Vietnam moves to restructure FDI policies to attract high-quality investment

The Ministry of Finance has submitted to the Government a draft amendment to the Investment Law, proposing a range of measures to attract higher-quality FDI, with expanded market-access conditions and fundamental changes to investment incentives.

The ministry said a major bottleneck is that foreign investors in some sectors are required to establish joint ventures without specific limits on foreign ownership. This creates unnecessary administrative procedures and compliance costs while discouraging high-quality investment.

Under the draft, the Government would be authorised, depending on socio-economic conditions and management requirements, to allow foreign investors to hold up to 100% of charter capital or apply more favourable market-access conditions in sectors subject to restrictions.

For strategic projects with major impacts on economic, scientific and technological development and innovation, the Government could also ask the National Assembly to consider easing market-access conditions, provided national security, defence and national interests are protected.

The Ministry of Finance said the proposed changes would simplify investment procedures and improve transparency while helping Vietnam meet stricter requirements for an upgrade of its stock market classification.

The draft also proposes additional support for supply chains, production, product and technology improvements, initial investment and fixed-asset development.

A new Investment Support Fund would provide direct post-investment assistance to projects meeting technology and economic spillover criteria. Support would cover high-quality workforce training, research and development, social infrastructure for workers, high-tech product development and integration into domestic supply chains.

The combination of removing market-access barriers and introducing flexible investment support mechanisms aligned with international standards is expected to provide fresh momentum for Vietnam to capitalize on the next wave of global supply-chain relocation, according to the Ministry.