Imagine the situation, your staff is confusing and the officers are also confusing. A licensing application get returned because the authorities have changed, or the wrong address have been submitted.
These hiccups may sound small. But they can delay your project. Stall a transaction. Interrupt operations.
And yet, behind the redirections and resets, something bigger is happening.
Vietnam is redesigning the way it governs under Vietnam local government reform.
With the launch of the Vietnam local government reform, the country is transitioning from a three-level model to a two-level system. Districts are being removed. Power is being redistributed. Processes are being restructured.
This is not just a government shuffle. It is a legal and administrative shift that touches permits, land use, compliance, and corporate governance.
Foreign investors who adapt early will gain speed. Agility. Predictability. They will be able to move while others are still mapping the new terrain.
In here, we explain what the reform means, where the risks lie, and how to prepare. If you act now, you can avoid setbacks, and outpace competitors.
What Vietnam Local Government Reform Actually Changes
On June 16, 2025, Vietnam’s National Assembly passed Law No. 72/2025/QH15, eliminating the middle tier of local government: districts.
Under the new model, governance now flows directly between:
- Provinces
- Communes/Wards
The rationale is straightforward. Less hierarchy. More service. Better speed.
For foreign investors, however, this structural change requires immediate attention. The Vietnam local government reform affects:
- Licensing pathways
- Signatory authorities
- Legal jurisdiction in disputes
- Administrative recordkeeping
- Invoice and seal accuracy
What used to be handled at district level may now move to the province. Or to the commune. Or both, depending on your industry and location.
Understanding the new structure under Vietnam local government reform is not optional. It is the only way to keep your business legally safe and operationally efficient.
The Future Will Reward the Agile
Following the Vietnam local government reform, the government’s promises are bold and clear:
- Fewer steps in licensing
- Unified contact points for investors
- More direct public service delivery
- Reduced administrative costs
In practice, the Vietnam local government reform offers long-term efficiency, especially for businesses dealing with construction, land, labor, and expansion.
But these benefits would not come equally to everyone.
Companies that adapt early will:
- Get approvals faster
- Avoid legal mismatches
- Build relationships with newly empowered authorities
- Lock in speed advantages while others are still adjusting
ThisVietnam local government reform does not just cut layers. It rewrites the rules of access. And in that shift lies your opportunity.
A Week in the Transition
Let’s imagine some scenarios.
Your company is applying for a new construction permit. You file the form with the same district office you have always used. A week later, it’s returned. That office no longer processes permits.
Your tax accountant notices that your invoices list an address under a district name. But that district no longer exists.
These are not hypotheticals. They’re the kinds of disruptions already being reported in early adopting provinces.
The Vietnam local government reform is live. Its effects are real. But so are the rewards for those who saw it coming.
Seven Realities Foreign Investors Must Face and Use
Roles Have Been Reassigned
District People’s Committees have been removed. Their former responsibilities, land use, tax verification, construction sign-off are now split between provincial and commune authorities.
The split is not uniform. It varies by province. Which means businesses must check carefully who now signs what.
Company Address Changes Trigger Compliance Chains
A change in administrative naming does require updates to:
- Enterprise Registration Certificates (ERC)
- Investment Registration Certificates (IRC)
- Seals and official stamps
- Printed VAT invoice addresses
Skipping a single update could cause a mismatch in your next audit or payment cycle.
This is why the Vietnam local government reform is as much a compliance issue as a governance change.
Public Systems Are Updating at Different Speeds
Vietnam’s digital systems, business registration, tax portals, labor licensing are modernizing.
But not all are moving together. Some have already adopted commune-level identifiers. Others still lag behind.
The solution is not to wait. It is to manually check each submission platform.
Commune Officials Now Matter A Lot
Under the old system, communes mostly handled personal or minor matters.
Now they oversee:
- Land approval in various stages i.e. land use right, land use purpose change, land allocation…
- Environmental paperwork
- Small-scale construction licenses
Early engagement with commune officials could offer faster processing and better coordination.
Real Estate and Land Use May Be Reinterpreted
Land allocation decisions are highly sensitive to administrative boundaries.
With district removal:
- Land-use history may need to be re-verified
- Property tax zones may change
- Some project approvals may require confirmation from a new authority
Not All Provinces Move at the Same Speed
While the law is national, implementation is local.
Some provinces adopted the reform early, others are just beginning and few may not complete the transition until next year.
That means your legal and compliance team must track the timeline for each location.
The Vietnam local government reform 2025 is not one reform, it is 63 provincial campaigns happening in parallel.
Delays Are a Short-Term Certainty
During this shift, expect:
- Mixed guidance from officials
- Extra paperwork requests
- Confusion from all involved.
These are not failures. They’re growing pains. And they reward the prepared.
Step-by-Step Guide to Stay Ahead
Step 1: Conduct a Legal Document Audit
Look for all instances of district-level addresses in:
- ERC/IRC
- Licensing files
- Contracts
- Lease agreements
- Staff forms
Step 2: Request Written Clarification
Submit formal requests to the provincial DPI and tax office. Ask:
- Is address re-registration required?
- Who signs future licensing documents?
Keep their replies on record.
Step 3: Update All Public-Facing Documents
Revise the address line on:
- Printed invoices
- Company seals
- Client contracts
- Letterheads and registration info
Step 4: Map the New Administrative Chain
List key functions (licensing, inspection, labor, land). Identify which commune or provincial department now handles each.
Update your internal workflow to match.
Step 5: Notify Key Partners and Vendors
Alert banks, clients, and suppliers of the updated administrative designation. Include scanned documents or a formal notice.
Step 6: Train Your Local Team
Even junior staff need to understand:
- Where to go
- What forms to use
- Which names and codes are now valid
Step 7: Add Safeguards in Contracts
Include:
- “Change of Authority” cooperation clause
- “Jurisdictional Delay” clauses for licensing and compliance
These will protect you if a delay causes financial loss.
FAQs on Changes Impact in Vietnam Local Government Reform
Do I need to change my office address?
Your paperwork must reflect the new administrative naming.
Will the government notify me?
It is your responsibility to stay updated with provincial announcements.
What happens if I ignore the change?
Invoices may be rejected. Permits may be delayed. Banks may pause transactions. It is not a fine, it might impact your progress.
Are all provinces affected?
Yes. But implementation is staggered. Some are fast, some slower.
When will things stabilize?
Most changes in Vietnam local government reform should align by 2026. Until then, stay proactive.
Reform Rewards Readiness
This reform is not just a policy. It is a reset.
The Vietnam local government reform 2025 is reshaping how the country handles governance, service delivery, and business administration.
There will be hiccups. But also opportunities. Less delay. More clarity. Better coordination.
Only those who move early will benefit fully.
Update your documents. Train your team. Rewrite your map.
While others are confusing, you will already be adaptive and moving on.
About ANT Lawyers, a Law Firm in Vietnam
We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers has lawyers in Ho Chi Minh city, Hanoi, and Danang, and will help customers in doing business in Vietnam.
Source: https://antlawyers.vn/update/vietnam-local-government-reform-2025.html
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