Giving up regulatory powers to make way for businesses

Vietnam's administrative reform drive is gathering pace as the government seeks to remove regulatory barriers, reduce compliance costs and create more room for businesses to operate.

According to a report Prime Minister Le Minh Hung presented to the National Assembly, the time required to complete administrative procedures has fallen by 53%, while compliance costs have declined by approximately 55%, equivalent to VND23 trillion (about $875 million) annually.

The government describes these as the largest reductions achieved to date.

"The government will continue to thoroughly review, eliminate and simplify administrative procedures and business conditions to reduce costs and create a favorable, transparent and accessible environment for people and businesses," the Prime Minister pledged.

Cutting administrative procedures also means asking regulatory agencies to relinquish some of their approval powers and removing reasons for businesses to seek official permission.

That is no simple undertaking. Every agency can offer an explanation for why its particular procedures are necessary.

Last week, a legal affairs officer at a major Vietnamese private conglomerate told me, with evident excitement, that his company had just received an overseas investment registration certificate.

The entire process, from submitting the application to receiving approval, had taken less than two weeks.

He described the turnaround as a record.

Previously, the company had wanted to invest in artificial intelligence, the digital economy and other sectors in the United States and several developed countries, but its plans had been held back by extensive administrative requirements.

He showed me the documents.

"I already have the investment certificate in my hands. We're extremely excited," he said.

The company initially plans to invest $60 million to $70 million, with the possibility of doubling that amount later.

The breakthrough is linked to Vietnam's amended Investment Law of 2025, which took effect in March 2026.

The law eliminated the requirement to obtain in-principle approval for overseas investment, although investment registration certificates remain mandatory for projects subject to registration requirements.

Removing one administrative approval stage has allowed the company to reconsider investments that had previously been put on hold.

Plans once abandoned because of regulatory obstacles are now back on the table.

Thousands of stalled projects cleared to proceed

According to the government's report, Vietnam identified 5,012 projects facing difficulties or regulatory obstacles, with combined registered investment of approximately VND3.69 quadrillion.

As of September 27, 2026, obstacles affecting 71% of those projects had been resolved.

Among them, 2,121 projects, representing approximately VND1.79 quadrillion in investment, had been cleared to continue implementation.

These figures do not mean that the entire investment amount has already entered the economy.

They do, however, indicate that projects previously held up by administrative or legal complications can move forward.

For projects that cannot continue, recovering the land or terminating the investment can also create opportunities to put idle resources back into productive use.

Resolving a stalled project often requires coordination among several agencies, sometimes involving disputes or legal complications that have persisted for years.

Officials responsible for removing those obstacles must also accept accountability for their decisions.

That gives the resolution of thousands of projects significance beyond the headline figures.

Dau Anh Tuan, Deputy Secretary General and Head of the Legal Department at the Vietnam Chamber of Commerce and Industry (VCCI), described the pace of institutional change in striking terms.

"Institutions are being rewritten at an unprecedented speed," he said.

In 2025, the National Assembly passed 89 laws, 5.7 times the annual average recorded between 2020 and 2024.

A total of 120 laws were adopted during 2024 and 2025, exceeding the combined number passed over the preceding eight years.

Resolution 206/2025/QH15 also introduced a special mechanism enabling the government to address difficulties arising from existing legal regulations.

According to Tuan's update, 26 resolutions had been issued under this mechanism over 14 months.

The Prime Minister's report to the National Assembly stated that the government had removed 56 conditional business sectors and eliminated 1,754 business conditions.

Requirements that companies were previously obliged to meet have been abolished, while some activities that once required approval can now proceed without it.

As regulators relinquish approval powers, businesses gain greater autonomy.

The government also reported that 774 administrative procedures had been restructured under Resolution 66.7/2025/NQ-CP to replace paper documentation with existing digital data.

The principle is straightforward: citizens and businesses should not be required to resubmit information already held by government agencies.

People would undoubtedly welcome no longer having to obtain a document from one office merely to submit it to another.

If information already exists in a government database, why should citizens have to travel between agencies instead of having those agencies exchange the information themselves?

I support the Prime Minister's efforts to accelerate these reforms.

Businesses need capital, markets and opportunities to expand. At the very least, unnecessary requirements imposed by regulatory authorities should be removed as quickly as possible.

Companies have already acknowledged improvements.

According to figures presented by Tuan, the proportion of businesses describing online administrative procedures as easy to complete rose from 57% in 2021 to nearly 90% in 2025.

Meanwhile, the share reporting that administrative processes were carried out exactly as publicly prescribed increased from 29% in 2022 to 75% in 2025.

More efforts needed to turn reforms into results

Despite these improvements, VCCI surveys indicate that businesses continue to face significant administrative obstacles.

Tuan said 50% of companies dealing with land-related procedures had been forced to postpone or cancel business plans.

Meanwhile, 55% of land-related applications took longer to process than the legally prescribed deadlines.

When paperwork remains unresolved, loans may be delayed and production plans put on hold.

Businesses must still retain employees, maintain customer relationships and cover operating expenses, even when their projects cannot proceed.

Their customers, however, may not be willing to wait.

"Every month of delay means a portion of invested capital generates no return, pushing up the incremental capital-output ratio (ICOR)," Tuan observed.

VCCI's Business Law Flow 2025 report found that, among 787 acknowledged regulatory difficulties, 42% arose from provisions that were unclear, open to multiple interpretations or impractical to implement.

Ambiguous regulations create difficulties for businesses while also making officials reluctant to issue decisions.

Preparations for implementing new legislation must also keep pace with the laws themselves.

Tuan cited the Chemical Law, which took effect on January 1, 2026, although its implementing decree was not issued until January 17.

During that interval, some local authorities temporarily stopped accepting applications.

Containers carrying raw materials were stranded at ports, incurring storage charges of $80 to $120 per container per day.

While companies waited for official guidance, those charges continued to accumulate.

Problems also persist at the implementation stage.

Approximately 38% of businesses reported paying unofficial fees when applying for licenses.

Meanwhile, around 62% said provincial departments and commune- or ward-level authorities had failed to properly implement the policy directions of provincial leaders, based on the median figure across Vietnam's 34 provinces and cities.

Even well-designed policies require consistent implementation.

When businesses submit applications, they want straightforward answers: what documents are required, what steps must be completed and when they can expect a decision.

Tuan highlighted differences between localities.

In Dong Thap Province, 69% of businesses received all required documents within one week, compared with a nationwide figure of 40%.

If the same legal framework applies everywhere, why have other localities not achieved similar results?

"Should implementation be measured by official reports or by businesses' actual experiences?" Tuan asked.

A procedure that has been abolished should disappear from application requirements altogether.

When a deadline arrives, citizens and businesses should receive their results without having to seek personal connections or favors.

Vietnam wants its private enterprises to grow, invest in technology and contribute to the country's ambition of becoming a high-income economy by 2045.

Those ambitions will have a better chance of being realized if businesses no longer spend excessive amounts of time seeking administrative approvals.

I still remember the excitement of the legal affairs officer who showed me his newly issued overseas investment certificate.

He was so delighted by the speed of the process that he called it a record.

When we meet again, I hope he will have nothing remarkable to tell me about obtaining permits, because getting the necessary paperwork will have become an ordinary, predictable part of doing business.

Tu Giang