What Should Startups and Foreign Investors Prepare After Vietnam’s Provincial Mergers?

Vinex Official
Jun 16, 2025
2 min read

Vietnam's administrative landscape is undergoing a major transformation. Starting July 1, 2025, the country will consolidate its 63 provinces down to 34 administrative units, according to Resolution 40/2024/QH15. For startups and foreign direct investors (FDI), this change presents both compliance risks and strategic opportunities.

What Should Startups and Foreign Investors Prepare After Vietnam’s Provincial Mergers?

1. Update Your Business Registration Address

One of the most urgent tasks is to update your registered business address to reflect the new administrative names. Failure to do so can lead to:

Invalid tax invoices due to mismatched administrative divisions
Suspended tax codes or administrative penalties
Loss of previously granted investment incentives tied to the old location

Legal basis: Law on Enterprises 2020, Law on Tax Administration 2019

2. Reassess Eligibility for Investment Incentives

Vietnam classifies certain locations as “specially difficult socio-economic areas” for investment purposes. After the mergers, some regions may be reclassified, opening new opportunities for investors to:

Enjoy reduced Corporate Income Tax (CIT) rates for up to 15 years
Receive land lease exemptions or reductions
Access government-funded infrastructure support

Check local announcements and the latest updates under Decree 31/2021/ND-CP.

3. Review Banking and Foreign Exchange Transactions

The mergers may result in reassignments of provincial banking jurisdictions, affecting how your funds are monitored or transferred, especially if you rely on foreign loans or capital contributions. Key things to review:

Loan contracts with domestic banks
Capital remittance processes
Exchange rate mechanisms depending on the new province

4. Use This Change as a Strategic Opportunity

Rather than see the mergers as merely administrative, use this moment to restructure:

Open new branches or representative offices in newly prioritized areas
Reallocate capital to regions with favorable post-merger policies
Negotiate with local governments for customized investment support

Final Thoughts

What should startups and foreign investors prepare after Vietnam’s provincial mergers?

Start by taking proactive legal and strategic steps: update your address, revalidate your incentives, optimize your capital structure, and realign your expansion roadmap.