Looking Back: 2024 and Gazing Into: 2025
Looking Back: 2024
2024 was an eventful year for Vietnam, as it witnessed political leadership changes, radical legislative reforms across a number of key sectors, and robust foreign direct investment (“FDI“) inflows.
In terms of leadership changes, Vietnam filled three key leadership positions in 2024: the Party General Secretary, the President, and the chairman of the National Assembly. This followed the passing of Party General Secretary Nguyen Phu Trong, who was most well-known for being the driver of Vietnam’s aggressive anti-corruption campaign.
FDI inflows reached an all-time high in 2024, surpassing the yearly target set by the National Assembly. Manufacturing and processing industries remain the leading contributor (accounting for over 68%), with Singapore standing as Vietnam’s leading source of foreign investment in the year. Despite the FDI growth, however, certain industry sectors had yet to fully recover or remained sluggish in 2024:
- The renewable energy sector was impacted by a temporary freezing of tariffs and policies that had, in prior years, promoted the rapid uptake of solar and wind power projects. Vietnam’s green transition faced financial constraints within the State budget, while the country’s state-owned electric utility, Vietnam Electricity (“EVN“), reported record losses. Nationwide inspections of operating projects across 2024 raised anxieties of existing and prospective investors of utility-scale projects. Nevertheless, lawmakers have enacted new regulations to provide clarity and promote the development of the sector, including Decree 80/2024/ND-CP on the direct power purchase agreement mechanism and, more recently, the Law on Electricity.
- Challenges in the real estate sector spilled over from 2023, as developers and investors continued to face administrative red-tape in securing approvals and progressing their projects. This is despite a notable buyer demand. Nevertheless, the industry is optimistic that the Law on Land (and its various guiding decrees) passed in 2024 will assist in clearing these concerns.
- In the technology space, the Law on Data was fast-tracked and passed towards the tail-end of 2024, while the (Draft) Law on Personal Data Protection and (Draft) Law on Digital Technology Industry are in the works. Development of these laws were driven by the Ministry of Public Security (“MPS”), who has played (and will continue to play) a more pivotal role in policy development in Vietnam.
Gazing Into: 2025
Many of the instrumental laws that were passed over the past two years will come into effect in 2025. Therefore, 2025 will be an important year as businesses will be able to observe the true effect of the State’s policymaking agenda in driving new and fostering existing investments in the country. In the healthcare sector, amendments to the Law on Pharmacy will take effect, while the foreign investment in the education sector will see key changes through Decree 124/2024/ND-CP.
In the energy sector, the Law on Electricity will come into effect, in tandem with the Government’s ongoing efforts to enact policies to support and transform its energy sector to achieve the country’s Net Zero targets.
The implementation of the recent Law on Telecommunications will unfold in 2025, covering not only traditional telecoms businesses, but also players in the cloud computing, data centre and over-the-top communication service space. Companies in the internet business will also be faced with new operational rules (and potentially, registrations) under Decree 147/2024/ND-CP on the management, provision and use of internet services and online information.
In the real estate sector, the new Law on Land and Law on Real Estate Business will come into effect – expected to not only streamline the existing administrative roadblocks faced by investors, but also potentially open up new channels through which foreign investors may participate in what traditionally has been a tightly closed sector.
Full Report
Click on the link below for the full report which provides summaries of the key legal developments related to the above areas.
Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice