To promote sustainable socio-economic development, the Vietnamese government offers investment incentives for strategic projects in high-impact sectors that align with national development goals, particularly in science, technology, digital transformation, and renewable energy. Such support motivates investors to execute projects more efficiently by maximizing resource allocation and cutting down on long-term operating expenses.

Incentives are time-limited and performance-based. To remain eligible, investors must consistently meet all statutory requirements throughout the incentive period.

To help investors fully leverage available incentives, Hung Phi Law Firm presents an overview of Vietnam’s legal framework on investment incentives.

1. Overview of investment incentives in Vietnam for Foreign Investors

Key legal insights into investment incentives in Vietnam

1.1. Forms of investment incentives

While current laws do not explicitly define “investment incentives”, they are generally understood as state-backed benefits granted to investors. These incentives target specific sectors and regions to drive economic restructuring, aligning with the national socio-economic development strategy.

According to Clause 2, Article 14 of the Vietnamese Law on Investment 2025, forms of investment incentives include:

– Corporate income tax incentives, including application of a lower rate of corporate income tax for a certain period of time or throughout the investment project execution; exemption from and reduction of tax and other incentives prescribed by the Law on Corporate Income Tax.

– Exemption from import tax on goods imported to form fixed assets; raw materials, supplies and components for manufacturing purposes in accordance with regulations of law on import and export tax;

– Exemption from and reduction of land levy and land rents;

– Accelerated depreciation, increasing the deductible expenses upon calculation of taxable income;

– Other investment incentives as prescribed by the Government.

Important notes: 

– Investment incentives shall be given to new investment projects and expansion projects. (Clause 5, Article 14 of the Vietnamese Law on Investment 2025). 

– The level of each type of incentives shall be specified by regulations of the Law on Taxation, the Law on Accounting and the Law on Land. (Clause 6, Article 14 of the Vietnamese Law on Investment 2025). 

1.2. Eligible entities for incentives

According to Clause 1, Article 14 of the Vietnamese Law on Investment 2025, the following entities qualify for investment incentives:

– Investment projects in business lines eligible for investment incentives specified in Article 15 of the Vietnamese Law on investment 2025;

– Investment projects located in the areas eligible for investment incentives specified in Article 15 of the Vietnamese Law on investment 2025;

Important note: Incentives under Point b, Clause 1, Article 14 of the Vietnamese Law on Investment 2025 shall not apply to the following projects:

• Projects on investment in mineral mining under the Law on Geology and Minerals;
• Projects on investment in manufacturing/sale of goods/services subject to special excise tax according to the Law on Special Excise Tax, except for projects on manufacturing of automobiles, aircrafts and yachts;
• Projects on investment in commercial housing construction prescribed by the Law on Housing.

– Investment projects with large capital scale, investment projects employing a large number of workers, or key and nationally important investment projects that are consistent with the socio-economic development orientation in each period as prescribed by the Government.

1.3. Key principles for applying investment incentives

According to Article 20 of Decree 31/2021/ND-CP, the application of investment incentives is governed by the following principles:

(1). Investment project whose capital is at least VND 6,000 billion are eligible for the same investment incentives as prescribed for investment projects in extremely disadvantaged areas.

(2). The investment projects located in rural areas employing at least 500 employees and projects employing persons with disabilities are eligible for the same investment incentives as prescribed for investment projects in disadvantaged areas. 

(3). Investment projects in business lines eligible for investment incentives in disadvantaged areas are eligible for the same investment incentives as prescribed for investment projects in extremely disadvantaged areas.

(4). The specific investment incentives for the investment projects mentioned in Clauses 1, 2 and 3 of Article 20 of Decree 31/2021/ND-CP shall be applied in accordance with regulations of law on tax, accounting and land.

(5). Regarding an investment project that is eligible for various levels of investment incentive at the same time, the highest level shall apply.

(6). Investment incentives remain applicable during corporate restructuring (mergers, acquisitions, or conversions) and project transfers under the following principles:

• Succession of rights: Entities formed through restructuring or investors acquiring a project shall inherit all existing incentives, provided they continue to satisfy the original eligibility criteria.

• Divided projects: For projects formed via demergers or splits, incentives are applied based on the specific conditions met by each new component for the remaining incentive period.

• Merged projects: Projects formed via mergers will continue to enjoy incentives based on the original conditions of each pre-merger project. If different incentive levels apply to merged components, the investor may enjoy each level separately for the remainder of the term.

(7). If an Industrial Park or Export Processing Zone is rezoned, converted, or its infrastructure operations are terminated, existing investment projects within these zones will continue to benefit from their granted incentives. These incentives remain valid as specified in the project’s licensing documents (such as the IRC or Investment Policy Approval) or under the regulations in effect at the time of the initial investment.

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Enterprise Registration Certificate (ERC) in Vietnam – Procedures for Foreign Investors

2. How investment incentives are applied in Vietnam

Implementation of Investment Incentives under Vietnamese Law

Pursuant to Article 23 of Decree 31/2021/ND-CP, the procedures for implementation of investment incentives are outlined below:

– Decision on investment guidelines approval, investment registration certificate, decision on investor approval shall define the forms, bases, and eligibility for investment incentives. (Clause 1, Article 23 of Decree 31/2021/ND-CP).

– Based on the incentives specified in decision on investment guidelines approval, investment registration certificate, decision on investor approval, investors shall claim their entitlements directly with the relevant authorities for each respective incentive type. (Clause 2, Article 23 of Decree 31/2021/ND-CP).

– According to Clause 3, Article 23 of Decree 31/2021/ND-CP, incentives for entities and projects specified in Clause 5, Article 19 of Decree 31/2021/ND-CP are based on:

• For Science and Technology Enterprises: The Science and Technology Enterprise Certificate.
• For Hi-Tech Agricultural Enterprises: The Certificate of Hi-Tech Agricultural Enterprise.
• For Hi-Tech Application Projects: The Hi-Tech Project Certificate.
• For Supporting Industry Projects: The Supporting Industry Incentive Certificate.
• For projects involving technology transfer that falls under the List of Technologies Encouraged for Transfer, the required document is a Certificate of Technology Transfer Encouraged for Transfer in accordance with the regulations of the Prime Minister.

– For investment projects that do not fall under the cases specified in Clauses 2 and 3, Article 23 of Decree 31/2021/ND-CP, investors shall self-assess their eligibility under Article 19 of Decree 31/2021/ND-CP and relevant legal regulations, determine and claim applicable incentives from the relevant authorities. 

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KEY HIGHLIGHTS OF THE VIETNAMESE LAW ON INVESTMENT 2025

3. Practical considerations for investment incentives in Vietnam

Investment incentives: critical considerations

– Self-assessment & responsibility: Incentives are typically self-determined and declared by the investor. They are responsible for ensuring all eligibility criteria are met to avoid future tax arrears and penalties.

– New and expansion projects: Incentives vary significantly between greenfield (new) and expansion projects. While new setups typically qualify for full tax exemptions, expansions face stricter eligibility criteria and require separate accounting to track and claim specific tax benefits.

– Disbursement timelines: Failing to meet committed capital scales or disbursement schedules can result in the loss or reduction of granted incentives.

4. Hung Phi Law Firm – Investment Legal Advisory for Foreign Investors

Hung Phi Law Firm – Expert legal counsel for investors

Hung Phi Law Firm is a reputable and trusted legal partner. With years of specialized expertise, we deliver strategic solutions that streamline investment process, ensure regulatory compliance, and maximize efficiency. We help investors build a solid foundation for their business activities, saving them valuable time and resources for long-term success.

Below are the key investment legal services we offer:

– Investment Legal Advisory, including:

• Vietnamese investment policies; 
• State policies and national guidelines regarding planned areas and investment incentives;
• Forms of investment;
• Sectors, trades and market access conditions applicable to foreign investors;
• Vietnamese legal framework for investment in sectors such as finance and banking, energy, oil and gas, infrastructure, e-commerce,…

– Investment Licensing and Legal Procedures, including:

• Obtaining the Investment Registration Certificate (IRC) and the approval of investment guidelines;
• The establishment of 100% foreign-invested enterprises, joint ventures; investment under forms of PPP, BCC contracts, etc;
• Contributing capital or purchasing shares/ stakes in other business organizations;
• Obtaining business licenses for sectors such as trade, logistics, education, and manufacturing,…

– Legal Due Diligence and M&A Advisory, including:

• Conducting legal due diligence for mergers and acquisitions;
• Reviewing corporate, land, labor, and contractual compliance;
• Advising on transaction structures and risk mitigation measures.

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Vietnam’s Reliable Law Firm for Foreign Businesses

5. Frequently asked questions

5.1. What are the areas eligible for investment incentives?

Under Clause 2, Article 15 of the Vietnamese Law on Investment 2025, regions eligible for investment incentives include:

– Disadvantaged and extremely disadvantaged areas;

– Industrial parks, industrial clusters, export-processing zones, hi-tech zones, high-tech agricultural zones, centralized digital technology zones, free trade zones, international financial centers and economic zones.

5.2. Does Hung Phi Law Firm offer online consultation services?

Yes. We provide online legal advice via phone, email, Zalo, or WhatsApp,…. Our experienced lawyers offer flexible scheduling to ensure the most effective results and service quality for every client.