The special investment procedure Vietnam adopted in the Law on Investment No. 143/2025/QH15 changes the legal character of a factory licence. On the standard track the State approves first and the investor builds afterwards. Under Article 28, the investor registers, signs written undertakings, and the State inspects afterwards. The environmental impact assessment and the construction permit fall away.
For deal counsel, the consequences go beyond speed. The documents lenders treat as conditions precedent may no longer exist. The investment registration certificate (IRC) becomes, in part, a record of promises made by the investor, and liability for non-conformity moves from “the authority approved it” to “the investor undertook it”.
This article analyses eligibility, exemptions, residual permits, transaction mechanics and risk, so that counsel can advise an investment committee on whether the special investment procedure Vietnam suits a manufacturing project.
Article 28 Law on Investment: statutory basis
The Law on Investment No. 143/2025/QH15 (“LOI 2025”) took effect on 1 March 2026. Article 28 establishes the special investment procedure Vietnam now offers as a distinct route to an IRC for projects in designated zones. Implementation detail sits in Decree 96/2026/ND-CP; the provisions governing the Article 28 dossier and timeline should be confirmed against the full text [Verification Required].
An optional, registration-based track
Article 28 is elective. Where chosen, the project is not subject to investment policy approval, technology appraisal, environmental impact assessment, detailed planning or a construction permit. In their place the investor gives written undertakings, notifies the construction authority before construction (Article 28.3), and uses the IRC as the basis for land allocation (Article 28.4).
Counsel’s characterisation: the special investment procedure Vietnam created is a registration mechanism with ex post supervision, not an approval mechanism with fewer steps. That distinction drives every downstream document.
Standard IRC track versus the special investment procedure Vietnam
Article 26.1 requires an IRC for a foreign investor’s project and Article 29.2 requires it before implementation. Under Article 27, zone management boards issue the IRC for projects inside industrial, export processing, hi-tech and economic zones; the provincial Department of Finance does so outside zones. On the standard track, Article 39.3 of Decree 96/2026 provides for issuance within 10 working days for projects not needing policy approval, if listed conditions are met (sector not prohibited, site verifiable, planning consistency, market access, technology conditions where applicable).
The special investment procedure Vietnam reflects a policy of investor self-certification inside zones whose planning and infrastructure the State has already approved. That rationale explains both the location limb and the exclusion of policy-approval projects. The real comparison is therefore total time to lawful commencement of construction, not IRC speed alone.
Eligibility test for the special investment procedure Vietnam
Eligibility for the special investment procedure Vietnam offers has three limbs, and all three must be satisfied.
Location limb: industrial parks and the hi-tech zone
The project must sit in an industrial park, export processing zone, hi-tech zone, digital technology zone, free trade zone, the international financial centre, or a functional zone of an economic zone. Stand-alone factory sites on converted land are ineligible.
A hi-tech zone adds a procedural advantage: under Article 20 of Decree 168/2025/ND-CP the zone management board is also the business registration authority for companies located there. Hi-tech zones typically apply their own technology admission criteria [Verification Required: current criteria].
Exclusion limb: policy-approval projects
Projects requiring investment policy approval under Article 24 are excluded. Article 24 covers, among others, large land-use conversion, resettlement, ports, airports, petroleum processing and special mechanisms. A secondary investor leasing serviced land in an operating industrial park is usually outside Article 24, but each project needs its own analysis. If doubt remains, obtain written eligibility confirmation from the zone management board before relying on the special investment procedure Vietnam route [State Authority Practice / Verification Required].
Investor limb: market access
Foreign investors, and entities treated as foreign under Article 20.1 (foreign ownership above 50%), must meet the Article 8 market access conditions and Appendix I of Decree 96/2026. Most manufacturing sectors are open, but conditional lines can arise for downstream distribution or ancillary services. An existing foreign-invested enterprise may implement a new project without forming a new entity (Article 20.3). Law 24/2026/QH16 replaces the conditional-line list with a new list of 137 lines from 1 March 2027, so ancillary activities should be re-checked against it.
Scope of exemptions and residual permits
The exemptions are bounded. Counsel should prepare a permit map showing what falls away, what becomes an undertaking, and what still applies.
| Approval | Standard track | Special investment procedure Vietnam (Art. 28) | Residual obligation | Status |
|---|---|---|---|---|
| Investment policy approval | Required if within Art. 24 | Not applicable (Art. 24 projects excluded) | None | Statutory |
| Technology appraisal / consultation | Where law requires | Exempt | Undertaking on technology standards | Statutory |
| Environmental impact assessment | Depending on type and scale | Exempt | Undertaking; operational compliance | Exemption statutory; operational permits to verify |
| Detailed planning | Where not already approved | Exempt | Consistency with zone planning | Statutory |
| Construction permit | Unless otherwise exempt | Exempt | Prior notification (Art. 28.3); building codes | Statutory |
| Fire prevention design approval | Where applicable | Unclear | Compliance required in any event | [Verification Required] |
| Environmental licence for operation | Where applicable | Unclear | Discharge and emission standards | [Verification Required] |
First, many established industrial parks already hold zone-level planning and environmental approvals, so the incremental saving for a small factory may be modest [State Authority Practice / Verification Required]. Second, exemption from a permit is not exemption from the underlying technical standard.
Prepare the permit map at feasibility stage, not after the IRC. It feeds the EPC scope, the lenders’ conditions precedent schedule and the first-year compliance calendar.
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Factory setup Vietnam: transaction mechanics
For factory setup Vietnam projects, electing the special investment procedure Vietnam provides reshapes the land, construction and financing documents. Our projects and infrastructure team typically restructures the conditions precedent schedule at term sheet stage.
Land and industrial park investment Vietnam
In most industrial park investment Vietnam transactions, the investor subleases serviced land from the park developer rather than receiving land from the State. Make the sublease conditional on IRC issuance, with handover milestones aligned to the construction notification.
Where land is allocated or leased directly by the State, Article 28.4 makes the IRC the basis for allocation, and the deposit regime under Article 30 LOI 2025 and Articles 26–27 of Decree 96/2026 may apply (3% of the first VND 300 billion of project capital, 2% on the 300–1,000 billion band and 1% above, excluding land fees and State infrastructure, with reductions for priority sectors).
Construction notification and the EPC contract
Because no construction permit is issued, the EPC contractor cannot treat a permit as evidence that the design is acceptable. The contract should therefore:
- require design compliance with the investor’s undertakings and applicable codes, verified by an independent engineer;
- allocate to the contractor the cost of remedial works ordered after inspection where caused by design or workmanship;
- make the Article 28.3 notification a defined milestone before mobilisation.
Financing, the capital account and foreign engineers
Lenders customarily require the EIA decision and construction permit as conditions precedent. Substitutes might include the IRC, signed undertakings, the notification acknowledgement, an independent engineer’s report and an eligibility opinion [Market practice; verify with lenders]. Our banking and finance team negotiates these substitutions.
Equity must reach the project through the foreign-investment capital account under Circular 38/2026/TT-NHNN: monetary contributions are made by bank transfer into that account (Article 4.4). Before the IRC, an already-established company may use it only to receive charter capital, pay lawful pre-investment costs and refund capital if no IRC issues (Articles 5.1 and 7.3). Opening an account before the company exists is not expressly addressed [Verification Required].
Foreign commissioning engineers staying under 90 days in a calendar year may be exempt from a work permit, with employer notification at least 3 working days before start (Decree 219/2025/ND-CP, effective 7 August 2025, Articles 7(13) and 9(4)). Longer secondments need a work permit, decided within 10 working days (Article 22) and valid for up to 2 years.
Risk analysis of the special investment procedure Vietnam
| Issue | Legal position | Commercial impact | Risk | Mitigation |
|---|---|---|---|---|
| Project later found to fall within Art. 24 | Art. 24 projects excluded from Art. 28 | IRC validity challenged; restart | Fatal | Formal eligibility analysis before filing |
| Non-conformity on post-inspection | Undertakings form the compliance benchmark | Remedial works, suspension, sanctions | High | Independent engineer; EPC back-to-back |
| Residual permits overlooked | Exemptions are enumerated | Delayed commercial operation | High | Permit map at feasibility stage |
| Lender refuses substitute CPs | Market practice still forming | Funding delay | Medium | Early lender engagement |
| Zone status or planning change | Art. 12 investment guarantee | Scope or timeline disruption | Low | Monitor; 3-year window under Art. 12.5 |
| Dossier supplementation | One written request (Decree 96/2026, Art. 6) | Short delay | Low | Complete first submission |
Drafting undertakings for the special investment procedure Vietnam
The undertakings typically address construction, environmental, fire safety and technology standards and zone planning [Verification Required: prescribed content and form under Decree 96/2026 and Circular 55/2026/TT-BTC]. Resist generic, unlimited formulations where the prescribed form permits, tie each undertaking to identified standards, and obtain technical sign-off on deliverability before execution.
Post-inspection exposure under the special investment procedure Vietnam
Breach of undertakings may expose the investor to administrative sanctions, remedial orders, suspension or, in serious cases, termination [Verification Required: specific sanctioning basis]. The exposure arises after capital is sunk, which is why the special investment procedure Vietnam rewards investors with mature compliance systems.
Keep a contemporaneous compliance file of design reviews, independent engineer reports, test certificates and correspondence with the zone management board. It is the investor’s primary defence if an inspection finding is disputed.
When to elect the special investment procedure Vietnam
For investment committees, the election is a structured judgement, not a default. Manufacturing FDI Vietnam projects benefit most where several of these factors are present:
- the project would otherwise need its own EIA or a construction permit not covered by zone-level approvals;
- the line uses specialised technology that might attract technology appraisal;
- customer qualification deadlines make months saved before construction quantifiable;
- group engineering, environmental and fire standards can be evidenced against Vietnamese codes;
- lenders and the EPC contractor accept substitute conditions and back-to-back obligations.
The standard track is often better for a small plant in a fully permitted park, for a first-time investor without a local compliance function, or where financing documents are already agreed on conventional permits. Phasing (standard track first, Article 28 later) needs verification [Verification Required].
Hypothetical scenario
A European precision components manufacturer plans a plant in a hi-tech zone near Ho Chi Minh City. Its lenders’ term sheet lists the EIA decision and construction permit as CPs. Counsel elects Article 28, renegotiates the CPs to an IRC, executed undertakings, construction notification and independent engineer report, and inserts back-to-back compliance obligations into the EPC contract. A ventilation deviation found on inspection is remedied by the EPC contractor at its cost.
Whether the special investment procedure Vietnam helps depends on location, scale, technology and the investor’s compliance capability. IVLF prepares an Article 28 Eligibility & Route Comparison Memo with a full permit map, then an IRC filing pack with draft undertakings, a CP substitution schedule and EPC risk-allocation clauses. Confidential consultation: (+84) 936 726 065 · info@ivlf-advisors.com.
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Foreign ownership restrictions and capital account regulations vary significantly by industry sector. Send your proposed business scope and target timeline to our Corporate Practice Team via WhatsApp or Email for a complimentary 24-hour Feasibility & Regulatory Check.
Frequently Asked Questions
Is the special investment procedure Vietnam mandatory in industrial parks?
No. Article 28 LOI 2025 is optional. An eligible project in a designated zone may elect it or follow the standard IRC procedure with ordinary pre-construction approvals.
Which approvals does Article 28 dispense with?
Investment policy approval, technology appraisal, environmental impact assessment, detailed planning and the construction permit. The investor gives written undertakings and notifies the construction authority before construction.
Can a policy-approval project use the special investment procedure Vietnam offers?
No. Projects within Article 24 are excluded. Confirm eligibility in writing before filing, because a later finding of ineligibility undermines the IRC.
Is a hi-tech zone better than an industrial park for Article 28?
Both are eligible. A hi-tech zone offers one authority for business and investment registration but applies technology admission criteria; an industrial park suits conventional manufacturing.
Will lenders accept a factory without a construction permit?
Many will, with substitute conditions such as the IRC, executed undertakings, the notification and an independent engineer’s report. Practice is still developing, so engage lenders at term sheet stage.
Conclusion
Elect the special investment procedure Vietnam offers only after building a permit map for the specific project and quantifying the time saved against the compliance burden transferred to the investor. For manufacturing FDI Vietnam projects that would otherwise need a project-level EIA and construction permit, the gain can be material; for smaller plants in fully permitted parks, the standard track may be equally fast with less post-inspection exposure. Next action for any special investment procedure Vietnam filing: commission the permit map before signing the land sublease.
This article provides general information on Vietnamese law as of 10 October 2026. It is not legal advice on any specific matter and should not be relied on without advice on the relevant facts.
This article is provided for general information only and does not constitute legal advice for any specific case. Regulations may change – please consult a qualified professional before acting. Should further analysis be required, please contact one of our lawyers below.
