Formalizing Artificial Intelligence Governance: Vietnam’s First AI Law

Vietnam’s Artificial Intelligence (AI) Law introduces one of the world’s first comprehensive AI regulatory frameworks, outlining risk-based classifications, compliance requirements, innovation incentives, and strategic opportunities for businesses investing in AI technologies.

Effective March 1, 2026, Vietnam’s newly-approved Law on Artificial Intelligence established a comprehensive legal framework governing the development, deployment, and management of AI.

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The AI Law reflects Vietnam’s strategic intent to assert digital sovereignty, enhance technological competitiveness, and attract high-quality investment into its innovation ecosystem.

Unlike many jurisdictions still in exploratory phases, Vietnam has moved directly toward codifying AI governance principles that balance innovation with risk control. In fact, the government has set the groundwork for upcoming AI regulations in its recently approved Digital Technology Law, which takes a forward-looking, risk-based approach to AI. It seeks to ensure that AI technologies contribute to socio-economic development while safeguarding national security, data integrity, and consumer rights.

This proactive policy direction signals to investors that Vietnam aims to build a predictable regulatory framework that enhances investor confidence.

Scope and guiding principles

The AI Law establishes a broad regulatory scope that extends beyond domestic developers to include any organization, local or foreign, whose AI systems impact users, markets, or national interests in Vietnam. This extraterritorial reach ensures that foreign technology providers cannot bypass obligations by operating from overseas, aligning Vietnam with global regulatory trends seen in the EU AI Act.

As per the new law, AI-related activities must comply with seven foundational principles that define the country’s governance approach, including:

• Human-centric development: AI must serve and support humans rather than replace them in critical decisions. All AI systems should remain under human supervision, with individuals ultimately accountable for their outcomes.
• Safety, fairness, transparency, and accountability: AI systems must be developed and operated in a safe, secure, and reliable manner. They should ensure fairness, prevent discrimination, enable traceability, and clearly define legal responsibilities in cases of harm.
• National autonomy and international integration: Vietnam seeks to strengthen self-reliance in AI technology, infrastructure, and data while promoting international cooperation consistent with global norms and best practices.
• Inclusive and sustainable development: AI development should support Vietnam’s broader socio-economic sustainability goals, ensuring equitable access and benefits for all citizens, protecting the environment, and preserving cultural identity.
• Balanced and harmonized policymaking: AI-related policies must maintain balance among innovation, regulation, and social interests, ensuring harmony in both design and implementation.
• Risk-based management: Government oversight will be proportionate to the level of risk posed by AI systems, with mandatory regulations applied only to those that demonstrate clear potential for harm.
• Promotion of innovation: The State will create a supportive and secure legal and policy environment to encourage research, startups, and the commercialization of AI-related products and services.

These principles set the regulatory tone, emphasizing responsible deployment without stifling technological advancement.

Implementation plan

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Effective March 1, 2026, the law introduces a centralized governance structure led by the Ministry of Science and Technology.

For an AI system operating in Vietnam before the law’s effective date, providers and operators will have 12 months from that date to align their compliance with the new law’s provisions. During this period, the AI system will be allowed to operate as normal, provided the competent authority finds no substantial risks.

In cases of conflict between this Law and other laws or resolutions of the National Assembly on the same issue, the provisions of this law shall take precedence. However, if other legal documents offer more favorable incentives or policies, eligible entities may choose to apply the most advantageous incentives available.

Risk-based classification and compliance obligations

The AI Law adopts a four-tier risk classification system that determines the level of regulatory control imposed on AI systems. This structure aligns Vietnam with leading global regulatory models, including the EU AI Act, but introduces features tailored to national security and socio-cultural considerations.

Four-Tier Risk System

The law defines four risk levels for evaluating AI systems, including:

• Unacceptable risk: AI systems considered a threat to national security, human dignity, or social order are strictly prohibited. These include technologies that manipulate cognitive behavior, deploy large-scale facial recognition without user consent, or produce deepfakes that may destabilize public opinion.
• High risk: AI deployed in sectors such as finance, healthcare, education, infrastructure, and justice is subject to pre-market approval. These systems must undergo mandatory government assessment and registration before deployment.
• Medium risk: Systems that interact directly with users or generate content must ensure transparency and user awareness. Providers must clearly label AI-generated outputs and implement mechanisms for user feedback and oversight.
• Low risk: AI systems with minimal societal or economic impact are allowed self-regulation, subject to general principles and post-market monitoring.

Businesses developing or deploying AI in Vietnam must conduct risk assessments and maintain detailed technical documentation. High-risk AI systems must undergo conformity assessments, register in the National AI Database, and implement mechanisms for human oversight and incident reporting. Foreign providers must appoint a local legal representative to coordinate compliance and act as the contact point for Vietnamese authorities.

Application restrictions

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The law explicitly bans AI applications that pose systemic threats. These include real-time biometric surveillance in public spaces (without special approval), large-scale facial recognition databases built through unauthorized data scraping, and AI systems designed to manipulate public opinion or behavior in deceptive ways.

Vietnam’s approach mirrors the EU AI Act in its use of a risk-based classification model. However, Vietnam places stronger emphasis on national sovereignty, data autonomy and infrastructure, and cultural stability. While the EU prioritizes harmonization across member states, Vietnam’s framework is designed to accelerate domestic AI adoption while retaining government oversight of strategic technologies.

This risk-based system provides regulatory clarity and signals Vietnam’s commitment to responsible AI deployment, providing defined pathways for compliance and market entry.

National AI infrastructure and data governance

National AI Database and system registration

The AI Law lays the groundwork for a national AI ecosystem intended to promote innovation while ensuring transparency and effective state oversight. A central component of this framework is the National AI Database, which will operate as a centralized registration and monitoring platform for AI systems deployed in Vietnam.

Compliance obligations for high-risk AI systems

Providers of high-risk AI systems must establish comprehensive risk management mechanisms, governance frameworks for training data, and systems for maintaining technical documentation and operational logs.

Providers are also required to ensure meaningful human oversight throughout system operation and to comply with transparency and incident-handling obligations.

Transparency and labeling of AI-generated content

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Article 11 of the AI Law introduces explicit transparency requirements for the development and use of AI systems. Providers must ensure that users are informed when they are interacting with an AI system, unless otherwise prescribed by law.

Machine-readable identification markers must accompany audio, images, and video generated by AI to distinguish such content from authentic material. This requirement is intended to mitigate the risks associated with deepfake technologies.

Where AI-generated content made available to the public may cause confusion regarding its authenticity, deployers are required to provide clear notifications and distinct labeling, particularly for content that simulates real persons or real-world events. For artistic or cinematic works, labeling requirements may be applied with greater flexibility, provided the content remains clearly distinguishable from authentic material.

AI incident reporting and response mechanisms

According to Article 12 of the AI Law, everyone involved in AI systems, such as developers, providers, deployers, and users, bears joint responsibility for maintaining the system’s safety, security, and reliability. They must also quickly detect and respond to any incidents that could harm people, property, data, or social stability.

In the event of a serious incident, developers and providers must promptly implement technical remedial measures, suspend or withdraw the affected system where necessary, and notify the competent authorities. Deployers and users are required to record and report incidents promptly and to cooperate with remediation efforts.

All AI incident reporting and response activities will be conducted through the national one-stop electronic portal for AI. The government will issue detailed regulations on reporting procedures and assign responsibilities to relevant agencies, organizations, and individuals based on the severity and scope of each incident.

Preferential mechanisms for AI businesses

Recognition of AI assets as capital contributions

To mobilize resources, the government encourages public–private partnerships and introduces a pioneering provision recognizing AI models, algorithms, and data assets as lawful capital contributions. This marks a significant shift in regulatory thinking, opening new financing channels and supporting Vietnam’s efforts to formalize the digital economy.

Incentives under science, technology, and investment laws

Article 20 of the AI Law provides that AI enterprises are entitled to the highest level of incentives available under the laws on science and technology, high technology, digital transformation, and investment. The Law also facilitates access to computing infrastructure, data resources, and sandbox or testing environments.

National AI Development Fund support

To complement statutory incentives, the National AI Development Fund will offer grants, loans, and preferential financing to domestic startups, SMEs, and foreign investors developing AI capabilities in Vietnam.

Regulatory sandbox and market entry facilitation

Regulatory sandbox mechanisms allow enterprises to test AI applications under relaxed regulatory conditions, lowering market entry barriers while supporting responsible innovation. These measures reinforce Vietnam’s ambition to position itself as a regional AI hub with clear incentives for industry participation.

Business implications and sectoral impact

The AI Law carries significant implications for both domestic enterprises and foreign investors. Companies developing or deploying high-risk AI systems must establish a robust compliance framework that includes data security protocols, impact assessments, and human oversight mechanisms. Foreign providers must appoint a legal representative in Vietnam, creating a clear point of accountability for regulatory authorities. Penalties may be set as a percentage of global revenue, reinforcing strong cross-border deterrence.

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At the same time, the law creates strategic opportunities across key sectors. In healthcare, AI applications in diagnostics and patient management stand to benefit from priority access to national infrastructure and funding.

In finance and fintech, AI can accelerate credit scoring, fraud detection, and digital payments under a regulated framework that increases consumer trust.

In manufacturing and logistics, AI-driven automation aligns with Vietnam’s industrial upgrading agenda, supporting supply chain efficiency and export competitiveness. Meanwhile, public services, including e-government platforms and smart city initiatives, will gain support through public–private partnerships and AI clusters.

Localization and R&D integration now determine market entry advantages, particularly in sectors such as healthcare and manufacturing. Companies that align early with sandbox and cluster initiatives can convert compliance investment into a first-mover advantage. This shift enables businesses to use compliance as a strategic lever for market expansion.

Strategic outlook and recommendations for investors

The AI Law marks a structural shift in Vietnam’s digital policy, moving AI from an unregulated frontier into a state-guided strategic industry. The AI Law demonstrates a forward-looking approach that balances national security, ethical standards, and economic competitiveness. Rather than limiting AI-driven industries, the law aims to create a controlled environment that encourages responsible innovation, investment confidence, and sustainable technological growth.

Investors should prioritize three key actions:

• Integrating compliance into product development;
• Participating in sandbox programs to gain regulatory; and
• Establishing local partnerships or R&D operations to qualify for incentives.

By aligning AI strategies with Vietnam’s national priorities, businesses can turn regulatory compliance into a competitive advantage.

The AI Law signals a new phase in Vietnam’s digital economy, where regulated innovation becomes a strategic driver for competitiveness and long-term market leadership. Companies that act early and strategically will be well placed to lead in Vietnam’s emerging AI-driven economy.

This article was first published October 29, 2025, and was last updated December 24, 2025.

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