In the context of a constantly fluctuating global economy, attracting foreign direct investment (FDI) has become a key factor in driving sustainable economic growth. To enhance competitiveness and create a favorable investment environment, many countries, including Vietnam, are implementing the ‘Green Lane’ policy – a special mechanism designed to streamline procedures, shorten approval times, and offer attractive incentives for FDI enterprises.
What opportunities and challenges will this policy bring for foreign investors? What should Vietnam do to optimize the benefits of the Green Lane policy in the race to attract FDI? Let’s explore these questions with DNP Viet Nam Law Firm.
1. Overview of the Green Lane Policy:
The Green Lane policy aims to simplify administrative procedures by applying post-audit mechanisms instead of pre-approval processes for FDI projects. Rather than undergoing a prolonged evaluation phase, priority enterprises will be granted fast-track investment approval, with compliance checks conducted during operational phases.
The Green Lane model has been successfully implemented in several countries, including Singapore, Malaysia, and other ASEAN nations. In Vietnam, the revised Investment Law and other legal amendments (Law No. 57), effective from January 15, 2025, establish the framework for the Green Lane system. This initiative aims to minimize administrative complexity and accelerate investment project implementation for FDI enterprises.
Legal Framework for Reference:
- Decree No. 10/2025/ND-CP – Outlines criteria, sectors, and application procedures for Green Lane projects.
- Circular 02/2025/TT-BKHDT – Provides detailed guidance on post-audit mechanisms.
- Investment Law 2020 (Amended 2025) – Establishes foundations for faster investment licensing.
2. Eligibility & Beneficiaries of the Green Lane Policy:
– General Eligibility Criteria: To qualify for Green Lane incentives, businesses must meet the following conditions:
- Full compliance with Vietnam’s legal regulations.
- Transparent financial management with clear corporate governance.
- Operate in priority sectors such as: High-tech industries (AI, semiconductor, blockchain, biotechnology), Critical supply chains (logistics, trade, essential goods production).
- Hold special certifications such as: Customs priority enterprise status or Green Lane QR code certification (for transportation and logistics firms).
– Targeted Beneficiaries: The Green Lane policy applies to FDI enterprises in key sectors, including: Customs & trade facilitation, Investment & business operations and Logistics & transportation.
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3. Benefits of the Green Lane Policy for FDI Enterprises:
- Time Savings: Investors who register for investment will receive approval within 15 days. Upon obtaining an investment certificate, they are exempt from additional procedures related to construction, environmental assessments, and fire safety, allowing them to commence projects immediately.
- Enhanced Competitiveness for Enterprises: By simplifying administrative procedures, FDI enterprises can focus on project execution and expanding investment within industrial and economic zones. This leads to job creation for local workers and strengthens industrial competition.
- Increase in FDI Capital Inflows: With the Green Lane policy and additional incentives in taxation and investment sectors, Vietnam’s favorable investment environment is expected to attract large-scale foreign enterprises. ng a 2% year-on-year increase.
- Improved Investment Environment: Vietnam maintains “political stability”, a crucial factor in attracting FDI. The current emphasis on foreign investment policies serves as a foundation for economic reform, making the country more attractive to global investors.
4. Risks of the Green Lane Policy:
4.1. Trade Fraud & Smuggling:
- Reduced customs inspections may allow businesses to misuse Green Lane privileges for illegal trade practices.
- Potential risks include tax evasion, counterfeit goods, and illicit imports.
4.2. Environmental Risks:
- Without strict environmental regulations, some enterprises may use outdated high-pollution technologies.
- This could negatively impact Vietnam’s sustainability goals & ecological balance.
4.3. Transfer Pricing & Tax Evasion:
- Some FDI enterprises may exploit tax incentives by implementing transfer pricing schemes, leading to government revenue losses.
- Stronger tax oversight & audits are needed to mitigate these risks.
4.4. Risk of Attracting Low-Tech Investments:
- Without clear high-tech criteria, low-value, energy-intensive industries may flood the market.
- This could slow Vietnam’s transition to a green economy.
5. Key Measures for Effective Implementation of the Green Lane Policy in Vietnam:
– Strengthening Infrastructure & Digital Transformation:
- Investment in digital infrastructure is crucial for streamlining Green Lane implementation.
- Government agencies must modernize IT systems to facilitate seamless digital approvals.
– Developing a Skilled Workforce:
- Specialized training programs are needed to enhance administrative efficiency.
- Regulatory bodies should improve legal & compliance expertise to ensure Green Lane efficiency.
– Policy Awareness & Business Support:
- FDI enterprises must receive proper guidance on Green Lane incentives & procedures.
- Public-private sector collaboration is crucial for ensuring policy transparency & effectiveness.
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