Vietnam’s National Assembly Approves Broad Reforms at Extraordinary Session
The BGA Vietnam Team, led by Managing Director Nguyen Viet Ha, wrote an update on the National Assembly’s extraordinary session.
Context
- The National Assembly concluded its 17-day extraordinary session with an intensive agenda in Hanoi August 24. During the session, deputies reviewed and passed 15 laws and 13 resolutions, debated seven additional draft laws, endorsed new government personnel appointments and provided comments on several critical infrastructure projects. The session was intended to address critical outstanding issues of major infrastructure projects and create a framework for key socioeconomic development priorities.
Significance
- The National Assembly ratified the appointment of Nguyen Tien Hai as minister of home affairs for the 2026-2031 tenure. He replaced Do Thanh Binh, who was appointed Communist Party chief of Can Tho City. Formerly party chief of An Giang province, Hai had served as acting minister since July 21 amid a series of personnel rotations following the latest Party Central Committee plenum.
- Quang Ninh and Bac Ninh provinces in northeastern Vietnam have been upgraded to centrally administered cities, giving them the same first-level administrative status as Vietnam’s major municipalities. The designation strengthens their urban governance mandate and central-level visibility. Quang Ninh is positioned as a national hub for the blue economy, tourism and services, while Bac Ninh is expected to become a high-tech, innovation-driven industrial center integrated into global supply chains.
- The National Assembly approved a 30 percent reduction in personal and corporate income tax for household businesses, individual business owners and small enterprises with annual revenue of VND 10 billion ($382,500) or less in 2026-2027. The measure is expected to lower state tax revenue by about $122 million in 2026 and $134 million in 2027. However, the government believes the tax relief will ease financial pressure, improve cash flow and support small business growth, enabling greater budget contributions over time.
- The National Assembly also approved policy adjustments and special mechanisms to accelerate several major infrastructure projects:
- Dividing the Ninh Thuan Nuclear Power Plant project in central Vietnam into three independent projects to allow the construction of the Russian-backed Ninh Thuan 1 to proceed first.
- Approving the Hanoi Ring Road 5 project, a 350-kilometer route through Hanoi and six neighboring provinces, with initial investment of nearly $11 billion.
- Allocating an additional $3.3 billion to the Lao Cai-Hanoi-Hai Phong railway to upgrade the Hanoi-Hai Phong city-center section to double track and add a branch line connecting to regional railways.
- Amendments to the Customs Law are intended to advance e-customs and tighten oversight of cross-border e-commerce. Key compliance changes include mandatory electronic identification and authentication for cross-border e-commerce participants and an extension of the maximum post-clearance inspection period from 10 to 20 days. The law also strengthens intellectual property enforcement by allowing customs authorities to proactively suspend clearance of suspected infringing goods and extending intellectual property controls to goods in transit, not only imports and exports.
- Amendments to the Investment Law reduce the number of conditional business lines by 62, cut 786 business conditions and simplify 232 procedures. The amendments also add new digital sectors, including digital assets and data analysis and processing, and update Annex IV with a list of 137 conditional business lines. According to the minister of finance, the main objective is to shift from a “pre-check” to a “post-check” regulatory approach.
- The revised Petroleum Law grants PetroVietnam greater authority to approve key field development procedures, which could help shorten project timelines. It also introduces incentives for marginal, deepwater, remote offshore and technically challenging fields, including improved cost-recovery mechanisms for commercially difficult resources. PetroVietnam can use profits to offset certain costs from unsuccessful projects and expenses exceeding the state budget for basic investigations, giving it more flexibility to manage exploration risks. The law also broadens the regulatory framework to cover carbon capture and storage, offshore energy and high-tech petroleum services, creating potential opportunities for investors and technology providers across the wider energy value chain.
- A resolution on “special mechanisms” provides the government with more flexibility to address problems with solar and wind power projects through decisions or decrees. The projects include transitional projects that are not entitled to the feed-in-tariff mechanism.
- The Law on Urban Development establishes Vietnam’s first comprehensive legal framework for urban development. Notable provisions include decentralization and flexibility for local governments, allowing them to pilot innovative policies, streamlining urban planning through a single integrated master plan and establishing free trade zones with preferential investment incentives. The law also emphasizes regional infrastructure connectivity, expands local administrative autonomy and provides legal safeguards for public officials who pursue innovative initiatives in good faith.
Implications
- The extraordinary session signals the government’s continued push to align legislation with administrative restructuring, decentralization and growth priorities. For businesses, the most relevant outcomes include streamlined investment conditions, tighter customs and e-commerce oversight, targeted tax relief for small enterprises, new mechanisms for major energy and infrastructure projects and expanded legal frameworks for urban development, petroleum, renewable energy and the digital transformation.
We will continue to keep you updated on developments in Vietnam. If you have any comments or questions, please contact BGA Vietnam Managing Director Nguyen Viet Ha at vietha@bowergroupasia.com
Best regards,
BGA Vietnam Team
×
