Vietnam's National Assembly Pushes for Business Condition Cuts, Balancing Deregulation with Oversight

Vietnam's National Assembly is moving to significantly reduce the number of business sectors with conditional requirements under an amendment to the Investment Law. This initiative aims to institutionalize the central government's directive to cut at least 30% of business conditions. National Assembly Chairman Tran Thanh Man stressed that the focus should not solely be on the quantity of sectors removed, but on genuinely improving the investment and business environment by consulting thoroughly with the business community and affected parties. Historically, the 2014 Investment Law listed 267 conditional sectors, which have been progressively reduced, with the current amendment proposing to remove an additional 58. However, Chairman Man highlighted persistent issues, noting that many businesses still face numerous conditions, licenses, and approvals, with some being formalistic and lacking clear quantitative metrics, thereby hindering investment and business operations. To address these fundamental problems, Chairman Man proposed that conditional requirements should be maintained only for sectors truly essential for national defense, security, social order, public morality, public health, and environmental protection. He also suggested evaluating the necessity of each sector based on risk assessment and exploring alternatives to business conditions, such as technical standards, inspections, supervision, and violation handling. For sectors that have developed stably, where businesses can assume self-responsibility, and post-inspection mechanisms are adequate, he called for their removal from the conditional list to facilitate businesses and ensure a fair and equitable business environment. He emphasized a strong shift from pre-inspection to post-inspection, reducing compliance costs, enhancing corporate self-responsibility, strengthening risk-based inspections, and promoting the application of digital technology in management and supervision. Furthermore, he called for streamlining regulations by consolidating conditional business requirements, ensuring they are clear, specific, transparent, measurable, executable, and verifiable, thus preventing differing interpretations and applications by various agencies and localities. He also proposed establishing a mechanism for periodic review to promptly remove sectors or conditions that no longer align with practical realities or international practices, especially in emerging areas like digital technology, innovation, and digital finance. Concerns were raised by some National Assembly deputies regarding the pace and implementation of deregulation. Specifically, for the water supply business, which directly impacts public health, caution was advised before removing it from the conditional sector list, especially pending the establishment of alternative management methods. The current law is set to take effect from March 1, 2027, but delays in related legislation could create a regulatory gap. Similarly, issues were raised regarding the care services for the elderly, disabled, and children, where the effective dates of alternative standards and the law itself show a mismatch. Additionally, there was support for prohibiting the sale of nitrous oxide (N₂O) for human respiratory use outside of medical, food technology, and chemical research purposes.