"A single dissatisfied department official can stall an entire project due to excessive layers of bureaucracy," said the chairman of a major private economic conglomerate.

The burden on businesses

A chairman of a large private group recently shared that his company spent over two years unsuccessfully navigating the paperwork to launch a major project.

“There are far too many procedures, involving too many layers of approval. Sometimes, just one department officer's disapproval can bring everything to a halt,” he said.

He recounted how his permit team became exhausted and discouraged after repeated failures. Eventually, he wrote a handwritten letter to the provincial Party Secretary and Chairman, stating that if the authorities would not issue the permits, he would abandon the project - even though it was in a nationally prioritized tech sector.

Only after strong directives came from the city’s top leaders did the lower levels begin to respond. Finally, he was able to complete the paperwork and begin construction of the strategic project.

Another major businessman wasn’t as lucky. He planned to build a garment factory in a province since 2019. The land was already available and aligned with zoning plans, but he still couldn’t get through the investment procedures.

Despite repeated instructions from various provincial leaders, after six years, the project remains stalled.

These stories are only a few among many that illustrate the persistent struggles businesses face with Vietnam's investment procedures. Legal regulations are so complicated that they’ve become a major factor stalling 2,200 projects nationwide, involving nearly 6 million billion VND (approximately USD 235 billion) and over 300,000 hectares of land.

A maze of procedures and regulations

During the investment preparation phase, investors must handle processes related to zoning, investment permits, land use, construction, environmental protection, science and technology, fire prevention, forestry, and more.

According to the Vietnam Chamber of Commerce and Industry (VCCI), this phase consumes the most time and requires the most procedures - more than the actual implementation or operation phases.

VCCI notes that it’s impossible to determine the exact number of days needed for these procedures based solely on legal statutes. Some steps lack specific deadlines, while others have set processing times that are often extended without a clear timeline.

The bottleneck of “investment approval”

As previously analyzed in the article “From ‘investment approval’ to USD 235 billion in stagnation,” the process of seeking “investment approval” under the Investment Law has been a major barrier for private investors in Vietnam for over two decades.

However, there is promising news. The Ministry of Finance has urgently circulated a draft to gather input from ministries and business associations for revising the Investment Law, with the deadline for feedback on May 25.

This is part of the Ministry’s effort to improve the Investment Law, now under review at the 9th session of the National Assembly. The most recent amendments were in 2024 and 2022. In the 2025 draft revision, many projects’ approval processes are delegated to provincial chairpersons.

Previously, the 2024 revision had already transferred authority from the Prime Minister to provincial chairpersons for certain types of project approvals and introduced “special investment procedures” for priority sectors.

Under this framework, investors in industrial parks, export-processing zones, high-tech zones, information technology hubs, free trade areas, and specialized zones within economic zones only need investment registration certificates and environmental permits.

They are exempt from typical steps like investment approval, technology appraisal, environmental impact assessments, detailed zoning plans, construction permits, and various fire safety and structural approvals.

This marks a significant breakthrough in simplifying investment procedures and is expected to attract strategic investors in key sectors. The business community has widely praised this decentralization.

Granting more authority and accountability to local governments enables provinces to better manage and filter investments, significantly shortening and streamlining project implementation.

Despite these reform efforts, cumbersome procedures still persist, causing delays and even paralyzing key projects.

According to VCCI, many decentralization proposals still follow the same process and timelines. Responsibilities are often shifted from one senior leader to a subordinate (e.g., from Minister to Department Head, or from Provincial Chairman to Department Director) without truly reducing procedural steps.

"From the perspective of those dealing with these procedures, decentralization hasn’t made a real difference. Ideally, it should reduce middle layers and shorten processing times," VCCI noted.

A bold proposal

Why are only some private investment projects allowed to follow “special investment procedures” while others are not?

Put differently, can these simplified procedures be applied to all private investment projects in Vietnam?

Last weekend, the Government Portal published an article titled “Courage to eliminate bottlenecks in the Investment Law” by Dr. Nguyen Si Dung, former Vice Chairman of the National Assembly Office and currently a member of the Prime Minister’s Advisory Council. He proposed a groundbreaking reform: abolishing the Investment Law altogether.

According to the article, in developed countries like the United States, Japan, South Korea, Germany, and the UK, there is no comprehensive investment law. Investors simply follow the law - they don’t need to “ask permission” to invest.

In a modern market economy, investment is a right, not a privilege. Entrepreneurs should not need to “seek approval” for investing - they only need to comply with existing laws and compete fairly.

Dr. Dung asserts that the Investment Law is overly broad and internally contradictory, and should be abolished entirely.

Initial estimates suggest that removing the law could have the following effects: reduce project implementation times by 15-20% by eliminating investment approval steps; cut 5-7% of minor licensing procedures by streamlining the list of regulated industries; and decrease administrative burdens for foreign investors by 5-10% through integrating investment and business registration processes.

Overall, repealing the Investment Law could achieve 20-25% of the government’s goal to cut red tape - nearly fulfilling the reform targets set by Resolution 66/NQ-CP.

These recommendations align closely with the vision of Party General Secretary To Lam, who signed transformative Resolutions 57, 66, and 68 calling for strong institutional reform, improved business environments, eliminating at least 30% of current business conditions, and reducing administrative and unofficial costs by at least 30%, aiming for Vietnam’s investment climate to rank among the top three in ASEAN within the next 2-3 years.

The government and National Assembly are actively implementing this reform agenda through two major resolutions.

The remaining task is to remove institutional barriers to translate the Party’s vision into concrete, transformative results for Vietnamese businesses.

Tu Giang-Lan Anh