In light of the 2025 Law on Investment and its implementing regulations, which have introduced a number of new provisions concerning the operating term of investment projects, a question frequently raised by investors is: When an investment project is approaching the expiry of its operating term, should the enterprise carry out procedures for adjusting the project’s operating term or for extending the project’s operating term?

Although both procedures serve a similar purpose, namely allowing the project to continue operating beyond its currently approved term, the applicable conditions, legal basis, and practical implementation are not entirely identical. Selecting an inappropriate procedure or preparing the application dossier too late may adversely affect the project implementation schedule and give rise to unnecessary legal risks.

1. Is an FDI Company Required to Take Action When Its Investment Project Is Approaching the Expiry of Its Operating Term?

Yes.

The operating term of an investment project is one of the key particulars recorded in the Investment Policy Approval Decision (if any) and/or the Investment Registration Certificate (“IRC”) of the project.

Under the Law on Investment, upon the expiry of its operating term, an investment project shall be terminated, unless the investor obtains approval from the competent state authority for an extension of the project’s operating term in accordance with applicable laws and regulations.

Accordingly, enterprises should proactively review the operating term of their investment projects well in advance of the expiry date in order to assess the feasibility of adjusting or extending the project term and to prepare the necessary application documents. This will help ensure the uninterrupted continuation of investment activities and mitigate potential legal risks that may arise upon the expiration of the project’s approved operating term.

2. Are the Adjustment of an Investment Project’s Operating Term and the Extension of an Investment Project’s Operating Term the Same?

No.

Although both procedures are intended to allow an investment project to continue operating for a longer period, the adjustment of an investment project’s operating term and the extension of an investment project’s operating term are two distinct legal procedures that apply in different circumstances.

An adjustment of an investment project’s operating term refers to the procedure whereby an investor requests the investment registration authority to amend the project term as recorded in the Investment Registration Certificate (“IRC”) or the investment policy approval document. Pursuant to Article 31.4 of the 2025 Law on Investment, an investor may apply to increase or decrease the operating term of an investment project, provided that the adjusted term does not exceed the maximum duration permitted by law.

By contrast, an extension of an investment project’s operating term is a procedure that allows a project to continue operating after the expiry of its approved term or when the project is approaching the end of its operating period. Pursuant to Article 31.5 of the 2025 Law on Investment, an extension may only be considered where the investor wishes to continue implementing the project and satisfies the conditions prescribed by applicable laws and regulations.

3. What Is the Maximum Operating Term of an Investment Project?

Pursuant to Article 31 of the 2025 Law on Investment, the operating term of an investment project is determined based on factors such as the project’s scale, location, investment sector, and land-use requirements. However, the project term must not exceed the maximum duration prescribed by law. Specifically:

• For investment projects implemented outside economic zones, the maximum operating term is 50 years;
• For investment projects implemented within economic zones, the maximum operating term is 70 years;
• Certain investment projects located in areas with difficult or exceptionally difficult socio-economic conditions, or projects involving large-scale land recovery, substantial investment capital, and a prolonged capital recovery period, may be considered for an operating term of up to 70 years.

The specific operating term of each investment project will be reviewed and determined by the competent authority and recorded in the investment policy approval document (if any) and/or the Investment Registration Certificate.

4. When Should an Enterprise Apply for an Adjustment of an Investment Project’s Operating Term?

As a general rule, an enterprise should consider applying for an adjustment of its investment project’s operating term when all of the following conditions are satisfied:

• The project remains within its approved operating term as stated in the Investment Registration Certificate (“IRC”);

• The current operating term of the project has not yet reached the maximum duration permitted under the Law on Investment; and
• The investor intends to continue implementing the project for a period longer than the currently approved term.

From a practical perspective, adjusting the operating term while the project remains valid generally enables the enterprise to plan its investment activities more proactively and reduces potential legal risks that may arise as the project approaches its expiration date.

5. When Is an Enterprise Required to Carry Out the Procedure for Extending an Investment Project’s Operating Term?

An extension is generally applicable where the project has already reached the end of its operating term and the investor wishes to continue implementing the project.

Notably, Article 28 of Decree No. 96/2026/ND-CP introduces a new mechanism whereby, for projects whose approved operating term is shorter than the maximum duration permitted by law, the investor may, within the 12-month period preceding the project’s expiry date, choose either of the following options:

• Applying for an adjustment of the project’s operating term; or
• Applying for an extension of the project’s operating term.

However, for projects that have already been granted the maximum operating term permitted under the Law on Investment (i.e., 50 years or 70 years, as applicable), there is no legal basis for a further upward adjustment of the project term. In such circumstances, if the investor wishes to continue implementing the project beyond the approved term, the investor must apply for an extension, which will be considered by the competent state authority in accordance with the applicable statutory requirements.

6. Are All Investment Projects Eligible for an Extension of Their Operating Term?

No.

Although the law permits investors to apply for an extension of an investment project’s operating term, approval is not granted automatically and not all projects are eligible for such extension.

Pursuant to Article 31.5 of the 2025 Law on Investment, the following categories of projects are not eligible for consideration for an extension:

• Projects utilizing obsolete technologies that may adversely affect the environment;
• Projects posing a risk of environmental pollution;
• Resource-intensive projects; and
• Projects that are subject to an obligation to transfer assets to the Vietnamese State or the Vietnamese party without compensation upon the expiry of the project term.

In addition to the foregoing statutory conditions, the competent authority may also assess the project’s actual implementation status when reviewing an extension application, including:

• The investor’s capital contribution compliance;
• The progress of project implementation;
• Land-use compliance;
• Fulfilment of financial obligations; and
• Compliance with other applicable legal requirements.

Accordingly, the fact that a project is operating efficiently or generating positive business results does not necessarily mean that an extension application will be approved. Investors should carefully review the project’s legal status and ensure that all required supporting documents are properly prepared before initiating the extension procedure.

7. Should an FDI Enterprise Choose an Adjustment or an Extension of the Project’s Operating Term?

The answer depends on the specific circumstances of the project.

In certain cases, the law does not require an investor to apply for an extension immediately when the project is approaching the end of its operating term. Instead, the investor may still opt for an adjustment of the project term if the applicable legal conditions are satisfied.

Specifically:

(i) Adjustment of the operating term should generally be prioritized where:

• The project remains within its approved operating term;
• The current operating term has not yet reached the statutory maximum; and
• The investor wishes to proactively extend the project duration before the project enters its final stage of operation.

(ii) An extension procedure is generally required where:

• The project has already expired; or
• The project is approaching its expiry date but has already been granted the maximum operating term permitted by law; and
• The investor intends to continue operating the project after the expiration of its originally approved term.

8. How Far in Advance Should an Enterprise Prepare?

The current investment regulations do not prescribe a mandatory deadline for submitting applications for the adjustment or extension of an investment project’s operating term. Nevertheless, from a practical standpoint, enterprises should avoid waiting until shortly before the expiry date to begin preparing the application dossier.

In practice, extending the duration of an investment project often requires a comprehensive review of multiple legal matters, including:

• The project’s land-use rights and land-use term;
• Consistency with applicable planning regulations;
• Compliance with environmental requirements;
• The implementation progress of the project compared with the originally approved schedule;
• The investor’s capital contribution status and actual project implementation; and
• Fulfilment of financial obligations and statutory reporting obligations.

Accordingly, to minimize legal risks and ensure sufficient time to address any issues that may arise during the review process, FDI enterprises are advised to review the operating term of their projects and begin preparing the necessary documentation at least 12 to 18 months prior to the project’s expiry date.

For large-scale projects, land-use projects, or projects subject to investment policy approval requirements, early preparation is particularly important to facilitate a smooth and efficient adjustment or extension process.

Conclusion

Since 2026, Vietnam’s investment laws have drawn a clear distinction between the adjustment of an investment project’s operating term and the extension of an investment project’s operating term. For FDI projects approaching the end of their approved operating term, selecting the appropriate procedure is critical not only to ensuring the continuity of business operations but also to avoiding the risk of project termination due to the expiry of the project term.

Accordingly, before submitting an application, investors should carefully determine:

• Whether the project is still within its approved operating term or has already expired;
• Whether the current operating term has reached the maximum duration permitted by law; and
• Whether the project satisfies the statutory conditions for an adjustment or an extension of its operating term.

A proper legal assessment at the outset will enable enterprises to determine the most appropriate course of action whether to pursue an adjustment of the project term or an extension of the project term in a manner that is both efficient and compliant with the applicable investment regulations.