Key Takeaways
- Vietnam’s standard corporate income tax rate is 20%, but qualifying projects may receive rates of 10% for 15 years or 17% for 10 years.
- Certain qualifying projects may receive up to four years of corporate income tax exemption followed by a 50% reduction for up to nine years.
- Incentivized industries under the 2025 Investment Law include high technology, semiconductors, digital technology, renewable energy, environmental protection, infrastructure, supporting industries, healthcare, and education.
- Eligible locations include disadvantaged areas, industrial parks, export processing zones, high-tech zones, digital technology zones, free trade zones, and economic zones.
- An Export Processing Enterprise does not automatically receive preferential corporate income tax treatment. Its project must independently satisfy the applicable industry, location, or project-scale requirements.
- Incentives must generally be claimed, documented, accounted for, and maintained throughout the relevant incentive period.
- Vietnam’s new Investment Law took effect on March 1, 2026.
Vietnam offers investment incentives to projects that support priority industries, strategic technologies, infrastructure development, environmental protection, and disadvantaged locations. Available benefits may include preferential corporate income tax rates, tax holidays, import-duty exemptions, land-related concessions, accelerated depreciation, and government support measures.
Eligibility is determined by the project’s activities, location, scale, technology, and satisfaction of statutory conditions. Foreign ownership or Export Processing Enterprise status alone does not automatically qualify an investor for every incentive.
What Are Vietnam Investment Incentives?
Vietnam investment incentives are tax, land, customs, and support measures granted to qualifying investment projects. They are intended to direct capital toward priority economic activities and locations, including technology, innovation, strategic manufacturing, clean energy, infrastructure, and areas requiring additional development.
In accordance with Article 14 of the 2025 Investment Law, statutory incentives comprise corporate income tax reductions, customs duty waivers on imports, land rental concessions, accelerated asset depreciation, higher deductible expense allowances, alongside other measures determined by the Government. It also provides several forms of investment support, including infrastructure, training, credit, research and development, technology transfer, green transition, and digital transformation support.
Vietnam’s incentive system is project-based. Investors therefore need to evaluate the specific project rather than assume that every company in a broadly promoted industry will receive the same benefits.
Why Vietnam Uses Investment Incentives
Vietnam uses incentives to attract investment that contributes to:
- Science, technology, and innovation
- Semiconductor and digital technology development
- Higher-value manufacturing and supply chains
- Renewable and clean energy
- Environmental protection and the circular economy
- Infrastructure development
- Agriculture and rural development
- Education and healthcare
- Employment and regional development
- Technology transfer and research and development
Vietnam recorded approximately USD 38.42 billion in inward foreign investment in 2025, including newly registered capital, additional registered capital, and foreign acquisitions. Estimated disbursed FDI reached USD 27.62 billion, an increase of 9% from 2024.
STATISTIC-SOURCE: National Statistics Office of Vietnam
Which Projects Qualify for Vietnam Investment Incentives?
Under Article 14 of the 2025 Investment Law, potential beneficiaries include:
- Projects in incentivized business sectors
- Projects in incentivized geographical areas
- Large-scale, labor-intensive, or nationally important projects prescribed by the Government
Under the statutory provisions, incentive schemes are eligible for both new and expansion investment project. The detailed treatment of an expansion depends on the type of incentive and whether the expansion satisfies the applicable capital, fixed-asset, capacity, technology, or other requirements.
Incentivized Business Sectors
Article 15 of the Investment Law identifies broad policy objectives for incentivized sectors, including:
- Science, technology, innovation, and digital transformation
- Digital technology and semiconductor industries
- High-value industrial clusters and supply chains
- Renewable, new, and clean energy
- Environmental and natural-resource protection
- Agriculture, forestry, and the marine economy
- Infrastructure
- Education, training, and healthcare
- Supporting industries
- Pharmaceuticals
- Key chemical and mechanical industries
The Government is responsible for issuing and updating the detailed list of qualifying sectors. Being active in a generally encouraged industry is not enough when the implementing rules require a particular product, certification, technology, or project structure.
Incentivized Locations
The 2025 Investment Law includes the following geographical categories:
- Areas with difficult socioeconomic conditions
- Areas with especially difficult socioeconomic conditions
- Industrial parks
- Industrial clusters
- Export processing zones
- High-tech zones
- Concentrated high-tech agricultural zones
- Concentrated digital technology zones
- Free trade zones
- International financial centers
- Economic zones
However, the availability and level of each tax incentive must still be determined under the relevant tax legislation. For example, the geographical categories eligible for corporate income tax incentives under the Corporate Income Tax Law are not identical in every respect to the broader location list in the Investment Law.
What Corporate Income Tax Incentives Are Available?
The Corporate Income Tax Law No. 67/2025/QH15 took effect on October 1, 2025 and applies from the 2025 corporate income tax period. The standard corporate income tax rate is 20%.
Qualifying income may receive preferential rates and exemption or reduction periods.
COMPARISON:
Incentive category | Preferential rate | Possible exemption and reduction |
Qualifying high-priority new projects | 10% for 15 years | Up to four years’ exemption, followed by a 50% reduction for up to nine years |
Certain other incentivized new projects | 17% for 10 years | Up to two years’ exemption, followed by a 50% reduction for up to four years |
Special investment projects | Project-specific enhanced treatment may apply | Subject to statutory conditions and competent approval |
Ordinary non-incentivized businesses | Generally 20% | No project-based tax holiday |
The 10% rate for 15 years may apply to qualifying new investments in areas such as:
- High-tech application and high-tech development
- Strategic technology
- High-tech incubation
- Software production
- Cybersecurity products and qualifying services
- Key digital technology products and services
- Semiconductor research, design, manufacturing, packaging, and testing
- Artificial-intelligence data centers
- Qualifying supporting industries
- Renewable and clean energy
- Waste-to-energy production
- Environmental protection
- Infrastructure of special importance
- Qualifying large-scale manufacturing projects
- Projects eligible for special investment incentives
The 17% rate for 10 years may apply to certain new investments involving high-grade steel, energy-efficient products, agricultural machinery, automobile manufacturing or assembly, other digital technology products, and specified incentivized locations.
The preferential-rate period normally begins in the first year in which the project generates revenue. The exemption or reduction period normally begins in the first year of taxable income. If the project does not generate taxable income during its first three revenue-generating years, the exemption or reduction period generally begins in the fourth year.
Incentives for Expanded Investments
An operating project that expands its scale, increases capacity, upgrades technology, reduces pollution, or improves environmental performance may qualify for additional incentives.
Depending on the circumstances:
- Additional income may receive the remaining incentives of the existing project; or
- If the original incentive period has expired, qualifying additional income may receive a new exemption and reduction period without receiving a new preferential tax rate.
The enterprise may need to account separately for the income generated by the expansion. The 2025 Corporate Income Tax Law also establishes fixed-asset, investment, and capacity tests for determining whether an expansion qualifies.
High-Tech and Semiconductor Investment Incentives
High-tech incentives should be evaluated under the 2025 Corporate Income Tax Law and the 2025 Investment Law. General statements that every business using advanced technology automatically receives a 10% rate are inaccurate.
Potentially eligible projects include:
- Application of technologies included in an officially prioritized high-tech list
- High-tech research and development
- High-tech or strategic-technology incubation
- Semiconductor chip research, design, manufacturing, packaging, or testing
- Production of key digital technology products
- Construction of artificial-intelligence data centers
- Qualified supporting-industry production
- Certified high-tech enterprises and high-tech agricultural enterprises
Projects may need to obtain and maintain a high-tech enterprise certificate, high-tech application project certificate, supporting-industry confirmation, or another prescribed approval.
A project’s business registration wording alone does not establish eligibility. Authorities may examine its actual technology, products, research activities, revenue, employees, investment capital, and compliance with certification conditions.
Special Investment Incentives for Large Strategic Projects
Article 17 of the 2025 Investment Law provides a special regime for investment projects with a major socioeconomic impact.
Potential beneficiaries include qualifying projects involving:
- Innovation and research and development centers
- Large data-center infrastructure
- Cloud-computing infrastructure
- 5G and more advanced mobile infrastructure
- Strategic technologies and strategic-technology products
- Key digital technology products
- Semiconductor activities
- Artificial-intelligence data centers
- Other specially incentivized industries meeting the required capital and disbursement conditions
Special incentives are not automatically available because a project operates in one of these fields. The project must satisfy the investment thresholds, disbursement schedule, sector requirements, and other conditions established by the Government.
Under the Corporate Income Tax Law, the Prime Minister may approve an enhanced rate for qualifying special projects, subject to the statutory limits. This may include reducing the ordinary 10% preferential rate by up to 50% and extending the incentive period within the limits prescribed by law.
Projects granted an Investment Registration Certificate or investment-policy approval before the 2025 Investment Law took effect are excluded from the special regime under Article 17, although transitional protections and other ordinary incentives may still apply.
Import-Duty Incentives
Qualifying projects may receive import-duty exemptions for:
- Machinery and equipment imported to create fixed assets
- Specialized means of transport forming part of a technological line
- Components, parts, molds, and accessories required for qualifying equipment
- Raw materials, supplies, and components used for eligible production activities
The scope of an exemption depends on the Law on Import and Export Duties and its implementing regulations. Investors must normally maintain appropriate customs declarations, fixed-asset records, import lists, and evidence showing that imported goods are used for the eligible project.
Import-duty incentives should not be treated as a blanket exemption. Goods diverted to a different purpose, sold domestically, or used outside the qualifying project may create duty and reporting obligations.
Land-Related Incentives
Qualifying projects may receive:
- Land-rent exemptions
- Land-rent reductions
- Land-use levy incentives
- Land-use tax incentives
The level and duration depend on land legislation, the project’s industry, its location, and the method through which the investor obtains land.
An investor leasing premises from an industrial-park developer does not necessarily receive the same direct state land-rent incentive as a project leasing land directly from the State. The commercial lease agreement, infrastructure charges, and land-related state incentives should therefore be reviewed separately.
Are Export Processing Enterprises Automatically Incentivized?
No. Export Processing Enterprise status principally establishes an export-processing and customs framework. It does not, by itself, guarantee preferential corporate income tax rates or tax holidays.
An EPE must independently qualify through:
- An incentivized business sector
- An eligible location
- A qualifying project scale
- A high-tech or supporting-industry status
- Another incentive category recognized by law
Under Decree No. 35/2022/ND-CP, EPEs operate under rules applicable to non-tariff zones and must satisfy customs-supervision conditions.
Issue | Export Processing Enterprise treatment | Ordinary enterprise treatment |
CIT incentive | Not automatic; depends on the project’s industry, location, or other qualifying criteria | Also determined by the project’s qualifying criteria |
Customs relationship with the domestic market | Generally treated as an import-export relationship | Ordinary domestic transactions generally do not follow the same non-tariff-zone rules |
Physical and customs supervision | Must satisfy prescribed separation and customs-control conditions | No EPE-specific customs perimeter |
Domestic sales | Permitted only subject to applicable customs, tax, licensing, and accounting requirements | Conducted as ordinary domestic business, subject to normal regulations |
VAT treatment | May involve zero-rated supplies or non-taxable customs-zone transactions when statutory conditions are satisfied | Normal domestic VAT treatment generally applies |
Statements that EPEs can routinely recover input VAT should be treated cautiously. Because EPEs operate under a non-tariff-zone framework, the VAT outcome depends on the transaction, supplier, documentation, and whether the relevant goods or services qualify for zero-rating. Certain services supplied to non-tariff zones are specifically excluded from the zero percent rate.
Vietnam’s current VAT framework is governed by Law No. 48/2024/QH15 and Decree No. 181/2025/ND-CP, both effective from July 1, 2025.
Investment Incentives Versus Investment Support
Investment incentives and investment support are related but legally distinct.
Investment incentives generally reduce a project’s tax, duty, or land-related costs. Investment support may help the project develop infrastructure, train workers, access credit or production premises, undertake research, transfer technology, enter markets, or implement digital and green transformation.
Support should not be assumed to mean that a project will receive a direct cash grant. The available program, responsible authority, eligibility conditions, funding source, and approval procedure must be confirmed.
How Investors Claim and Maintain Incentives
A practical incentive review should cover the following steps:
- Define the investment project clearly.
- Identify its products, services, technology, investment capital, capacity, location, implementation schedule, and projected revenue.
- Map the project against the correct legal criteria.
- Review sector, location, scale, technology, certification, and disbursement requirements.
- Record incentives in the project documentation where required.
- Relevant incentives or their legal basis may need to appear in the Investment Registration Certificate, investment-policy approval, or other competent decision.
- Complete required certifications.
- High-tech, science and technology, supporting-industry, or other regulated status may require separate certification.
- Establish separate accounting.
- Incentivized income should generally be separately tracked from non-incentivized income. If separate accounting is not possible, statutory allocation methods must be followed.
- Retain supporting records.
- These may include invoices, customs declarations, import lists, fixed-asset registers, land documents, employment records, technology evidence, and project progress reports.
- Monitor conditions throughout the incentive period.
- Eligibility is not assessed only at the beginning of the project. Failure to maintain applicable conditions may result in additional tax, late-payment interest, and penalties.
Common Investment-Incentive Mistakes
Investors should avoid:
- Assuming foreign ownership automatically creates incentive eligibility
- Treating EPE status as an automatic CIT incentive
- Relying on a broad industry description instead of the detailed qualifying list
- Applying an incentive to all company income rather than qualifying project income
- Starting the preferential period from the wrong tax year
- Failing to separate incentivized and non-incentivized income
- Claiming import-duty exemption without maintaining customs and fixed-asset records
- Assuming every transaction with an EPE receives zero percent VAT
- Overlooking disbursement, capacity, technology, or certification conditions
- Continuing to apply an incentive after the project no longer satisfies its conditions
Under the Corporate Income Tax Law, failure to satisfy incentive conditions may lead to retrospective tax collection and administrative sanctions.
How the 2025 and 2026 Laws Affect Existing Projects
The Corporate Income Tax Law contains transitional provisions for existing projects. When a project qualified under the law applicable at the time it was licensed and also satisfies the new rules, the enterprise may generally choose the applicable incentive treatment for the remaining period, subject to the statutory conditions.
The Investment Law also protects qualifying investors against less favorable subsequent incentive changes for the remaining incentive period, with exceptions involving national defense, security, public order, public health, social morality, or environmental protection.
Existing projects should conduct a transition review instead of automatically replacing their current incentive calculation with the new regime.
Conclusion
Vietnam investment incentives can materially improve project economics, particularly for high-tech, semiconductor, digital, supporting-industry, clean-energy, infrastructure, and regionally important investments. However, the regime is highly conditional.
Investors should determine eligibility before finalizing the project structure, location, capital schedule, and operating model. They should also distinguish between ordinary investment incentives, special incentives, investment support, and the customs treatment available to Export Processing Enterprises.
Premia TNC can assist foreign investors with project structuring, company incorporation, investment registration, tax-incentive reviews, EPE establishment, and ongoing accounting and regulatory compliance in Vietnam.
Frequently Asked Questions
1. What is Vietnam’s standard corporate income tax rate?
The standard corporate income tax rate is 20%. Preferential rates may apply to qualifying projects, industries, or locations.
2. Can a foreign-owned company receive Vietnam investment incentives?
Yes. Incentives generally depend on the investment project rather than the nationality of the investor. A foreign-owned company must satisfy the same applicable sector, location, scale, technology, and compliance conditions.
3. What is the common CIT incentive for a qualifying high-tech project?
A qualifying project may receive a 10% rate for 15 years, an exemption for up to four years, and a 50% reduction for up to the following nine years. Certification and other statutory conditions may apply.
4. Does an Export Processing Enterprise automatically receive a CIT holiday?
No. EPE status does not automatically create CIT eligibility. The project must independently qualify under an incentivized industry, location, scale, or other statutory category.
5. Can an investment project receive more than one incentive?
A project may satisfy several incentive categories. For the same income, the investor generally applies the most favorable eligible corporate income tax treatment rather than combining incompatible rates.
6. When does a corporate income tax holiday begin?
It generally begins in the first year the qualifying project generates taxable income. If the project has no taxable income during the first three years after generating revenue, the incentive period generally begins in the fourth year.
7. Can an expanded investment project receive incentives?
Yes. An expansion may qualify if it satisfies the relevant capital, fixed-asset, capacity, technology, environmental, sector, or location criteria. The treatment differs depending on whether the original project’s incentive period remains available.
8. Are Vietnam investment incentives automatic?
No. The investor must establish eligibility, complete any required certification or registration procedures, correctly calculate the incentive, retain supporting documents, and continue satisfying the applicable conditions.
