Following the passing of Nguyen Phu Trong, who led Vietnam’s most prominent anti-corruption campaign in recent history, investors and international observers closely watched the political transition. His successor, To Lam, a former Minister of Public Security and now the 13th President of Vietnam as well as General Secretary of the Communist Party, has since provided greater clarity on the country’s direction. Under his leadership, Vietnam is undergoing a sweeping governmental overhaul, kickstarting the “era of national rise.”
To commemorate the 80th anniversary of Vietnam’s Independence Day on 2 September 2025, we explore the country’s ongoing administrative reforms, including the restructuring of ministries and the reorganization of provincial boundaries and share insights on how these changes could influence Vietnam’s investment landscape.
Challenges and Opportunities for Investors
Vietnam’s persistent issues with excessive bureaucracy and red tape have long been a major concern for investors and business owners [9]. Building on the momentum of the “blazing furnace” anti-corruption campaign, the sweeping reforms aim to address these concerns by streamlining and modernizing the administrative system and thereby enhancing policy efficiency and responsiveness. One of the most significant changes, cutting down the number of provinces by nearly half, is also expected to boost the provinces’ competitiveness, and foster greater synergy in the implementation of large scale economic and infrastructural development plans [10].
However, these sweeping changes, made within the span of just nine months, pose several challenges to businesses. Short-term disruptions in administrative, logistics, and legal procedures and processes are inevitable. The two remaining administrative tiers, provincial and commune / ward, might be overburdened and experience confusion as they adapt to their new responsibilities and workload. Furthermore, there is uncertainty pertaining to the issuance and reissuance of permits, licenses, and land-use approvals, as ministries have been consolidated and administrative boundaries have been redrawn.
Conclusion
Vietnam’s leaders have been able to push through one of the country’s most ambitious administrative and structural reorganizations at unprecedented speed. This demonstrates their willingness to endure short-term pain, in pursuit of long-term national gains. These changes, combined with an emphasis on innovation and sustainability, are expected to enhance Vietnam’s appeal to investors, unlock greater economic potential, and support its goal of becoming a middle-income country by 2030. As President To Lam reportedly said in December 2024, “… because if we want to have a healthy body, sometimes we must take bitter medicine and endure pain to remove tumours [11].”
Thanh Nguyen, Senior Consultant at StoneTurn, contributed to this article.
Get in touch with StoneTurn for support in assessing risks and navigating Vietnam’s evolving reform landscape.
[1] https://www.straitstimes.com/asia/se-asia/worry-confusion-as-vietnam-slashes-public-jobs
[11] https://www.dw.com/en/what-is-vietnams-administrative-revolution/a-72415042; https://vietnamnet.vn/tong-bi-thu-muon-co-mot-co-the-khoe-manh-doi-khi-phai-uong-thuoc-dang-2347443.html
