Vietnam embarks on major decentralization drive with 28 newly issued decrees

17 Jun 2025    2 minute read
Decentralization 28 Decrees

In brief

The Vietnamese government has recently enacted a sweeping set of regulatory reforms aimed at decentralizing authority across a wide range of sectors. A total of 28 decrees have been issued, transferring significant administrative powers from central ministries to local administrations, particularly at the provincial and commune levels.

Contents

In detail

1. Key sectors affected

These reforms span across critical areas such as investment, construction, land, environmental management, education, healthcare, intellectual property, trade and taxation.

This move marks a pivotal shift in Vietnam's governance model, designed to streamline administrative processes, enhance local autonomy and improve public service delivery.

2. Structural changes in governance

As part of this broader decentralization effort, the government is also restructuring its administrative framework. Notably, this includes the following:

  • The number of cities and provinces has been reduced from 63 to 34.
  • The district level of administration in Vietnam is set to be completely phased out by 1 July 2025, paving the way for a two-tier administrative structure comprising the provincial level and the grassroots level, such as communes and wards.

These changes reflect a strategic push to simplify Vietnam's bureaucratic system and bring decision-making closer to the people.

3. Implications for businesses and clients

With many licensing and procedural responsibilities now shifted to local authorities, businesses operating in Vietnam may experience changes in how they interact with relevant regulators. Thus, it is crucial to assess operational adjustments needed to align with the new local-level procedures.

We are ready to support clients in navigating these changes by clarifying how the new decrees affect specific sectors, advising on compliance strategies under the new local frameworks, and assisting with updated licensing and procedural requirements.

4. Further reading

Notably, the 28 newly issued Decrees on decentralization are provisionally set to be effective for a maximum period of 20 months, from 1 July 2025, to 28 February 2027. This duration may be extended or shortened, subject to the decision of a competent authority.

This specified timeframe is intended to align with the amended Law on the Organization of Local Government ("Law"), which was passed by the National Assembly on 16 June 2025. According to the transitional provisions of the Law, no later than 1 March 2027, all legal normative documents containing provisions on the organization, and powers of local governments must be amended, or replaced to ensure consistency with the new administrative unit structure and responsibilities of local government as stipulated by the Law.

For a full list of the 28 decrees and access to their full texts, please see the official government release here.

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Tuan Linh Nguyen, Government Affairs Manager, has contributed to this legal update.

Contact Information
Manh Hung Tran
Partner at BakerMcKenzie
Hanoi
Read my Bio
tmh@bmvn.com.vn
Ngoc Trung Tran
Associate
Hanoi
ngoctrung.tran@bmvn.com.vn

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