Investment incentives in Vietnam can cut a project’s effective tax rate to single digits for a decade – but only for investors who qualify deliberately rather than accidentally. Here is how the incentive system works after the 2025 tax reforms.
The three families of investment incentives
Sector-based
High technology, software, renewable energy, supporting industries and certain agriculture projects earn preferential CIT rates, tax holidays and reductions under the CIT Law 67/2025 framework.
Location-based
Projects in economic zones, high-tech parks and difficult socio-economic areas draw their own investment incentives – often stackable with sector benefits, subject to anti-duplication rules.
Scale-based
Large capital commitments with disbursement schedules unlock negotiated packages, and the special investment incentives regime allows case-by-case terms for strategic projects.
What each incentive is actually worth
The classic package – four years of exemption, nine years at half rate, a 10% preferential rate for fifteen years – can double a project’s after-tax return. Land rent exemptions and import duty relief on fixed assets add more. But the arithmetic changed for the largest groups: the global minimum tax top-up under Decree 236/2025 claws back benefits below 15% for multinationals above the GloBE threshold, shifting negotiations toward qualifying refundable credits and infrastructure support.
Mid-size investors below the threshold keep the full value of their investment incentives – one reason Vietnam remains exceptionally attractive for that segment.
Qualifying without surprises
Incentives attach to the project registered in the investment certificate, not to the company. Change the location, scale or activity and the entitlement changes with it. The discipline is simple: state the incentive basis explicitly in the IRC application, keep separate books for incentivised activity, and document conditions annually – the tax authority audits investment incentives aggressively precisely because they are valuable. Our incorporation and tax advisory teams register the entitlement and defend it as one engagement.
Negotiating beyond the published menu
Published investment incentives are the floor, not the ceiling. Provinces compete for quality projects, and infrastructure support, land clearance assistance, workforce training subsidies and utility guarantees are all negotiable for commitments that matter locally.
The negotiation currency is credibility: a disbursement schedule the investor will actually meet, employment numbers backed by a hiring plan, and technology content the province can verify. Investors who arrive with bankable documents extract meaningfully better packages than those who arrive with brochures.
Two cautions from practice. Put negotiated support in written instruments that survive personnel changes at the province – a friendly meeting is not a legal right. And model the package net of the global minimum tax where it applies; a headline rate that gets clawed back is marketing, not money.
Common ways investors lose their incentives
The revocation cases we see share a handful of patterns. The project relocates or adds an unregistered activity, breaking the link between certificate and operations. Disbursement falls behind the registered schedule without a formal amendment. The incentivised activity is never separated in the accounts, so the auditor cannot verify which profits earned the preferential rate.
Each failure is administrative, not commercial – and each is preventable with an annual incentive health check that takes a day. Companies treat their investment incentives as a fixed asset; the tax authority treats them as a conditional privilege. The second view is the one that matters at audit.
When a condition has genuinely been missed, early voluntary disclosure with a remediation plan preserves far more value than waiting for inspectors. Provinces want projects to succeed; they punish concealment, not honesty.
Investment incentives: frequently asked questions
Do incentives survive if regulations change?
Vietnam’s investment guarantee rules preserve granted incentives against later unfavourable changes – investors may keep the old terms for the remaining period, a protection worth writing into the project file from day one.
Industrial zone or own land?
Zones offer ready infrastructure and often better location incentives; own-site projects trade set-up speed for flexibility. Our guide to FDI in industrial zones compares the paths.
Where are the rules published?
The Law on Investment 2025, its decrees and the incentive lists are consolidated by the Ministry of Finance; provinces publish zone-specific packages separately.
This article is provided for general information only and does not constitute legal advice for any specific case. Regulations may change – please consult a qualified professional before acting. Should further analysis be required, please contact one of our lawyers below.
