The Government Approves the Reduction and Simplification of Administrative Procedures in 16 Sectors: A Policy Breakthrough in Institutional Reform to Promote the Investment and Business Environment

In order to continue improving the socialist-oriented market economy institutions, enhancing the investment and business environment, and strengthening national competitiveness, the Prime Minister has issued a Decision approving a plan to reduce and simplify regulations related to production and business activities in 16 sectors. At the same time, the Government will review and amend investment and business conditions that are no longer suitable for practical implementation.

This is one of the key administrative reform measures of strategic significance, demonstrating the Government’s strong commitment to building a service-oriented, transparent, efficient administration that places enterprises at the center of development.

1. Scope of application: 16 sectors directly impacting production and business activities

Pursuant to Decision No. 1643/QD-TTg approved by the Prime Minister, the reduction and simplification plan is implemented across 16 state management sectors, including:

• Alcohol production and trading
• Food safety
• Automobile manufacturing and assembly
• Supporting industries
• Tobacco
• Gas trading
• Trade promotion
• Import and export
• Science and technology
• Standards, metrology and quality
• Management of multi-level marketing activities
• E-commerce
• Petroleum trading
• International trade
• Industrial explosives and explosive precursors
• Electricity activities

The reductions focus on administrative procedures that cause practical difficulties, are no longer consistent with the current legal framework, or can be shifted to post-inspection mechanisms, thereby reducing compliance costs and improving regulatory efficiency.

2. Review and reduction of investment and business conditions in 12 conditional business lines

Alongside administrative procedure reform, the Government has approved a plan to simplify or abolish part or all of the investment and business conditions in 12 conditional business sectors, including:

• Alcohol production and trading
• Tobacco trading
• Gas trading
• Petroleum trading
• E-commerce
• Multi-level marketing business
• Import and export
• Trading in goods and activities directly related to goods trading by foreign service providers in Vietnam
• Electricity activities
• Industrial explosives and explosive precursors
• Safe food production and trading
• Rice production, trading, and export

This review is conducted based on the principle of ensuring state management requirements while avoiding unnecessary restrictions on enterprises’ freedom of business as stipulated in Article 7 of the 2020 Law on Investment.

3. Reform of internal administrative procedures: Enhancing the effectiveness and efficiency of state management

To ensure consistency in institutional reform, the Government also approved the reduction and simplification of internal administrative procedures in the following five sectors:

• Oil and gas
• Border trade
• Trade promotion
• Competition management
• Consumer protection

This is an important step toward a modern administrative governance model with streamlined structures, reduced processing time, and improved access to public services for businesses and citizens.

4. Notable specific reform measures

a. Abolition of three conditions for alcohol wholesale trading

To enhance feasibility and reduce compliance burdens on enterprises, three conditions for alcohol wholesale trading have been abolished, including:

• Being an enterprise established in accordance with law
• Having an alcohol wholesale distribution system in the locality with at least one alcohol retailer
• Having a letter of introduction or principle agreement from a manufacturer, distributor, or another wholesaler

This represents a significant step in eliminating formalistic conditions that are no longer appropriate in the context of digitalization and trade integration.

b. Complete removal of conditions for the issuance of tobacco wholesale licenses

The Government has decided to abolish all four conditions for granting tobacco product wholesale licenses, including:

• Legal status requirements of enterprises
• Business location requirements outside prohibited areas
• Distribution system requirements (minimum of two retailers)
• Letters of introduction from suppliers

This removal aligns with administrative reform principles aimed at lowering market entry barriers while maintaining state control over special consumer goods.

c. Reduction of conditions for gas import and export traders

Accordingly, fire prevention and firefighting requirements will be shifted from pre-inspection to post-inspection, and the following two conditions are abolished:

• Having LPG cylinders or lawful LPG cylinder lease contracts
• Having gas filling stations that meet safety standards

This reflects the application of risk-based management and the transition from pre-inspection to post-inspection in line with international practices.

d. Abolition of all conditions for petroleum general agents

The Government has decided to abolish all business conditions applicable to petroleum general agents and annul related provisions under Decree No. 95/2021/ND-CP and Decree No. 83/2014/ND-CP. This aims to eliminate unnecessary intermediary models and restructure the petroleum distribution system toward greater market orientation, competition, and transparency.

e. Reduction of conditions for petroleum retail agents

Specifically, the requirement that managers and employees must hold certificates of training in fire prevention, firefighting, and environmental protection has been abolished, thereby reducing compliance costs while still ensuring safety through post-inspection mechanisms and supplier-side standardization.

5. Institutional reform orientation – A key driver of economic development

The approval and implementation of this comprehensive plan to reduce and simplify administrative procedures and investment and business conditions goes beyond mere technical administrative reform. It reaffirms the Government’s consistent orientation toward developing a modern, internationally integrated market economy, in which:

• Freedom of business as guaranteed by the Constitution and the Law on Investment is respected
• Transparency, openness, and efficiency of the state administrative system are enhanced
• Innovation, digital transformation, and sustainable development are encouraged

6. Conclusion

This round of reductions and simplifications represents a strong step forward in the administrative reform roadmap and the improvement of the legal framework for business activities. For law firms, enterprises, and investors, timely awareness of these reforms not only facilitates legal compliance but also creates opportunities to optimize investment and operational strategies.

Our Law Firm stands ready to accompany clients in reviewing, adjusting, and updating legal dossiers and business licenses, and in providing comprehensive legal support aligned with the latest legal developments.