HCMC – The National Assembly has approved the revised Capital Law, granting a broad set of special powers and financial mechanisms to address infrastructure bottlenecks and drive long-term growth.

The law, passed on April 23, introduces 199 special powers for Hanoi City, marking one of the most comprehensive decentralization efforts for the capital city to date. The revised Capital Law will take effect on July 1, 2026.

The legislation comes as Hanoi comes under mounting pressure from traffic congestion and environmental pollution. A key feature is the formal adoption of transit-oriented development (TOD), allowing the city to retain all additional revenues generated from land value increases and infrastructure improvement fees within TOD areas to reinvest in urban rail projects.

Hanoi will also be entitled to retain 100% of revenues from land use fees and land leases, and, for the first time, income from carbon credit transactions, providing a significant boost to its financial capacity for sustainable development.

The National Assembly approves the revised Capital Law on April 23

The law permits Hanoi to pilot new governance models and policies under a controlled framework. It introduces legal definitions for underground and elevated urban spaces, opening the door to multi-layer urban development. To attract investment, companies engaged in research and development (R&D) in Hanoi will be eligible for tax incentives of up to 200% of actual expenses.

The law also grants authorities stronger enforcement tools, including the suspension of electricity and water services for projects that violate planning regulations or fail to meet fire safety standards. Another key provision is the establishment of a capital region development fund to strengthen coordination between Hanoi and neighboring localities in addressing regional infrastructure and environmental challenges. The law also includes safeguards for public officials, exempting them from legal liability when acting in accordance with procedures for the common good, in an effort to encourage innovation and initiative-taking governance.

Hanoi

Hanoi, the capital of Vietnam, is one of Southeast Asia’s most ancient cities, with a history dating back over a thousand years. Founded in 1010 under the name Thang Long, it served as the imperial capital of various Vietnamese dynasties before becoming the capital of a unified Vietnam in 1976. The city is renowned for its rich cultural heritage, blending traditional Vietnamese, French colonial, and modern influences, with landmarks like the Temple of Literature and the Ho Chi Minh Mausoleum.

National Assembly

The National Assembly is the legislative body or parliament of a country, often housed in a significant building that symbolizes democratic governance. Its history varies by nation, but many National Assembly buildings were established after revolutions or independence movements, such as France’s during the French Revolution or South Korea’s after democratization. These assemblies serve as the central venue for lawmaking, political debate, and representing the will of the people.

Temple of Literature

The Temple of Literature in Hanoi, Vietnam, is a historic Confucian temple founded in 1070 under Emperor Lý Thánh Tông. It later became the site of Vietnam’s first national university, the Imperial Academy, which educated scholars for centuries. Today, it stands as a symbol of learning and cultural heritage, featuring well-preserved courtyards and stone stelae recording the names of doctorate recipients.

Ho Chi Minh Mausoleum

The Ho Chi Minh Mausoleum in Hanoi, Vietnam, is the final resting place of Ho Chi Minh, the revolutionary leader and founding father of modern Vietnam. Construction began in 1973, shortly after his death, and the structure was completed in 1975, inspired by Lenin’s Mausoleum in Moscow. It serves as a major historical and cultural site, where visitors pay respects to the preserved body of “Uncle Ho,” symbolizing the nation’s enduring reverence for his legacy.