Vietnam's 2025 Government Reform: Vietnam to Merge Provinces in Major Administrative Overhaul

Hanoi, April 2025 — In a historic move toward administrative reform, the Government of Vietnam has officially launched a comprehensive restructuring plan to reduce the number of its provincial-level administrative units from 63 to 34 by the end of 2025. This transformation, guided by Resolution No.60-NQ/TW and Decision No. 759/QD-TTg, introduces a two-tier local government model and is expected to significantly enhance governance efficiency, decentralization, and policy responsiveness.

Key Changes in Governance Structure

From July 1, 2025, district-level administrative units will cease operations. Cities that serve as provincial administrative centers will be reorganized into wards. Under the new two-tier structure:

• Provincial Level: Includes provinces and centrally governed cities, acting as both policy implementers for central government mandates and issuers of region-specific policies.

• Commune Level: Comprises communes, wards (in mainland areas), and special zones (on islands). This level will gain increased autonomy to issue local legal documents and address community-specific issues under the oversight of the province.

This realignment is expected to reduce the number of commune-level units by 60–70%, enabling a leaner, more responsive government apparatus.

Implementation Timeline

The government has outlined a detailed timeline, with key milestones including:

• April 25, 2025: Guidelines on personnel and asset restructuring at the district level.

• June 30, 2025: Completion of district-level inspections and issuance of resolutions for administrative unit mergers.

• August 15, 2025: Commune-level administrative units complete structural consolidation.

• September 15, 2025: Provincial-level structures go into operation.

• December 31, 2025: National alignment of tax, customs, treasury, and social insurance systems.

Impacts on Vietnam’s Coastal and Maritime Landscape

Post-merger, Vietnam will have 21 coastal provinces, all equipped with seaports, increasing the proportion of coastal provinces from 44% to 62%. The reform is set to enhance Vietnam’s logistics competitiveness, creating mega-port clusters such as:

• Greater Ho Chi Minh City: Merging HCMC, Binh Duong, and Ba Ria–Vung Tau will form a port system with 99 seaports, surpassing the current leader, Haiphong.

• Greater Can Tho: Integration with Soc Trang and Hau Giang will give inland Can Tho direct access to the coast, strengthening the Mekong Delta’s maritime economy.

These changes will make seaport infrastructure more accessible across the country, providing new growth opportunities in logistics, transport, and trade.

Opportunities for the Australian Business Community

The restructuring promises improved administrative processes and larger, more capable provincial units—favorable conditions for foreign investors. However, during the transition, businesses may encounter evolving regulatory landscapes and realignment of local authorities.

AusCham recommends its members:

• Stay informed on structural changes in your area of operation;

• Proactively engage with local authorities;

• Review compliance procedures in light of upcoming changes.

AusCham will continue to monitor this landmark reform and offer updates, insights, and support to its members throughout the implementation phase.

For further inquiries or tailored guidance, please contact the AusCham Advocacy at advocacy@auschamvn.org.