A Brief Guide on Investment Incentives in the new Vietnamese Investment Law of 2025

Vietnam continues to solidify a position as a premier destination for foreign direct investment. To sustain this economic growth, the government of Vietnam provides substantial financial incentives to attract capital into targeted industries and regions. For any enterprise aiming to maximize profitability, understanding the legal framework surrounding preferred sectors and preferred regions is essential. This guide from Apolo Lawyers breaks down the core provisions of the Investment Law, helping businesses identify eligible projects and secure critical tax advantages. Feel free to contact our hotline at +84 979.489.879 for the best consultation and support from Apolo Lawyers.

1. Summary of Investment Incentives in Vietnam

The recently enforced Investment Law of 2025 provides a legal framework to attract capital into specific economic sectors and geographical regions. By understanding the regulations, foreign and domestic enterprises can optimize financial strategies by investing in specific sectors of business or locations in Vietnam. The law classifies investment incentive schemes into two primary categories: preferred sectors and preferred regions. This structured system aims to create sustainable development, job creation, and technological advancement by encouraging businesses to invest across all provinces of Vietnam. 

A Brief Guide on Investment Incentives in the new Vietnamese Investment Law of 2025

2. Preferred Sectors (Sectors receiving Invesment Incentives)

The Vietnamese government wants to direct capital toward industries that create high economic value, foster innovation, or protect the environment. In accordance with Article 15.1 of the Investment Law, eligible sectors for investment incentives include the following:

• Science, technology, innovation, digital transformation, digital technology industry and semiconductor industry;
• Green economy, circular economy, sharing economy, digital economy, developing new economic models;
• Industry linkage clusters, value chains, attracting modern management investment, having high added value, having spillover impact, connecting global production and supply chains;
• Renewable energy, new energy, clean energy; national energy security;
• Developing agriculture and forestry; protecting environment, natural resources, marine economy;
• Building and developing infrastructure;
• Education, training, healthcare, physical training, high-performance sports and national culture;
• Key chemical industry, key mechanical industry and supporting industry; developing pharmaceutical industry;
• Other objectives as promoted and regulated by the Vietnamese government.

Companies investing in the mentioned sectors receive corporate income tax reductions, land rental exemptions, favorable credit policies and other forms of incentives. Identifying the correct industry ensures that businesses can successfully claim the associated financial benefits.

3. Preferred Regions (Regions receiving Invesment Incentives)

To balance economic growth and reduce regional disparities, the government of Vietnam encourages business expansion into underdeveloped regions. The Investment Law of 2025 categorizes eligible locations into specific groups:

• Areas with difficult or extremely difficult socio-economic conditions (e.g., rural or mountainous regions , regions with insufficient infrastructure, remote border regions, ...).

• Specific Zones dedicated to economic development: Industrial parks, export processing zones, high-tech zones, and other designated economic zones.

Investment projects located in the designated areas will benefit from lower corporate income tax rates over extended periods and reduced import duties for fixed assets.

The above incentives are not mutually exclusive. Therefore, combining a preferred sector with a preferred geographical area will maximize the total tax incentives and financial support for businesses.

A Brief Guide on Investment Incentives in the new Vietnamese Investment Law of 2025

4. The Role of Local Legal Experts

Understanding regulations on investment incentives will allow enterprises to decrease their cost-to-revenue ratio while also creating jobs in important sections and developing rural regions. If you still have difficulties or further questions on Vietnamese investment law, as well as any other legal issues, please contact Apolo Lawyers via Email contact@apolo.com.vn or hotline +84 979.489.879 for the best advice and support.

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