How the governmental reform reshapes business and foreign investment in Vietnam. Vietnam’s ongoing government restructuring is expected to significantly reshape the country’s business environment and foreign investment landscape. While the reforms aim to improve administrative efficiency and transparency in the long term, they also introduce short-term uncertainty that investors and businesses must carefully navigate.
Short-Term Challenges for Businesses and Foreign Investors (Transition Period)
Uncertainty about the “right door” for procedures
As competencies are transferred from the old ministries to new “super-ministries,” or from district-level to provincial/commune-level authorities, businesses may not immediately know which agency is responsible for a specific license or approval. This can lengthen processing times for investment and business procedures.
This issue is particularly relevant for investors operating in regulated sectors where approvals are sequential rather than parallel. If one step in the process is delayed due to uncertainty over competence, the entire project timeline may be affected, even if other approvals are ready to proceed.
A “dual regime” phase in legal regulations
During the transition, enterprises may have to track both the old and new regulations in parallel, increasing legal and compliance complexity until the framework stabilizes.
“Play-it-safe” mindset among officials handling dossiers
As officials are overly cautious about signing off on decisions, investors and diplomats expect short-term risks of “paralysis” and approval delays, even as the government insists it will not hinder project approvals. 
In the short term, FDIs can expect slower and less predictable approvals in some sectors while responsibilities are being reassigned.
Medium-Term Outlook (Post-2027)
However, in the medium term, i.e. after roughly 2027, the reform would contribute to a broader effort to enhance the business climate and attract investment. In the medium-term, if successful, the reforms should shorten licensing times, reduce overlaps, and increase transparency, improving Vietnam’s overall attractiveness compared to regional competitors.
Most Affected Sectors
More security-sensitive sectors (energy, critical infrastructure, telecoms, data, large-scale FDI projects) will face tighter and more complex screening, in turn increasing the time and documentation required for project approvals
Land-intensive and construction-heavy sectors will experience the greatest exposure to how well the new planning construction environment architecture functions. If the super-ministries coordinate well, these sectors would benefit greatly, but if they do not, the sectors would slow down such projects.
Public-service and PPP sectors will have to navigate a changed map of public partners as service units are reorganized.
In addition, sectors that depend heavily on administrative sequencing such as real estate development, infrastructure, and manufacturing projects involving land conversion are likely to be more sensitive to how quickly new chains of authority become operational.
Investor Strategies
If Vietnam’s super-ministries deliver faster, clearer, more coordinated governance, Vietnam can strengthen its FDI position in ASEAN. On the other hand, if reorganization leads to prolonged delays, opaque security vetting, and inconsistent implementation, Enterprises and FDI investors may make the following adaptations to their strategies:
Update Government-Relations Mapping (GR Mapping)
Systematically remap all central and local counterparts in light of the new structure (14 ministries, three ministerial-level agencies, and restructured provinces/districts).
Identify the primary authority for each major procedure investment registration, land allocation, construction permits, environmental approvals, sectoral licenses, tax and customs under the new super-ministry arrangements.
Adjust Expectations on Timelines and Compliance Costs (2025–2027)
Build buffer time into project plans for investment, land, construction, and tax procedures during the transition phase. Reuters notes that investors and officials expect some short-term delays and “paralysis” risk, even as the government pledges not to slow approvals. 
Incorporate change-of-law and change-of-authority clauses into contracts and JV agreements to share risks arising from shifting competencies and regulatory reforms.
Strengthen Compliance and Security/Data Documentation
For projects in security-sensitive sectors, prepare robust documentation on ownership structure, funding sources, data flows, and cybersecurity in line with Vietnam’s evolving security and data-governance rules.
Engage early with relevant authorities (including security agencies where applicable) to understand security-screening expectations and reduce surprises in the approval process.
Diversify Locations and Investment Models
Monitor closely the restructuring of provincial-level units, changes in local incentive regimes, and new infrastructure priorities. Avoid concentrating all assets in one jurisdiction, to hedge local policy risk. 
Explore flexible investment models, such as JVs with reputable local partners or phased investments, which can be adjusted as the regulatory landscape stabilizes.
Foreign participation in strategic sectors
Vietnam’s emerging security-screening framework is centred on a new draft decree of the Ministry of Public Security (MPS) which would significantly expand police authority over investment projects. According to Reuters, the draft decree would require police approval for investment projects in critical sectors such as energy, telecommunications, construction, ports, airports, industrial parks, oilfields, and even golf resorts.
Security becomes a formal “gate” for FDI in key industries
Foreign investors in energy, large infrastructure, telecoms, data-intensive services, special economic zones, industrial parks, and airports/ports will be subject to an additional security clearance layer on top of existing investment, land, and sectoral regulations.
This may affect both greenfield projects and major M&A transactions, especially where ownership, technology, or data flows are deemed sensitive.
More selective FDI – preference for “trusted” partners
The expanded role of MPS may favour investors from countries with strong political and security ties to Vietnam, or those willing to accept stringent disclosure of ownership structure, financing, and data-handling practices.
Conversely, investors from jurisdictions viewed as politically sensitive may find it harder to enter or expand in these sectors, even if they meet commercial criteria.
Higher compliance costs and longer lead times
Thorough security vetting inevitably means more documentation, more queries, and potentially longer timelines, especially early on when procedures and thresholds are still being tested.
Need for transparent, rules-based implementation
If criteria for security risk are published, standardized, and consistently applied, the reform can be seen as a move toward rules-based investment screening similar to FDI review regimes in OECD countries.
If instead the system remains opaque or discretionary, foreign investors may price in additional political-regulatory risk or shift sensitive projects to other ASEAN markets.
Shifting Distribution of Regulatory Risk
Another structural implication of the reform is the gradual shift in how regulatory risk is distributed. Instead of being dispersed across multiple layers of administration, risk is increasingly concentrated at fewer decision points.
For foreign investors, this means that while procedures may eventually become shorter, each individual approval may carry greater legal and practical weight, making early-stage due diligence and authority mapping more critical than before.
Conclusion
Overall, Vietnam’s government reform presents a typical transition dynamic: short-term uncertainty followed by potential long-term gains. Investors who proactively adapt to the new administrative structure and regulatory environment will be better positioned to benefit from improved governance and a more transparent investment climate.
Read more: Decree No. 236/2025/ND-CP: Vietnam’s Comprehensive Framework for Implementing the Global Minimum Tax
