Projects that do not require investment policy approval 

Incorrectly determining whether a project does not require investment policy approval may delay implementation, duplicate land, environmental, and construction procedures, or result in suspension when later expansion exceeds statutory thresholds. Under the closed-list mechanism of the Law on Investment, projects outside the categories specified in Articles 30, 31, and 32 are generally exempt from investment policy approval. Nevertheless, investors may still need an Investment Registration Certificate, specialized operating permits, and other project-specific approvals.

Long Phan Consulting assists investors in classifying projects accurately, shortening licensing schedules, controlling regulatory exposure, and maintaining efficient implementation from the initial planning stage.

Principles for Identifying Projects Exempt from Investment Policy Approval

Enterprises must determine their Investment Policy Approval (IPA) status by directly cross-referencing their specific project profile against the mandatory statutory list provided in the Law on Investment. If a project falls outside this prescribed list, the entity is exempt from the IPA procedure, though it must still undertake separate regulatory filings.

The guiding mechanism is a “closed-list” approach. The specific groups of projects requiring formal IPA are exhaustively defined in Articles 30, 31, and 32 of the 2025 Law on Investment. Consequently, standard manufacturing, commercial, logistics, or software projects may be exempt, provided they do not trigger the specific mandatory criteria.

However, IPA exemption does not grant an automatic waiver of all legal obligations. Enterprises may still be required to secure an Investment Registration Certificate (IRC), environmental licenses, construction permits, fire prevention and firefighting (FPF) design approvals, or industry-specific licenses before commencing operations.

The Closed-List Mechanism in Investment Law Frameworks

Businesses should not default to the assumption that all investments require a Provincial People’s Committee decision. The accurate approach involves determining whether the project profile falls into the mandatory group requiring formal IPA.

Projects are typically exempt if they simultaneously satisfy the following fundamental conditions:

• No State-Allocated Land: The project does not require the State to allocate or lease land without going through public auctions or bidding processes.
• No Land Conversion: The project does not propose that the State permit the conversion of land-use purposes.
• Zone Compliance: The project is not situated in restricted development areas or zones protected for historical heritage.
• National Security: The project location does not impact national defense or security.
• Sectoral Control: The project does not involve business sectors subject to specialized, high-level regulatory control.

This framework serves as the primary filter for businesses to avoid filing in the wrong regulatory lane. If a project involves land, environmental risks, or special sectors, enterprises must conduct a deeper review before confirming exemption.

Classification of Common Projects Exempt from Statutory Review

In practice, many projects do not require Investment Policy Approval (IPA) but must still fulfill specialized operational conditions. The determining factor is whether the project utilizes State-allocated land, requires land-use purpose conversion, or involves restricted business sectors.

For expansion projects, enterprises must strictly monitor adjustment thresholds. Changing land-use scale by more than 10% or over 30 hectares, or increasing total investment capital by 20% or more, alters the project’s essential nature and may trigger mandatory procedures for adjusting the Investment Policy Approval.

A Six-Step Workflow for Legal Criteria Review

To determine if a project requires Investment Policy Approval, enterprises should execute a structured review sequence. This systematic approach allows legal, accounting, and investment departments to avoid overlooking land-use, sectoral, or foreign-investor-specific triggers.

1. Business Sector Verification: Cross-reference against lists of conditional business sectors and those subject to specialized market-access control.
2. Scale Assessment: Determine the project’s total investment capital, production capacity, land area, and potential impact.
3. Land Origin Analysis: Identify the necessity for State-allocated land, the origin of the land parcel, and the access methodology.
4. Conversion Audit: Check for land-use purpose conversion requirements, particularly regarding rice-growing land, forest land, or areas under special management.
5. Foreign Investor Status: Evaluate the transaction for Foreign Direct Investment (FDI) elements, including capital contributions or share acquisitions.
6. Geographic Zoning Check: Assess the project location, including border, coastal, island, or national defense/security-impacted zones.

If the review indicates the project lies outside the scope of Articles 30, 31, and 32 of the Law on Investment 2025, the enterprise may proceed to the appropriate procedural track. This generally involves IRC applications, land-use, environmental, construction, or industry-specific licensing.

Risks of Misidentifying Projects Requiring Investment Policy Approval

The most frequent operational error is not the filing process itself, but the initial misclassification of the project’s essential nature. Many enterprises erroneously assume that small-scale projects or leased facilities are automatically exempt from Investment Policy Approval (IPA), overlooking how land-use factors, business sectors, or transaction structures can trigger mandatory obligations.

Risks typically manifest when businesses assess only capital scale while disregarding:

• Land-use rights;
• National defense and security areas;
• Controlled business sectors;
• FDI M&A structures;
• Project objective changes.

If misclassified, authorities may order an immediate cessation of activities to re-initiate investment procedures. This inevitably leads to stalled disbursements, construction delays, and disputes with contractors or financial partners.

Risks for Small-Scale Real Estate and Project Expansion

Many businesses misunderstand that small-scale real estate projects under Clause 3, Article 9 of the 2023 Law on Real Estate Business are not automatically exempt from IPA under Article 52 of the 2025 Law on Investment. In reality, the determining factor extends beyond mere area or capital metrics.

The following criteria frequently trigger IPA obligations:

• State allocation/lease without auction or bidding;
• Land-use purpose conversion;
• Changes to project scale or land-use objectives;
• Housing or urban area development.

Pursuant to Clause 7, Article 255 of the Law on Land 2024, many project adjustments involving land require re-initiating investment procedures if the nature of land utilization or exploitation scale changes.

Enterprises scaling up operations must be particularly alert to:

• Land-use area increases exceeding 10% or 30 hectares;
• Total investment capital increases of 20% or more;
• Changes to project objectives or operational timelines.

These variables can shift a project from the “exempt” category into the mandatory adjustment track for Investment Policy Approval.

Risks in Special Sectors and National Defense/Security Zones

FDI enterprises frequently face risks when investing in sectors perceived as “standard services” that are actually subject to market-access conditions or national security controls.

High-scrutiny sectors include:

• Logistics, data centers, and telecommunications;
• Education, healthcare, and energy;
• Technical infrastructure and seaports;
• Real estate or warehousing near border/coastal regions.

Under the 2025 Law on Investment, projects in areas impacting national defense or security are subject to heightened scrutiny, regardless of total capital scale. Actual risks often arise when businesses lease land near seaports, acquire infrastructure assets, manage user data, or operate logistics warehouses in sensitive regions. Failure to conduct proactive reviews may compel the enterprise to seek opinions from the Ministry of National Defense or the Ministry of Public Security before implementation.

Risks in FDI Capital Contributions and Share Acquisitions

Many M&A transactions do not create a new legal entity but remain subject to control equivalent to new investment activities. This group presents significant risk for investment funds and foreign firms acquiring Vietnamese companies with land-based assets.

Enterprises must audit:

• Foreign ownership ratios;
• Land-use rights of the target company;
• Project location and business sectors;
• Actual post-transaction control.

Under the Law on Investment 2025, capital contributions or share acquisitions by foreign investors must be registered if they increase foreign ownership ratios, involve land-use rights, or occur in national defense and security-impacted zones. The primary risk is treating M&A transactions solely as corporate or commercial matters without auditing investment obligations. Consequently, transactions may stall during shareholder updates or Investment Registration Certificate (IRC) adjustments.

Mandatory Legal Procedures for IPA-Exempt Projects

Being exempt from Investment Policy Approval (IPA) does not grant an immediate “green light” for project implementation. In reality, many projects stagnate because they fail to finalize the Investment Registration Certificate (IRC), environmental filings, construction permits, or specialized industry licenses.

Enterprises must recognize that IPA is merely the first layer of compliance. Following an exemption, the project must still traverse a specialized licensing system corresponding to its scale, sector, and operational model. For FDI enterprises, IPA exemption does not waive the obligation to obtain an Investment Registration Certificate (IRC). Pursuant to Decree No. 96/2026/ND-CP, the processing time for a valid IRC application is 10 working days from the date the investment registration agency receives a complete dossier.

The Investment Registration Certificate (IRC) for FDI Projects

Foreign investors frequently confuse “IPA exemption” with “IRC exemption,” though these represent distinct mechanisms. FDI projects exempt from IPA must still secure an IRC before establishing a business entity, deploying capital, scaling investments, or engaging in foreign-invested commercial activities.

Common IRC dossier components include:

• Investment proposal: Detailing project goals, scale, and capital structure.
• Financial capacity documentation: Proving the investor’s ability to execute the project.
• Site selection evidence: Documentation regarding the project location.
• Market-access explanation: Compliance with current market-access restrictions.
• Legal status documents: Corporate and investor identification.
• Technology records: Applicable for projects subject to technology control.

If the explanatory dossier lacks consistency across business sectors, capital scale, and project objectives, authorities will frequently mandate revisions, causing delays regardless of IPA exemption status.

Environmental, Construction, and Fire Safety Obligations Before Launch

Many enterprises focus exclusively on the IRC while neglecting real-world operational procedures. This oversight is a leading cause for projects failing to secure acceptance or launching behind schedule.

Mandatory obligations typically include:

• Environmental compliance: Conducting Environmental Impact Assessments (EIA) or securing Environmental Licenses before commissioning. Pursuant to the 2020 Law on Environmental Protection, projects involving industrial production or technical infrastructure typically necessitate EIA filings.
• Construction and Fire Safety: Reviewing project utility, construction density, fire-explosion risks, and labor density. Enterprises must ensure design approval and final acceptance for Fire Prevention and Fighting (FPF) systems.

Failure to finalize these environmental or FPF procedures prior to construction or operation can lead to immediate operational suspension or mandatory restorative actions.

Industry-Specific Conditional Business Licenses

Even when IPA-exempt, projects remain subject to rigorous post-investment control if they operate in conditional business sectors. Relevant sectors often include logistics, education, healthcare, e-commerce, real estate, energy, food production, and transportation.

Enterprises must concurrently audit:

• Capital requirements and professional certifications;
• Technical infrastructure and operational licenses;
• Market-access limitations for foreign investors.

Some projects, despite holding valid IRCs and ERCs, are barred from active operation until specialized industry licenses are secured. Consequently, businesses should build a “compliance roadmap” at the project outset rather than addressing permits piecemeal. This strategy prevents commercial exploitation delays and minimizes the risk of post-audit penalties.

Sanctions for Project Splitting to Evade Investment Procedures

Enterprises should not attempt to subdivide projects, split legal entities, or phase investments solely to force capital or land metrics below the Investment Policy Approval (IPA) threshold. Management agencies reserve the right to assess the project’s total essential nature rather than reviewing fragmented dossiers in isolation.

Actions indicating non-compliant project splitting often include:

• Shared physical locations or adjacent land parcels;
• Identity of the lead investor or related corporate groups;
• Shared business objectives and technical infrastructure;
• Linked implementation timelines;
• Abnormal fragmentation of investment capital or land area.

If identified as an evasion tactic, businesses may be ordered to re-initiate the entire investment procedure. More severe consequences include the suspension, partial cessation, or total termination of project activities for persistent non-compliance.

Risks of Partial or Total Operational Suspension

State investment management agencies may order the suspension of project activities if an investor fails to adhere to the contents of their approved Investment Policy or Investment Registration Certificate (IRC). This risk escalates significantly if the enterprise continues violations after receiving administrative penalties.

Common operational consequences include:

• Stalled construction and factory shutdowns;
• Inability to commission new project phases;
• Denial of environmental permits;
• Disrupted capital disbursements;
• Commercial disputes with contractors.

For projects involving leverage, EPC contracts, or customer delivery commitments, halting a segment of the project creates a domino effect. Enterprises face not only administrative risks but also significant breaches of commercial obligations.

Risks of Project Termination

The highest-tier risk is the total termination of the investment project. The investment registration agency may terminate operations if an investor executes investment activities based on fraudulent civil transactions under civil law provisions.

Models frequently targeted for scrutiny include:

• Splitting projects to evade land-use thresholds;
• Splitting entities to lower total investment capital;
• Executing fraudulent land-lease transactions;
• Indirect transfers via affiliate entities;
• Phasing investments contrary to technical reality.

Once a project is terminated, the enterprise forfeits its developmental progress. Furthermore, restoring the necessary land, environmental, construction, and investment records entails costs far exceeding those of conducting an accurate compliance review from the outset.

Recommendations for Structuring Projects Before Filing

Enterprises should design project structures based on actual commercial and technical reality. Project subdivision should only occur when there is a factual basis for independent operation, not to circumvent legal thresholds.

Before implementation, businesses should audit:

• The specific investment objectives for each phase;
• Boundaries of land parcels;
• Capital sources and implementation timelines;
• Shared infrastructure and inter-entity relationships;
• Requirements for environmental, construction, and FPF permits.

If these elements exhibit high interdependence, enterprises should evaluate the entire project chain as a unified structure. This approach minimizes the risk of being classified as an irregular project-splitting violation.

Transitional Handling and Adjustment Strategies for Existing Projects

Many enterprises currently operating under previous frameworks fear that changes in investment law will necessitate a total re-initiation of procedures. However, not all projects are subject to retroactive enforcement or mandatory immediate adjustments.

Pursuant to Article 77 of the 2025 Law on Investment, investors may continue executing projects legally approved or licensed prior to the new law’s effective date. Nevertheless, when adjusting a project, increasing capital, or expanding scale, enterprises may be pulled into the new regulatory review mechanism.

The focus for enterprises is not merely “old versus new project status,” but rather the scope of the adjustment, capital increase margins, land-use changes, investment objectives, business sectors, and investor structure.

Rights to Continue Implementation under Approved Frameworks

Enterprises currently operating legal projects possess the right to continue implementation according to the content already approved or licensed by competent authorities.

Transitional rights typically include:

• Progress continuity: Proceeding with projects according to already approved timelines.
• Condition maintenance: Retaining investment conditions that were previously applicable.
• Incentive retention: Maintaining investment incentives that remain in effect.
• Document utility: Continuing to use existing legal dossiers without the need to re-apply for Investment Policy Approval solely due to legal changes.

This mechanism stabilizes the investment environment and prevents operational disruption for businesses that have already committed capital or established production systems. However, transitional rights do not imply an “exemption from obligation.” If an enterprise adjusts a project beyond statutory thresholds, authorities may still mandate compliance with the new investment regime.

Adjustment Scenarios Triggering New IPA Obligations

Many enterprises treat project adjustments as simple administrative formalities. In reality, specific changes may trigger a mandatory re-application for Investment Policy Approval or the submission of an amended IPA dossier.

High-risk adjustments include:

• Increases in land-use area exceeding 10% or 30 hectares;
• Changes to investment objectives or project technology;
• Addition of special business sectors;
• Total investment capital increases of 20% or more;
• Changes to project timelines or investor identity.

Particularly, if changes to land-use area, investment capital, or project objectives cross established thresholds, enterprises must audit the entire investment mechanism. Pursuant to Clause 7, Article 255 of the 2024 Land Law, many modifications involving land and land-use purposes may necessitate corresponding adjustments to the investment project and land-use procedures.

Strategic Selection: New Regulation vs. Existing Mechanisms

Applying the existing mechanism is not always more advantageous for the enterprise. In certain cases, new regulations may offer:

• Compressed processing timelines;
• Simplified administrative procedures;
• Lowered investment conditions;
• Enhanced facilitation for divestment or capital mobilization.

Enterprises should evaluate project timelines, capital structures, M&A strategies, expansion needs, IPO readiness, and project transferability. For FDI enterprises, this strategy is critical when modifying foreign ownership ratios, expanding business lines, restructuring parent companies, or transferring shares to investment funds. Selecting the incorrect legal mechanism can result in the loss of investment incentives or the requirement to repeat completed procedures. Consequently, enterprises should perform Legal Due Diligence prior to every significant adjustment.

Bespoke Legal Due Diligence and Licensing Services at Long Phan Consulting Company

Determining whether a project requires Investment Policy Approval is no longer a isolated procedural task. Enterprises must concurrently control land-use rights, environmental compliance, construction, market-access conditions, and transaction structures to mitigate the risk of being forced back into the investment review process during post-inspection audits.

Long Phan Consulting Company supports enterprises with a “compliance-first” approach, standardizing dossiers and identifying legal thresholds early to prevent re-triggered procedures.

Regulatory Compliance and Investment Structure Review

• Legal Project Auditing: Evaluating projects pursuant to Articles 30, 31, and 32 of the 2025 Law on Investment.
• Exemption Assessment: Analyzing IPA exemption eligibility for manufacturing, logistics, commercial, and FDI projects.
• Risk Auditing: Investigating land-use, national defense, security, and market-access conditions for foreign investors.
• Threshold Monitoring: Verifying adjustment thresholds related to land area, investment capital, and operational objectives.

Representation in Investment Procedures and Sectoral Licensing

• IRC Filings: Representing FDI clients in securing Investment Registration Certificates (IRC).
• Dossier Engineering: Drafting and finalizing dossiers for project adjustments, objective modifications, or scale expansions.
• Operational Licensing: Executing environmental, construction, FPF, and conditional business sector licensing.
• Inter-Agency Engagement: Working with the Department of Finance, Industrial Zone Management Boards, and relevant specialized authorities.

M&A Structuring and Post-Audit Risk Control

• Due Diligence: Auditing capital contributions and share acquisition transactions by foreign investors.
• Split-Project Prevention: Mitigating risks associated with non-compliant project splitting.
• Impact Assessment: Evaluating legal impacts when increasing capital, expanding land, or changing ownership structures.
• Compliance Roadmaps: Building comprehensive roadmaps for multi-phase and expansion projects.

Enterprises are invited to submit project files, transaction structures, or investment documents via Email at info@longphanpmt.com or Zalo at +84 906 735 386 for a preliminary assessment by Long Phan Consulting Company prior to implementation.

Frequently Asked Questions about projects that do not require investment policy approval

Correctly identifying the “investment approval” category directly impacts the disbursement schedule, project expansion, and commercial viability of businesses. Many risks arise not at the application stage but at the capital adjustment, land use, or M&A phases involving foreign elements. The questions below focus on the legal “bottlenecks” that CEOs, investors, and legal departments often encounter when implementing investment projects.

Conclusion

Accurately identifying whether a project requires Investment Policy Approval in Vietnam demands strict adherence to the “closed-list” mechanism, while concurrently managing IRC, land-use, environmental, and industry-specific filings. Projects that appear exempt remain vulnerable to compliance failures if expansion thresholds are breached, project splitting is suspected, or national security sensitivities are overlooked. Navigating these regulatory nuances is essential to avoid forced project suspension, costly re-initiations, or severe administrative penalties.

To minimize operational risk and secure a robust compliance roadmap for your investment, contact the senior legal team at Long Phan Consulting Company via our support hotline at 1900636389 for immediate professional consultation and strategic project oversight.