:

Why is the mechanism of approving investment policies and registering investments considered a unique “specialty” of Vietnam, and what legal bottlenecks does it create for the investment-business environment? How do you think the draft Investment Law (amended) should be redesigned to align with international practices and remove these barriers?

The mechanism for approving investment policies and registering investments is indeed a legal “specialty” of Vietnam. It is seen only in Laos and Myanmar, while even China, with its traditionally tight control, has reformed and abolished it to align with international practices. 

No country in the world imposes the pre-inspection mechanism for market entry on most investment projects as we do. This is the biggest, most pervasive legal bottleneck and likely the greatest barrier to mobilizing and allocating resources for development.

The draft Investment Law (amended) still maintains a cumbersome and contradictory project classification mechanism. 

It divides projects into two groups: (i) those not requiring investment policy approval, and (ii) those requiring it. 

Within group (ii), some projects are granted a “special privilege” of only needing investment registration without approval. This approach essentially involves “selecting to grant”, which means that the state allows certain projects to be exempt from procedures, while the mechanism has not existed in the world for a long time, and the global trend is “selecting to exclude,” meaning only a few high-risk projects require control.

In my view, the draft should be rewritten with a more thorough reform mindset. Specifically, it should introduce three clear categories:

Projects that require neither approval nor registration

Projects that only require registration

Projects that must get investment policy approval

Currently, the draft fails to clarify whether projects that do not require approval must still register, or whether projects that have been approved must also register again. These ambiguities result in redundant procedures, reduce legal predictability, and increase compliance costs.

The most viable reform is to retain only a narrow list of projects under the PM’s approval authority. All other projects should be exempt from both approval and registration. This is consistent with international practices and helps minimize “ask-give” relationships while freeing up resources for development.

In short, by requiring state approval for both the goals and scale of investment, the law interferes with business autonomy. It lacks clear regulatory purpose yet imposes unnecessary and unpredictable barriers, raising costs, distorting the market, and causing missed opportunities for investors.

The Enterprise Law and the draft Investment Law currently define “business” and “business investment” differently. What legal consequences does this inconsistency cause for businesses and the investment environment?

The Enterprise Law clearly defines “business” and previously covered “conditional business fields and conditions” prior to 2014. However, when these provisions were later moved to the Investment Law and broadened into “conditional business investment fields,” the concept became vague and inaccurate, which adds unnecessary barriers to business operations in Vietnam.

The Enterprise Law uses a broad definition of “business” that includes the full process, from investment, production, and to sale of goods and services for profit. Meanwhile, the Investment Law defines “business investment” narrowly as “putting in capital to conduct business activities.” Here, “business” becomes merely an adjective to distinguish it from “non-commercial investment.” Thus, “business investment” is only a small part of the broader “business” definition in the Enterprise Law.

to be continued....

Tu Giang - Lan Anh