Summary of tax incentives for foreign-invested enterprises
The Vietnamese government offers numerous investment-related business incentives and is continually making further improvements through both reforms and by further upgrading incentives to maintain the country’s high appeal to foreign investors.
Tax incentives tend to be one of the most important among investment incentives to foreign investors and are one of the most attractive features of the Vietnamese business landscape.
Vietnam’s Law on Investment specifies the three forms of incentives that are available to companies operating within the country, in Section 1, Article 15.1:
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Incentive Type |
Description |
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Application of a CIT rate lower than the standard 20% for a certain period or the project’s lifetime. |
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Exemption or reduction of import duties/tax on goods imported as fixed assets, raw materials, supplies, and parts. |
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Exemption or reduction of land rents and land levies. |
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Note: CIT incentives are available to both foreign and local investors to promote investment in sectors or areas aligned with national development strategies. The two main CIT incentives are preferential tax rates (reduced rates) and tax holidays (periods of exemption or reduction). |
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These various incentives are applied to investments by economic zone, industrial sector, region, and other special applications, such as large-scale investments.
A summary of the applicable incentives can be found in the following sections.
Summary of CIT incentives (Effective from October 2025)
Key CIT incentive structures
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CIT Rate |
Duration or condition |
Eligible sectors, or projects |
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10% |
Up to 15 years (extendable) |
High-tech, software, network security, digital technology, R&D, semiconductors, AI data centers, renewable energy, etc. |
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15% |
Full project life |
Certain agricultural and socialization projects in difficult socio-economic areas |
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17% |
10 years or full time |
New investment projects in preferential industries, SMEs, and certain financial institutions |
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20% |
Standard rate |
All other enterprises |
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32-50% |
N/A |
Petroleum and gas exploration and exploitation |
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40-50% |
N/A |
Rare minerals (silver, gold, gemstones, platinum, tin, wolfram) |
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Special notes:
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Tax holidays and reductions
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Incentive Type |
Duration/Details |
Eligible Projects/Sectors |
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Tax Exemption |
Up to 4 years |
High-tech, software, renewable energy, prioritized sectors, large-scale projects |
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50% CIT Reduction |
Up to 9 subsequent years |
Same as above |
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Shorter Tax Holidays |
2 years exemption + 4 years 50% reduction |
New investment projects in certain preferential industries or difficult areas |
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Extended Incentives |
Up to 15 years or 1.5x standard period for large projects |
Projects with ≥ VND 12,000 billion investment, globally competitive products, or significant employment |
Expansion investment incentives
Enterprises expanding scale, increasing capacity, or innovating technology in incentivized sectors/areas can enjoy tax incentives for the remaining period of the original project.
If the original project’s incentive period has expired, additional income from expansion may be eligible for new exemption/reduction periods, provided certain investment thresholds are met (e.g., fixed asset value increases by at least 20%).
Incentives for prioritized sectors
Certain sectors in Vietnam are encouraged for investment, including industries that the government plans to incentivize, prioritize, or which are beneficial to society:
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Class |
Description |
Incentives |
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High Tech |
IT, biotechnology, new materials, automation, supporting products, R&D, software production |
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Large Scale |
Manufacturing with ≥ VND 12,000 billion investment, advanced technology, or large employment |
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Social Importance |
Education, vocational training, healthcare, culture, sports, environment |
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Note: Incentive periods typically start from the first year of taxable income or profit generation. |
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High-tech manufacturing and industrial zones
The manufacturing sector is a vital component of Vietnam's economic growth story and resilience, significantly contributing to the nation's advancements in high-tech development. The country possesses considerable potential in high-tech manufacturing, which is further supported by government incentives and investments in high-tech parks, such as Saigon Hi-Tech Park, Hoa Lac Hi-Tech Park, and Da Nang Hi-Tech Park. These facilities are equipped with cutting-edge technology and are strategically positioned to improve connectivity and facilitate trade opportunities.
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Industrial zone |
Incentives |
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Saigon Hi-Tech Park |
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Da Nang Hi-Tech Park |
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Hoa Lac Hi-Tech Park |
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From October 2025, Vietnam’s new Corporate Income Tax (CIT) law will introduce a significant change regarding tax incentives for new investment projects in industrial zones. Specifically, new projects established in industrial zones will no longer automatically qualify for location-based tax incentives, such as preferential CIT rates, tax holidays, or tax reductions that were previously available simply due to their location within these zones.
However, this change will not be retroactive. Existing projects in industrial zones that have already been granted location-based incentives will continue to enjoy these benefits until the originally approved expiration date. The new policy is expected to encourage future investors to focus on qualifying for incentives through sectoral or project-based criteria—such as high-tech manufacturing, large-scale projects, or investments in particularly difficult socio-economic areas—rather than relying solely on industrial zone status.
Incentives in economic zones
Vietnam has encouraged the establishment of economic zones throughout the country. These zones are a common entry point for a variety of firms because they provide access to specialized labor, easy access to ports, good business conditions, increased access to infrastructure, pools of talent, and networks of suppliers. Foreign investors should strongly consider setting up their operations within one of Vietnam’s industrial zones.
Importantly, investors in these zones benefit from tax incentives extended by the Vietnamese government. In most cases, qualifying for the tax holiday and preferential tax incentives. In limited cases, where a zone is located in a disadvantaged area, a preferential rate of corporate income tax will also apply.
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Common Economic Zone Investment Incentive Types in Vietnam |
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Economic zones |
Economic zones in Extremely disadvantaged areas |
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* Rate determined on a case-by-case basis ** From the first year of profit generation |
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Explore our 'Where to Invest' spotlight guides regarding Vietnam regions and economic zones.
Incentives in disadvantaged locations
The tax incentives based on location are as follows:
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Disadvantaged Location Investment Incentives in Vietnam |
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Disadvantaged areas |
Extremely disadvantaged areas |
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* From the first year of income generation ** From the first year of profit generation Note: Projects invested into the economic zones may be liable to different treatment. |
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- Firms operating in extremely difficult areas, special economic zones (SEZs) or high-tech zones (HTZs) are taxed at 10 percent for the first 15 years of revenue generation. This period also includes a tax holiday for the first four years followed by a 50 percent reduction for the subsequent nine years;
- Firms operating in difficult areas are taxed at 17 percent for 10 years of revenue generation. This period also includes a tax holiday for the first two years, followed by a 50 percent reduction for the subsequent four years;
- Firms operating in industrial parks are eligible for two years of tax holidays, followed by a 50 percent corporate tax reduction for the subsequent four years.
- Tax incentives are also granted for large manufacturing projects except for those in natural resources.
Besides these, the government also offers customs duty incentive policies and land rental exemption policies that further help to encourage businesses.
Import duties, land rental, and special incentives
Customs duty exemptions
Businesses can also enjoy exemptions from import duty if they meet one of the following criteria:
- Goods are imported to form fixed assets of select projects prescribed under the law;
- Goods are imported for implementing export processing contracts with foreign parties;
- Raw materials and supplies are imported to directly serve the production of software products, and cannot be produced domestically;
- Goods are imported for use in scientific research and technological development, and cannot be produced domestically.
Land rental incentives
Subject to specific conditions, some investment projects can also enjoy land rental fee exemption:
- Exemption for the whole operational period—projects on the list of special investment encouragement sectors investing in areas of particularly difficult socio-economic conditions;
- 15 years of exemption—projects on the list of special investment encouragement sectors investing in areas of difficult socio-economic conditions or projects on the list of investment encouragement sectors investing in areas of extremely difficult socio-economic conditions;
- 11 years of exemption—projects investing in areas of extremely difficult socio-economic conditions; projects in the list of special investment encouragement sectors; projects in the list of investment encouragement sectors investing in difficult socio-economic areas;
- Seven years of exemption—projects investing in areas of difficult socio-economic conditions;
- Three years of exemption—projects on the list of investment encouragement sectors; business and production relocation under urban planning or due to environmental pollution.
Special incentives
More recently, the Prime Minister issued Decision 29/2021/QD-TTg providing the levels, duration, and conditions for the application of special incentives for investment projects, which are granted based on the satisfaction of the law-specified criteria on investment capital, high technology, technological transfer, added value, and value chain participation of Vietnamese enterprises.
The new regulation is expected to encourage foreign investors with large capital amounts and high technologies to make long-term commitments with Vietnam while promoting the process of technology transfer and increasing the spillover effects of FDI.
The new CIT law also introduces stricter eligibility for preferential tax incentives, preventing subsidiaries or affiliates from automatically qualifying based on group status. Each entity must independently meet incentive criteria, such as technological innovation, export contribution, or investment scale.
