Vietnam Plans Stricter Security Screening for Investment Projects

(Vietnam Insider) – Foreign investors in Vietnam could soon face significantly tighter scrutiny, as the Ministry of Public Security has proposed a sweeping reform requiring police approval for a wide range of development projects.

According to a draft decree published on the ministry’s website, the reform aims to “ensure national security and the absolute leadership of the Communist Party” in economic development. The proposal, which remains open for inter-ministerial feedback until September 22, could be signed into law by the prime minister if no major revisions are requested.

Expanded Security Oversight

If enacted, the decree would give the police far-reaching authority to vet projects across critical sectors such as energy, telecommunications, ports, oilfields, and satellite services. The scope could even extend to less strategic areas—including industrial parks and golf resorts.

Currently, Vietnam conducts only limited security checks on new projects, with police primarily serving in a consultative role. The proposed reform would mark a dramatic shift by effectively granting the security ministry veto power over investment decisions.

“The decree signals that in socio-economic development, security must be guaranteed, and national interests cannot be traded for economic benefits,” the ministry stated.

Implications for Foreign Investors

Export-driven Vietnam is highly reliant on foreign investment, with global multinationals such as Samsung Electronics, Honda, and Intel maintaining major operations in the country. U.S. tech giants SpaceX and Amazon also plan to launch satellite communication services in Vietnam.

If approved, the new rules could heighten compliance costs, slow project approvals, and create additional layers of uncertainty for investors. A Vietnam-based legal consultant, speaking anonymously, warned that the reform could “effectively give the police the power to veto projects.”

Daewoo Engineering and Construction (Daewoo E&C) will invest US$388 million in a property development project in Star Lake City in Hanoi, Vietnam.

Political and Institutional Context

The proposal reflects the growing influence of Vietnam’s security apparatus in both governance and the economy. Party chief Tô Lâm, the country’s most powerful leader, previously headed the Ministry of Public Security. Meanwhile, the military maintains substantial commercial interests, including through its control of state-owned telecom giant Viettel.

The draft decree also highlights the ministry’s view of an increasingly complex global environment, characterized by strategic competition among major powers—a likely reference to U.S.–China rivalry.

Broader Reach Beyond Strategic Assets

Interestingly, the scope of the proposal goes beyond traditional national security assets. Vietnam’s fast-expanding golf industry—currently around 100 courses, with ambitious growth plans—would also require police approval. Notably, the Trump family business is partnering with a local developer on a large golf resort project near Hanoi.

The ministry also intends to establish a new system to supervise foreign aid projects, ensuring what it calls a “comprehensive appraisal of impacts on security, social order, and worker communities.”

Investor Takeaway

While the draft remains subject to revisions, the proposed changes underscore Vietnam’s balancing act: attracting foreign capital while reinforcing political and security controls. For investors, the reform could translate into longer approval timelines, higher compliance obligations, and the possibility of project-level interventions by security authorities.

A similar decree in 2019 emphasized defense considerations but was narrower in scope and granted the army less explicit authority. The new proposal would represent a significant step further, raising questions among corporate and diplomatic circles about its potential impact on Vietnam’s investment climate.

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Source: Vietnam Insider