Not every foreign investment project in Vietnam requires investment policy approval.
A foreign investor may establish a new company and complete investment registration without first obtaining investment policy approval. However, certain projects must obtain approval from the competent authority before the investor can proceed with the subsequent investment registration process.
The requirement depends primarily on the characteristics of the investment project.
Factors such as the project's scale, sector, location, land-use arrangements and other statutory criteria may determine whether investment policy approval is required.
The correct starting point is therefore not simply: Is the investor foreign? Instead, the key question is: Does the proposed investment project fall within a category requiring investment policy approval under Vietnam's investment framework?
Inventive Legal helps investors assess the proposed project before they commit capital, sign long-term premises or land arrangements, or begin the registration process.
The short answer
Investment policy approval is required only where an investment project falls within a category specified by Vietnamese investment legislation.
Depending on the characteristics of the project, investment policy approval may fall under the authority of the National Assembly, the Prime Minister, or the provincial People's Committee.
The analysis generally follows this sequence: Investment Project → Project Classification → Does the Project Fall Within a Statutory Approval Category? → YES → Investment Policy Approval → Investment Registration / IRC → Enterprise Registration / ERC.
If the project does not fall within an applicable investment policy approval category, the investor may instead proceed directly to the relevant investment registration process, subject to applicable market-access and investment conditions.
Quick Decision Guide
You may need investment policy approval if your project involves:
- A project falling within a category of national importance.
- A project subject to the Prime Minister's investment policy approval authority.
- A project falling within the investment policy approval authority of a provincial People's Committee.
- Particular land allocation, land lease or land-use arrangements specified by law.
- A sector or project type specifically identified under the applicable investment framework.
However, the assessment must be based on the specific project, rather than relying only on the nationality of the investor, the amount of investment capital, the fact that a Vietnamese company will be established, or whether the company will be 100% foreign-owned.
1. Do You Need Investment Policy Approval?
The first step is to distinguish between an investment project requiring investment policy approval and an investment project that only requires investment registration.
A foreign investor does not automatically need investment policy approval merely because it intends to invest in Vietnam. Likewise, establishing a foreign-invested company does not automatically trigger the investment policy approval process.
Instead, the project should be assessed against the statutory categories that allocate investment policy approval authority to different levels of government.
A practical decision framework is: Foreign Investor → Define Investment Project → Assess Business Activities & Market Access → Identify Project Characteristics (Sector / Scale / Location / Land Use) → Does the Project Fall Within a Statutory Approval Category? → YES → Investment Policy Approval → Investment Registration → IRC; NO → Investment Registration → IRC.
The purpose of this analysis is to identify the correct regulatory pathway before the investor begins the registration process.
2. Projects Requiring Investment Policy Approval by the National Assembly
The National Assembly has authority to approve the investment policy of projects falling within categories of particular national importance.
These projects generally involve substantial public-interest considerations. Depending on the applicable statutory framework, relevant characteristics may include significant investment scale, environmental impact, land-use requirements, population resettlement implications, infrastructure or national development considerations, or other characteristics specifically identified by law.
These projects represent a limited category of investments. Most ordinary foreign-invested company formation projects will not fall within the National Assembly's investment policy approval authority.
The relevant question is therefore not whether the investor is large or foreign, but whether the specific project satisfies the statutory criteria applicable to this approval level.
3. Projects Requiring Investment Policy Approval by the Prime Minister
Certain investment projects fall within the Prime Minister's investment policy approval authority.
The applicable categories are determined by Vietnamese investment legislation and may depend on factors such as the nature of the investment project, the relevant business sector, the scale or capacity of the project, infrastructure characteristics, location, land-use requirements, and other statutory criteria.
Examples of project categories that may require higher-level approval can include certain projects involving major infrastructure or specifically regulated sectors.
However, foreign investors should avoid relying solely on broad labels such as "large project" or "infrastructure project." The actual statutory classification of the project must be assessed. A project may require approval because of a combination of its sector, location and legal characteristics rather than its investment capital alone.
4. Projects Requiring Investment Policy Approval by Provincial People's Committees
Provincial People's Committees have authority to approve investment policies for certain projects implemented within their jurisdiction.
A project may fall within this approval pathway where it involves statutory characteristics relating to matters such as land allocation, land lease, change of land-use purpose, projects located in areas subject to specific regulatory conditions, or other projects falling within provincial investment approval authority.
This means that land and location can be particularly important when determining the regulatory pathway. For example, two investors conducting similar commercial activities may face different approval requirements depending on where the project is located, whether the investor requires land from the State, whether land-use rights must be converted, or whether the project is located in an area subject to additional legal considerations.
The proposed premises arrangement should therefore be assessed together with the investment structure.
5. Foreign Investment Alone Does Not Trigger Investment Policy Approval
One of the most common misconceptions is that all foreign investment projects require investment policy approval. This is incorrect.
The following factors alone do not necessarily trigger investment policy approval: the investor is foreign; the company will be 100% foreign-owned; the investor must obtain an IRC; the investor is contributing significant capital; the business operates in a conditional sector.
These factors may create other regulatory requirements. For example, the proposed activity may be subject to foreign ownership restrictions, the investor may need to satisfy investment or business conditions in a conditional investment sector, the proposed activity may be subject to market-access restrictions based on the investor's nationality or applicable treaty commitments, or the project may require investment registration.
However, none of these factors should automatically be treated as equivalent to investment policy approval.
See Market Access for Foreign Investors in Vietnam and Conditional Investment Business Lines in Vietnam.
6. The Project Characteristics Matter More Than the Corporate Structure
The same investor may establish different projects in Vietnam, each following a different regulatory pathway.
Scenario A: Standard Foreign-Invested Service Company. A foreign investor establishes a company providing business consultancy services. The project may require market-access assessment, investment registration, an IRC, enterprise registration and an ERC. Investment policy approval may not be required.
Scenario B: Project Involving Significant Land Arrangements. The same investor develops a project requiring specific land allocation or land lease arrangements. The project may require market-access assessment, investment policy approval assessment, land and project analysis, investment registration, and additional regulatory approvals. The regulatory pathway may therefore be more complex.
Scenario C: Acquisition of an Existing Vietnamese Company. The investor acquires shares or capital contributions in an existing Vietnamese company. This may involve market-access assessment, foreign ownership analysis, M&A approval assessment, and corporate registration procedures. The transaction should not automatically be treated as a new investment project requiring investment policy approval.
7. Does Investment Capital Determine Whether Approval Is Required?
Not by itself. Investment capital can be relevant to the classification of certain projects, but the investment amount alone does not provide a complete answer.
The analysis may also depend on the business sector, project capacity, location, land-use arrangements, environmental considerations, infrastructure characteristics, and other statutory thresholds or conditions.
A high investment value does not automatically mean that investment policy approval is required. Likewise, a lower-value project is not automatically exempt from investment policy approval. The project must be assessed against the applicable statutory criteria as a whole.
8. Does Land Use Affect Whether Investment Policy Approval Is Required?
Potentially, yes. Land-use arrangements can be an important factor in determining whether a project falls within an investment policy approval category.
The analysis may include whether the project requires land allocation, whether the project requires land lease, whether the project requires a change of land-use purpose, whether the investor is acquiring or using existing premises, the legal status of the project site, and whether the project is located in an area subject to particular regulatory requirements.
This is why investors should be cautious before entering into long-term land or premises commitments. The regulatory analysis should ideally be completed before the investor becomes contractually committed to a project location.
9. Does the Business Sector Affect Whether Approval Is Required?
Yes. Certain sectors may be associated with investment projects subject to specific approval requirements.
However, it is important to distinguish between sector-specific investment conditions, which determine whether an investor may enter or operate in a particular business sector, and investment policy approval, which determines whether the specific investment project requires approval at the investment policy level.
A project may therefore be open to foreign investment but subject to investment policy approval, or subject to sector-specific conditions without requiring investment policy approval. The two analyses should be conducted separately.
10. Investment Policy Approval Decision Tree
A practical assessment may follow the decision tree below.
Are you implementing an investment project in Vietnam? If NO, assess the appropriate transaction structure (e.g. M&A / share acquisition). If YES: what are the business activities, and are the activities accessible to the foreign investor?
Does the project fall within a National Assembly approval category? If YES, investment policy approval is required. If NO, does the project fall within a Prime Minister approval category? If YES, investment policy approval is required. If NO, does the project fall within a Provincial People's Committee approval category? If YES, investment policy approval is required. If NO, proceed with the applicable investment registration pathway.
This framework should be used as an initial assessment tool rather than as a substitute for reviewing the specific statutory criteria applicable to the project.
11. What Happens If Investment Policy Approval Is Required?
Where a project requires investment policy approval, the investor generally needs to complete the approval process before proceeding with the subsequent stages of investment implementation.
The pathway may include: Investment Project → Market Access Assessment → Investment Policy Approval Application → Review by Competent Authorities → Investment Policy Approval → Investment Registration → IRC → Enterprise Registration → ERC → Operational Licences.
The precise sequence may vary depending on the project. Additional approvals may also be required in relation to land, construction, environment, sector-specific operations or other project characteristics.
12. What Happens If Investment Policy Approval Is Not Required?
If the project does not fall within an applicable investment policy approval category, the investor may generally proceed to the next relevant regulatory stage.
For a new foreign-invested investment project, this may include: Market Access Assessment → Investment Registration → IRC → Enterprise Registration → ERC → Capital Contribution → Operational Licensing.
However, the absence of investment policy approval does not mean that the project is free from regulatory requirements. The investor may still need to address market access, foreign ownership restrictions, investment registration, enterprise registration, business licensing, sector-specific permits, and tax and operational compliance.
13. Common Mistakes When Assessing Investment Policy Approval
1. Assuming All Foreign Investors Need Approval — foreign ownership alone does not trigger investment policy approval.
2. Looking Only at Investment Capital — the project must be assessed based on all relevant statutory characteristics.
3. Ignoring Land and Location — land-use arrangements and project location can materially affect the regulatory pathway.
4. Confusing Investment Policy Approval With an IRC — an IRC and investment policy approval are separate legal mechanisms.
5. Treating a Conditional Business Line as Automatic Policy Approval — a conditional investment sector may create specific market-entry requirements without necessarily requiring investment policy approval.
6. Signing Premises Agreements Before Regulatory Assessment — a lease or land arrangement may create commercial commitments before the investor understands whether the proposed project can proceed through the intended structure.
7. Treating M&A Transactions Like New Investment Projects — acquiring an existing Vietnamese company may trigger a different regulatory pathway.
14. When Should You Assess Investment Policy Approval?
Ideally, the assessment should be completed before the investor establishes the project company, signs a long-term premises agreement, acquires land, commits substantial capital, signs definitive transaction documents, or begins construction or implementation.
The earlier the regulatory structure is assessed, the easier it is to adjust the investment model if a particular approval requirement applies.
A practical sequence is: Business Model → Market Access → Investment Structure → Project Classification → Investment Policy Approval Assessment → Investment Registration → Implementation.