Vietnam Government Investment Incentives

On 31 March 2026, the Government issued Decree No. 96/2026/ND-CP detailing and guiding the implementation of the Law on Investment No. 143/2025/QH15, the latest investment law adopted by the National Assembly on 11 December 2025. This Decree replaces the entire previous system of implementing regulations, including Decree No. 31/2021/ND-CP, Decree No. 19/2025/ND-CP on special investment procedures, and Decree No. 239/2025/ND-CP.

In addition to streamlining administrative procedures, the most notable feature of Decree 96 is the comprehensively redesigned and more detailed list of investment incentive sectors, clearly reflecting the State’s strategic orientation in the new development phase: high technology, digital transformation, green economy, and sustainable growth.

Encouraged Sectors by the State

Decree 96 divides the list of incentivized sectors into two tiers: Special Investment Incentive Sectors (Group A) and Investment Incentive Sectors (Group B), corresponding to two different levels of incentives.

Group A - Special Investment Incentive Sectors

This group enjoys the highest level of incentives, nearly equivalent to those applicable to projects in areas with extremely difficult socio-economic conditions.

This group enjoys the highest level of incentives, nearly equivalent to those applicable to projects in areas with extremely difficult socio-economic conditions.

1. High technology, strategic technology, and digital transformation

This is the top-priority group, clearly reflecting Vietnam’s ambition to become a regional digital industrial hub. Specifically, activities in this group include:

Application of high and strategic technologies as listed by the Prime Minister; production of strategic technology products.

Production of high-tech products encouraged for development.

Production of software, key digital technology products and services; cybersecurity products.

Construction of artificial intelligence (AI) data centers; development of AI systems.

Research, development, design, production, packaging, and testing of semiconductor chips, one of the national strategic priorities for 2025 – 2030.

Development and operation of concentrated digital technology park infrastructure; investment within such parks.

Incubation of high-tech enterprises; venture capital investment in technology development.

Production of products in the list of prioritized supporting industries.

2. Clean energy and green economy

Production of renewable energy (wind, solar, small hydropower), new energy, clean energy, and energy from waste treatment.

Development of hydrogen energy and green ammonia, considered a future direction of Vietnam’s energy sector.

3. Mechanical engineering and strategic materials

Production of key mechanical products as decided by the Prime Minister.

Production of basic chemicals, pharmaceuticals, and key petrochemicals.

Production of composite materials, lightweight materials, and rare materials.

4. High-tech agriculture

Production, breeding, and hybridization of crop varieties, livestock breeds, aquatic breeds, and forestry plant varieties.

Offshore fishing combined with advanced fishing equipment; fisheries logistics services.

Cultivation, processing, and preservation of agricultural, forestry, and aquatic products; processing of non-timber forest products.

Afforestation, forest protection and development; restoration of natural forests; large-timber forest plantations.

5. Strategic infrastructure

Development and operation of infrastructure for industrial zones, export processing zones, high-tech zones, and economic zones.

Investment in water plants, power plants, roads and bridges, airports, seaports, railways, and urban public transport.

Centralized waste collection, treatment, recycling, and reuse.

6. Healthcare, social services, and culture

Development of specialized and preventive healthcare.

Production of pharmaceutical ingredients, vaccines, medical biological products, herbal and traditional medicines.

Research, formulation, and production of new drugs meeting international GMP standards

Construction of social housing and resettlement housing.

Investment in geriatric centers, elderly care, care for persons with disabilities, and orphan care.

High-performance sports training; sports facilities for international competitions.

7. Large-scale strategic projects

Large-scale investment projects (from VND 6,000 billion, with at least VND 6,000 billion disbursed within 3 years and annual revenue of VND 10,000 billion or employing over 3,000 workers) are entitled to incentives equivalent to those in extremely disadvantaged areas, regardless of location.

Group B — Investment Incentive Sectors

This group is broader, covering most key industrial, agricultural, and service sectors, divided into five main categories:

• Science, technology, and manufacturing: R&D, automobile and parts manufacturing, shipbuilding, electronic components, agricultural machinery, energy-saving products, asbestos substitutes, artificial sand, digital technology products

• Agriculture: cultivation of medicinal plants, production of animal and aquaculture feed, agricultural processing in value chains, organic agriculture, handicrafts, bamboo and rattan products

• Infrastructure and environment: industrial cluster infrastructure, worker housing in industrial zones, wholesale markets, logistics centers, environmental monitoring equipment, centralized wastewater treatment

• Education, healthcare, and social sectors: private educational institutions at all levels, vocational training, medical equipment, sports facilities, public libraries, digital workforce training

• Other sectors: people’s credit funds, microfinance, SME distribution chains, startup co-working spaces, electronic publishing

  
  

Key Investment Incentives in Vietnam

Decree 96 does not specify exact numerical incentive levels, this follows legal practice, as tax incentives are detailed in the Corporate Income Tax Law and specialized decrees. However, in conjunction with the Law on Investment 2025, the Corporate Income Tax Law No. 67/2025/QH15 (effective from 1 October 2025), and Decree No. 320/2025/ND-CP, the incentives can be summarized as follows:

1. Corporate income tax (CIT) incentives

This is the most financially significant incentive, directly impacting enterprise profitability. The standard tax rate is 20%, but eligible projects may enjoy:

• Preferential tax rate of 10% for 15 years, applicable to:

  • Projects in special incentive sectors (Group A)

  • Projects in areas with extremely difficult socio-economic conditions

  • Projects in high-tech zones, high-tech agricultural zones, concentrated digital technology parks, and economic zones in disadvantaged areas

• Preferential tax rate of 10% for the entire project duration (without the 15-year limit) for certain cases such as high-tech enterprises and high-tech agricultural enterprises

• Preferential tax rates of 15% and 17% for standard incentivized sectors and certain investment areas

• Tax exemptions and reductions for a defined period, often the most attractive incentive:

  • 4-year exemption + 50% reduction for the following 9 years: for projects in special incentive sectors and projects in extremely disadvantaged areas

  • 2-year exemption + 50% reduction for the following 4 years: for standard incentivized projects

The exemption/reduction period starts from the first year of taxable income (or the fourth year if no taxable income is generated in the first three years).

Additionally, innovative startups are exempt from CIT for 2 years and receive a 50% reduction for the following 4 years. Small and medium-sized enterprises are exempt from CIT for the first 3 years from initial registration.

2. Import duty exemptions

Eligible projects are exempt from import duties on:

• Machinery, equipment, and transport means imported to form fixed assets

• Raw materials, supplies, and components imported for domestic production during the initial phase when such items are not yet produced locally

This is particularly important for large-scale manufacturing projects where machinery and inputs account for a significant share of total investment capital.

3. Land rent and land use fee exemptions/reductions

This incentive significantly affects long-term operating costs, especially as industrial land rents continue to rise. Under Decree No. 103/2024/ND-CP (still in effect):

• Exemption from land rent during the construction period (up to 3 years) for incentivized sectors or locations

• Full exemption from land rent for the entire lease term for worker accommodation projects in industrial zones

• Land rent reductions based on the level of sectoral and geographical incentives

Under Decree 96/2026, projects required to make performance deposits may receive a 25 – 50% reduction in deposit levels if they fall within incentivized sectors, reducing initial capital pressure.

4. Accelerated depreciation and increased deductible expenses

Eligible enterprises may apply accelerated depreciation and increase deductible expenses when determining taxable income. This helps reduce taxable income in the early years when cash flow is typically weaker, and accelerates capital recovery.

5. Special incentives for large-scale strategic technology projects

This is a completely new feature compared to previous decrees. Under Article 21 of Decree 96, special investment incentives and support are granted to three groups:

• Innovation centers, R&D projects, and AI/cloud/5G infrastructure projects in strategic technology sectors with capital of at least VND 3,000 billion, with at least VND 1,000 billion disbursed within 3 years

• Semiconductor chip manufacturing, AI data centers, and key digital technology products with capital of at least VND 6,000 billion, with at least VND 6,000 billion disbursed within 5 years

• Projects in special incentive sectors with capital of at least VND 30,000 billion

The specific level and duration of special incentives are decided directly by the Prime Minister on a case-by-case basis, including mechanisms that may differ from standard legal provisions. This represents the highest level of flexibility Vietnam has applied to attract global technology companies.

Key Notes

Principle of performance-based incentives:

Investment incentives are conditional and tied to actual performance. If a project fails to meet the conditions, the enterprise is not entitled to incentives and must repay any benefits received. This aims to prevent policy abuse.

Significant changes in incentivized locations:

Decree 96 updates the list of incentivized areas based on new commune-level administrative units following administrative restructuring. Investors should reassess project locations accordingly.

Upgraded incentives for industrial and digital zones:

Projects in industrial and export processing zones enjoy incentives equivalent to disadvantaged areas; projects in economic zones, high-tech zones, and concentrated digital technology parks enjoy incentives equivalent to extremely disadvantaged areas.

Foreign investors:

The Market Access Restrictions List (Appendix I) is clearly categorized into 23 prohibited sectors and 62 conditional access sectors for foreign investors, enabling more accurate investment planning.

Overall, Decree No. 96/2026/ND-CP conveys a clear message from the Vietnamese Government: investment incentives are no longer broadly distributed but selectively concentrated in sectors that generate high added value, promote digital transformation, protect the environment, and build an autonomous economy. This presents both a major opportunity and higher requirements for enterprises seeking to benefit from State incentive policies.

References

Law on Investment No. 143/2025/QH15, passed by the National Assembly on December 11, 2025.

Law on Corporate Income Tax No. 67/2025/QH15, passed by the National Assembly on June 14, 2025.

Decree No. 96/2026/ND-CP, issued by the Government on March 31, 2026, detailing and guiding the implementation of the Law on Investment 2025.

Decree No. 320/2025/ND-CP, issued by the Government on December 15, 2025, guiding the implementation of the Law on Corporate Income Tax 2025.

Decree No. 103/2024/ND-CP, issued by the Government on July 30, 2024, on land rent and land use fees.