Procedures and Post-Audit

Decree 96/2026/ND-CP, issued on March 31, 2026, replaces Decree 31/2021/ND-CP, Decree 19/2026/ND-CP, and Decree 239/2025/ND-CP with a recalibrated framework for how foreign investment is admitted, incentivised, and supervised in Vietnam. The decree introduces special investment procedures with 15-working-day processing timelines, expands incentives for semiconductor and artificial intelligence projects, and shifts part of the regulatory burden from pre-licensing inspection to post-licensing compliance.

Special Investment Procedures

The most visible change for investors is the formalisation of special investment procedures, applicable to projects implemented in industrial parks, export processing zones, high-tech parks, and economic zones. Under Articles 46 through 50 of Decree 96, eligible investors submit application dossiers together with written commitments to comply with applicable national standards and technical regulations. Management boards of the relevant zone process the dossier and issue an investment registration certificate within 15 working days.

This replaces the previous multi-stage appraisal process for construction, environmental protection, and fire protection conditions. The trade-off is significant. Investors that fail to fulfil their commitments after commencing operations face sanctions including project suspension or termination. The shift from pre-licensing inspection to post-licensing supervision reflects a broader regulatory philosophy: place greater trust in investor self-compliance while maintaining enforcement discipline. As VILAF noted in its April 2026 client alert, this is a "system-level recalibration" toward a rules-based, data-driven approach.

Eligibility for the special procedures is not automatic. Investors must commit to conditions on business sectors, investment capital, capital disbursement progress, and satisfaction of conditions stated in their investment licences or agreements with competent state agencies. The mechanism is designed for projects that meet clear thresholds and are located within designated economic zones, not for speculative or early-stage ventures.

Expanded Incentives for Strategic Technology

Decree 96 substantially expands the sectors eligible for special investment incentives, with particular emphasis on semiconductor manufacturing, artificial intelligence infrastructure, and digital technology. The decree introduces three tiers of qualifying projects under Article 21, each with specific capital and disbursement requirements.

The first tier covers innovation centres, big data infrastructure, cloud computing, 5G networks, and strategic technology sectors as decided by the Prime Minister. Qualifying projects require total investment capital of at least VND 3 trillion (approximately $117 million) with minimum disbursement of VND 1 trillion within three years from the date of the investment registration certificate.

The second tier targets core digital technology manufacturing, semiconductor chip research and development, and AI data centres. These projects must have total investment capital of at least VND 6 trillion (approximately $234 million) and be fully disbursed within five years. The National Innovation Centre, established under a Prime Minister's decision, is also included in this category.

The third tier applies to exceptionally large-scale projects in incentivised sectors, requiring total investment capital of at least VND 30 trillion (approximately $1.17 billion) with minimum disbursement of VND 10 trillion within three years. These thresholds are not nominal. They are designed to screen out projects lacking commercial feasibility and to link incentive entitlement to actual implementation commitments.

Forms of support include infrastructure development, human resource training, credit access, production premises, science and technology transfer, and market development. Special incentives focus on corporate income tax and land rental reductions. The Prime Minister decides the specific levels and duration based on criteria including technology level, technology transfer capacity, Vietnamese enterprise participation in the value chain, and domestic value creation.

Incentive Areas and the Criteria Shift

Decree 96 replaces the closed-list approach to investment incentive areas with a criteria-based system. Under the previous Decree 31/2021/ND-CP, specific localities were expressly enumerated as eligible for incentives. This created instability when administrative boundaries were restructured or localities merged.

Article 22 of Decree 96 defines eligible areas by socio-economic condition rather than by name. Communes classified as Area II or Area III within ethnic minority and mountainous regions qualify for the highest incentive tier. Where administrative restructuring occurs, previously eligible communes retain their incentive status. For newly formed communes created by merging communes with different classifications, the highest hardship classification applies.

Functional economic zones receive standardised treatment. Economic zones, high-tech zones, hi-tech agricultural zones, concentrated digital industrial zones, free trade zones, and international financial centres are treated as equivalent to areas with extremely difficult socio-economic conditions. Industrial parks, industrial clusters, and export processing zones are treated as equivalent to areas with difficult socio-economic conditions. This tiered structure concentrates resources on areas capable of driving innovation and integrating into global value chains.

New Market Entry and Reporting Obligations

Article 72 of Decree 96 implements a significant procedural change introduced by the Law on Investment 2025. Foreign investors may now establish an economic organisation and obtain an enterprise registration certificate before applying for an investment registration certificate, provided they satisfy market access conditions applicable to foreign investors. The investor must complete investment registration procedures within 12 months from the date of establishment. The enterprise may only commence implementing the investment project after the investment registration certificate is granted.

This change reduces the chicken-and-egg problem that previously confronted investors who needed an investment registration certificate before they could establish a legal entity to hold the project. However, the 12-month deadline creates a compliance risk for investors who encounter delays in project preparation or provincial processing. No detailed guidance has yet been issued on the consequences of failing to obtain the investment registration certificate within that period.

Perhaps more consequential for ongoing compliance, Decree 96 introduces mandatory quarterly investment monitoring reports for all investors in projects using non-state capital, including FDI enterprises. Pursuant to Article 94, these reports must be submitted before the 10th day of the first month of the following quarter, beginning from Q2/2026. The reports cover project implementation status, capital contribution progress, and operational milestones. This represents a significant increase in reporting frequency for many FDI enterprises that previously submitted reports on an annual or semi-annual basis.

Investment Security and Market Access

Decree 96 introduces mechanisms to secure investment incentives when statutory changes occur after an investment has been made. Article 4 stipulates that if newly issued legal documents alter the investment incentives applied to investors prior to their effective date, investors are entitled to continued enjoyment of those incentives under Article 12 of the Law on Investment. To apply, investors file a written request to the investment registration agency with supporting documents. The agency must decide within 30 days.

This provision addresses a longstanding concern among foreign investors about regulatory unpredictability. In practice, its effectiveness will depend on how investment registration agencies interpret "alter" and what evidence they require to establish pre-existing entitlement. The 30-day decision timeline is binding, but there is no explicit remedy if the agency fails to comply.

On market access, Appendix I to Decree 96 expands the list of sectors with restricted market access for foreign investors to 62 sectors, up from the previous list under Decree 31/2021. Construction activities of foreign contractors have been added. The decree also clarifies that Vietnamese citizens holding foreign nationality may elect to apply either domestic or foreign investor conditions, but not both. Dual nationals who choose domestic investor treatment forfeit foreign investor rights and obligations.

Decree 96 also adds the manufacture of dual-use technology products to the list of science and technology sectors eligible for general investment incentives, bringing the total to 23. Agriculture-related incentives expand to 13 specific sectors. Notably, national important projects and key sectoral projects approved by the Prime Minister are for the first time included in the category eligible for special investment incentives.

The decree takes effect immediately from its date of issuance, March 31, 2026. For enterprises already operating in Vietnam, the quarterly reporting requirement begins in the second quarter of 2026. The special investment procedures apply to new applications submitted after that date. Investors with projects currently under appraisal should consider whether re-filing under the new special procedures would accelerate timeline. Those planning new investments in semiconductor, AI, or large-scale manufacturing should evaluate whether their project structures meet the capital and disbursement thresholds for special incentives.