Scenario: a US AI startup wants a 200-engineer development centre in Ho Chi Minh City, comparing the Saigon Hi-Tech Park (Thu Duc) with an office tower in District 1. Beyond staffing, how far apart are the two locations’ incentive frames?
The common legal frame for software projects
Under the Law on Investment 143/2025/QH15 (effective 1 March 2026, replacing Law 61/2020/QH14), Articles 15 and 16 define the incentive types: corporate income tax, land-rent and land-use-fee exemptions or reductions, and investment support. The Law on Corporate Income Tax 67/2025/QH15 (effective 1 October 2025) sets the standard 20% rate; two size tiers of 15% (revenue up to VND 3 billion a year) and 17% (over VND 3 billion to VND 50 billion); and a 10%-for-15-years frame — four-year holiday plus 50% reduction for nine further years — for encouraged-sector projects, including software, information technology and AI.
Decree 31/2021/ND-CP places software and IT on the encouraged list — its schedules remain citable until replaced. Decree 103/2024/ND-CP governs land-use-fee and land-rent relief. Since Law 67/2025, offices in industrial parks or ordinary towers no longer automatically qualify for tax incentives; the Saigon Hi-Tech Park applies its own incentive mechanism for high-tech projects.
Saigon Hi-Tech Park or District 1
The Hi-Tech Park option in Thu Duc: an AI/software project — if it meets high-tech criteria — enjoys tax incentives under the park mechanism, plus land-rent relief under Decree 103/2024 and park policy, plus an ecosystem of incubators, shared labs and incubation support. A sector-plus-hi-tech-park “combo” like Hoa Lac’s, tied to the southern ecosystem.
The District 1 option: the company remains in an encouraged sector, so — if conditions are met — software/AI income takes the 10%/15-year, four-year-exempt, nine-year-half-rate frame; the trade-off is high central office cost with no land-rent relief. For an AI startup the math usually turns on total cost: the park wins on site costs and land incentives, District 1 wins on hiring brand and proximity to investors and partners.
Choosing the tier, with a framework illustration
Article 15 of the Law on Investment disallows two same-type tax incentives at the same time; the investor picks the most favourable tier. A Hi-Tech Park project that also meets encouraged-sector conditions compares the park tax frame with the sector tax frame, takes one best frame for software/AI income, then layers the different types.
A framework illustration: a 200-engineer AI centre in the park meeting high-tech criteria holds a basket of the chosen tax frame on AI income, plus in-park land-rent relief. All figures are conditional legal frames, not absolute commitments absent full project details.
Checklist for a software/AI company in Ho Chi Minh City
Identify activities (software, AI, R&D) against encouraged-sector and high-tech criteria; compare the park with District 1 on total after-tax cost; work with the Saigon Hi-Tech Park Authority on eligibility and procedures; lock site costs; record incentives in the Investment Registration Certificate; self-declare at annual finalisation and maintain conditions.
1. Is an AI startup an encouraged sector?
Potentially, if conditions are met. AI, software and IT sit in the encouraged group; AI projects must meet the technology and staffing criteria.
2. How does the Hi-Tech Park differ from a District 1 office on incentives?
The park layers its own mechanism (tax plus land rent plus incubation) onto the sector pillar; a District 1 office keeps only the sector pillar but wins on brand and connectivity.
3. Is AI sold domestically still incentivised?
Yes, if encouraged-sector conditions are met. The consumer market (domestic or export) is not a tax-incentive criterion.
4. Can the park frame stack with the sector frame?
Not for the same tax type at the same time. Under Article 15 of the Law on Investment, each income stream takes one best tax frame.
5. Is AI training or technology-transfer income incentivised?
Only if that activity independently meets incentive conditions. Tax incentives attach to incentivised software, AI and R&D income.
This article has been quality-reviewed by the FLAW AI Legal Council