On 24 August 2026, the National Assembly passed Law No. 24/2026/QH16, amending and supplementing a number of provisions of Investment Law No. 143/2025/QH15. The Law will generally take effect from 1 March 2027, while the replacement of Appendix IV and certain transitional provisions will take effect earlier, from 1 January 2027.
A notable change is the introduction of a new Appendix IV comprising 137 conditional investment and business sectors, with 62 sectors removed and 14 others amended and standardised compared with the 2025 Law.
The removed sectors include several common business activities, such as rice export, road transport, automobile manufacturing, assembly and import, certain e-commerce activities, and vocational education, as well as various activities in logistics, inspection, and training.
For businesses, this is not merely a reduction in the list of business conditions. The change directly affects how enterprises assess market entry opportunities, plan expansion, and manage regulatory compliance.
01 | CREATING GREATER MARKET ENTRY FLEXIBILITY: REMOVING INVESTMENT CONDITIONS DOES NOT MEAN ELIMINATING REGULATION
From 1 January 2027, 62 sectors will officially be removed from Appendix IV. Enterprises operating in these sectors will no longer be required to satisfy investment and business conditions under the Investment Law, creating greater flexibility in structuring and expanding their business operations.
However, businesses need to distinguish between two legal aspects:
- No longer subject to conditions under the Investment Law, but still subject to sector-specific regulation: Removing conditions under the Investment Law does not mean that all legal requirements applicable to the business activity are eliminated. Requirements relating to safety, environmental protection, fire prevention and fighting, technical standards, technical regulations, and other sector-specific matters may continue to apply. Where necessary, relevant ministries and ministerial-level agencies are responsible for establishing appropriate regulatory measures for sectors removed from Appendix IV.
- Specific consideration for foreign investors: The removal of a sector from Appendix IV does not automatically remove market access restrictions. Foreign investors still need to consider requirements relating to foreign ownership ratios, investment forms, scope of activities, and market access conditions under Vietnamese law and relevant international commitments. “Not being subject to conditional business requirements under the Investment Law” and “being freely permitted to enter the market as a foreign investor” are two distinct legal matters.
02 | REDUCED MARKET ENTRY CONDITIONS: REQUIRING GREATER PROACTIVE COMPLIANCE MANAGEMENT
The reduction of Appendix IV reflects a policy direction toward narrowing market entry conditions governed under the Investment Law, while enhancing the role of sector-specific regulatory mechanisms.
A more open market entry environment also requires businesses to take a more proactive approach to compliance management. Compliance is no longer simply a matter of whether the required licences and approvals have been obtained. It also depends on the ability to accurately identify the legal requirements applicable to the operating model and maintain appropriate evidence of compliance throughout operations.
When formulating business expansion plans, enterprises should consider three key questions:
- Does the intended business line remain within the 137 conditional sectors under the new Appendix IV?
- What technical standards, operating conditions, or other regulatory requirements are imposed by sector-specific legislation?
- Does the actual business model trigger specific market access conditions applicable to foreign investors?
03 | TRANSITIONAL ARRANGEMENTS: MANAGING EXISTING LICENCES AND PENDING APPLICATIONS
Law No. 24/2026/QH16 establishes transitional arrangements corresponding to different operating and application statuses:
- Existing operations: Enterprises may continue their operations without having to satisfy the investment and business conditions under the Investment Law that have been removed.
- Existing licences and certificates: Where enterprises wish to continue using them, licences, certificates, and other approval documents already issued may remain valid until their stated expiry dates. Enterprises are not required to have them reissued or amended solely because the relevant sector has been removed from the list.
- Valid applications without results: For valid applications that have been submitted but have not yet been resolved, the competent authority will notify the applicant that processing has ceased and return the application dossier.
Practical takeaway: Enterprises planning to apply for new licences, renew existing licences, or undertake related procedures for sectors removed from Appendix IV should review their application status and timing to determine the appropriate course of action under the transitional arrangements.
04 | AN EXCEPTION REQUIRING EARLY ACTION: PROHIBITION ON TRADING IN N₂O
In contrast to the reduction in conditional sectors, Law No. 24/2026/QH16 adds the trading of N₂O for human inhalation to the list of prohibited investment and business activities, except for legally permitted purposes such as medical use, food technology, testing, scientific research, and other purposes as prescribed by the Government.
This provision takes effect from 1 January 2027.
Notably, contracts for the trading of N₂O falling within the prohibited scope and entered into before this date will terminate from 1 January 2027. The parties will have a maximum of 45 days to complete the liquidation of such contracts. Enterprises with relevant activities should review intended uses, supply chains, and existing contracts to determine appropriate transition measures during 2026.
WHAT SHOULD BUSINESSES PREPARE DURING 2026–2027?
- Review business lines: Compare all existing and planned business lines against the new Appendix IV to identify sectors where conditions have been removed, remain conditional, or have been revised.
- Re-evaluate expansion plans: Re-assess business models that were previously not implemented or were constrained by former market entry conditions.
- Cross-check sector-specific requirements: Identify the technical standards, operating conditions, and sector-specific regulatory requirements that remain applicable after a sector is removed from Appendix IV.
- Review licensing applications: Examine applications being prepared, already submitted, or currently under processing to determine an appropriate course of action in light of the transitional arrangements.
- Review market access conditions for foreign investors: Independently assess foreign ownership limits, investment forms, scope of activities, and relevant international commitments when expanding into new sectors.
KTC PERSPECTIVE
The removal of 62 conditional sectors creates greater flexibility for businesses, but does not reduce their legal responsibilities. As certain market entry conditions are removed, the ability to identify, manage, and substantiate compliance becomes increasingly important to maintaining stable business operations.
Rather than waiting until the Law takes effect, businesses should proactively map the legal requirements applicable to each business line and operating model from 2026, providing a basis for adjusting investment plans, expanding operations, and managing compliance accordingly.
KTC’s professional team supports businesses and investors in reviewing investment and business conditions, assessing the impact of regulatory changes, and developing compliance approaches appropriate to their actual operating models.
