Investment Incentives for FDI Projects

Which FDI projects enjoy investment incentives?

Under the 2025 Investment Law (No. 143/2025/QH15, effective 01/3/2026, replacing the 2020 Investment Law), investment incentive beneficiaries include: investment projects in incentivized business lines; investment projects in incentivized locations; and investment projects with large capital scale, employing many workers, or key national projects aligned with each period’s socio-economic development orientation as provided by the Government.

• Manufacturing projects in industrial parks, export processing zones, economic zones, high-tech parks, hi-tech agricultural parks, concentrated digital technology parks — the most common incentivized locations for manufacturing FDI projects. See Industrial Real Estate and Industrial Parks and Legal for Industrial Manufacturing Companies.
• Projects in incentivized business lines: high technology, software production, semiconductor chips, supporting industries, renewable energy, key infrastructure, and other business lines on the Government-issued list. See Energy and Renewable Energy.
• Projects in areas with difficult or especially difficult socio-economic conditions — incentive levels are usually higher but infrastructure and logistics need weighing.
• Large-capital projects or projects employing many workers meeting Government criteria.

Important note: location-based investment incentives do not apply to mineral extraction projects; projects producing or trading goods and services subject to special consumption tax (except projects manufacturing automobiles, aircraft, yachts); and commercial housing construction investment projects. The specific scope of incentivized business lines and locations is detailed by the Government and may change over time — investors should cross-check the list in force at the time of project preparation.

Main forms of investment incentives

The 2025 Investment Law provides the following forms of investment incentives (the specific level of each type follows the relevant tax and land laws):

Investment incentives apply for a term and based on the investor’s actual project implementation results — the investor must meet eligibility conditions throughout the incentive period. Where a project qualifies for several different incentive levels, the highest level applies.

Corporate income tax incentives for FDI projects

The 2025 Corporate Income Tax Law (No. 67/2025/QH15, effective 01/10/2025, applicable to tax year 2025) redesigns the tax rate policy toward tiering and project-based incentives:

• Preferential 10% rate for 15 years, plus tax exemption for up to 04 years and 50% reduction for up to 09 subsequent years, for income from new investment projects in incentivized business lines (high technology, software production, semiconductor chips, supporting industries, renewable energy, key infrastructure as decided by the Prime Minister, etc.) or new projects in high-tech parks, hi-tech agricultural parks, concentrated digital technology parks, or economic zones in incentivized locations. Details in Decree 320/2025/NĐ-CP.
• 17% rate for 10 years for certain other groups of new investment projects as provided in Decree 320/2025/NĐ-CP.
• Tiered general rate by revenue: 15% (annual revenue not exceeding VND 03 billion), 17% (over 03 to 50 billion), 20% (all other cases) — general application, not replacing project-based incentives where the project qualifies for a higher incentive.

Practical conditions to note: incentivized income must be separately accounted; the exemption/reduction period counts from the first year the project has taxable income; and incentives are maintained only while the project keeps meeting conditions during the incentive period. As the tax rate and incentive policy was comprehensively renewed at the end of 2025, investors with projects enjoying incentives under the old framework should review the transition mechanism applying to their project. See Tax Advisory for FDI Companies.

Land rental exemption and reduction for incentivized projects

Under Article 39 of Decree 103/2024/NĐ-CP guiding the 2024 Land Law, FDI projects eligible for investment incentives are exempted from land rental as follows:

• Exemption during basic construction (up to 03 years from the land lease decision date, based on the schedule on the Investment Registration Certificate or approval document).
• After basic construction, further exemption: 03 years for projects in incentivized business lines; 07 years for projects in areas with difficult socio-economic conditions; 11 years for projects in especially difficult areas, in especially incentivized business lines, or incentivized projects in difficult areas; 15 years for incentivized projects in especially difficult areas or especially incentivized projects in difficult areas; full lease-term exemption for especially incentivized projects in especially difficult areas.

On procedure: where land rental exemption applies, land users need not carry out an exemption application procedure; however, at least 06 months before the exemption period expires, land users must file land rental payment declarations — late declaration can trigger arrears collection and late-payment interest. This is a point many FDI companies miss when making long-term financial plans for land leases in industrial parks.

Import tax exemption for FDI projects

• Goods creating fixed assets: import tax exemption for machinery and equipment; components, parts, spare parts for synchronous assembly; raw materials and supplies for manufacturing machinery and equipment; specialized transport means in technology lines; construction materials not yet domestically producible — for both new investment projects and expansion projects (clause 11, Article 16 of the 2016 Law on Export and Import Tax).
• Raw materials, supplies, and components for production: import tax exemption for 05 years from the start of official production for domestically unproducible raw materials, supplies, and components imported for production of especially incentivized investment projects (clause 13, Article 16). After the 05-year period, exempted materials not fully used must be fully taxed.

Note: goods already exempted from import tax, if repurposed (e.g., transferring machinery, switching to domestic consumption), require a new customs declaration and the tax policy at the time of change — a common risk when restructuring or liquidating project assets.

Procedures for enjoying investment incentives

1. Self-determining eligibility: under the Investment Law mechanism, investors base on incentivized business lines, locations, and relevant laws to self-determine the investment incentives their project enjoys, then carry out incentive procedures at the tax, finance, or customs authority corresponding to each incentive type.
2. Recording on the Investment Registration Certificate: for FDI projects granted an Investment Registration Certificate, the investment registration authority records the investment incentive content, basis, and applicable conditions on the Certificate — an important basis for working with tax and customs authorities later. See FDI Company Formation in Vietnam and Foreign Investment in Vietnam.
3. Procedures per incentive type: CIT incentives via tax filing and finalization; import tax exemption via notifying the duty-free goods list to customs before clearance; land rental exemption handled during the land lease process and declared before the exemption period expires.
4. Maintaining conditions during the incentive period: monitoring compliance with incentive conditions (business lines, location, schedule, separate accounting) throughout the incentive period to avoid incentive withdrawal and arrears collection.

Risks of losing incentives and facing arrears collection

• Wrongly self-determining eligibility from the start (wrong business line, wrong location) — when tax authorities inspect, incentives are disallowed and tax is collected in arrears with late-payment interest.
• Not meeting conditions during the incentive period (e.g., changing business lines, missing schedule, not separately accounting incentivized income).
• Incentives recorded on the Investment Registration Certificate not matching actual project implementation after IRC adjustments without updates.
• Import-tax-exempted goods repurposed without re-declaring to customs.
• Forgetting to declare land rental payment at least 06 months before the exemption period expires, leading to arrears collection at each year’s land price.
• For large multinational groups: the global minimum tax may reduce the real effectiveness of granted tax incentives (see below).

Note on the global minimum tax

On 29/11/2023 the National Assembly adopted Resolution 107/2023/QH15 on applying supplementary corporate income tax under the global anti-base-erosion rules (global minimum tax), effective 01/01/2024 and applicable from tax year 2024. The minimum rate is 15% for constituent entities of multinational groups with consolidated revenue of EUR 750 million or more in 02 of the 04 preceding years, including a qualified domestic minimum top-up tax (QDMTT) mechanism.

This means: for large groups enjoying CIT incentives bringing their effective rate below 15%, the difference may be collected as top-up tax to reach 15% — the tax incentive under Vietnamese law remains in force, but its real financial benefit narrows. When building financial models and negotiating incentives for large-scale FDI projects, investors need to factor in this impact and consider non-tax support (infrastructure, workforce training, land access) in the overall incentive package. This should be discussed directly with lawyers and tax specialists before finalizing the project structure.

What does FLAT LAW FIRM do?

• Reviewing project incentive eligibility: cross-checking business lines, location, and capital scale against the incentive list in force at project preparation.
• Advising project structuring to optimize the lawful incentive package: site selection (industrial parks, economic zones, difficult areas), investment phasing, new/expansion project structuring.
• Drafting and reviewing IRC issuance and adjustment dossiers, ensuring incentive content, basis, and applicable conditions are fully recorded — see Investment Guide.
• Supporting incentive procedures at tax authorities (filing, finalization), customs (import-tax exemption lists), and finance/land authorities (land rental exemption).
• Compliance review during the incentive period: separate accounting, condition maintenance, incentive updates when the project is adjusted.
• Advising on handling inspections and arrears collection related to incentives: explanations, complaints, administrative litigation when needed.
• Assessing the global minimum tax impact on the project’s financial model and proposing responses — in coordination with tax advisory for FDI companies.
• Supporting Chinese and Taiwanese investors throughout the process — see Chinese Investors.

Legal updates through September 2026

The 2025 Investment Law (No. 143/2025/QH15, adopted 11/12/2025) is effective 01/3/2026, replacing the 2020 Investment Law. The investment incentive framework (Chapter III) is largely inherited with these forms: corporate income tax incentives; import tax exemption; land use fee, land rental, and land use tax exemption/reduction; accelerated depreciation; and other incentive forms as provided by the Government. Decree 96/2026/NĐ-CP guides implementation of the 2025 Investment Law.

The 2025 Corporate Income Tax Law (No. 67/2025/QH15) is effective 01/10/2025, applicable to tax year 2025, with tiered rates by revenue (15%/17%/20%) and a policy of 10% rate for 15 years, up to 04 years’ exemption and up to 09 years’ 50% reduction for new incentivized investment projects. Decree 320/2025/NĐ-CP (dated 15/12/2025) provides detailed guidance.

Resolution 107/2023/QH15 on the global minimum tax is effective 01/01/2024, applicable from tax year 2024 — large multinational groups should reassess the real effectiveness of the tax incentives they enjoy.

Full texts of the above instruments can be found at the Government’s legal normative documents system. Page content should be cross-checked against the instruments in force at the time of the procedure.

Why choose FLAT LAW FIRM?

Investment incentives sit at the intersection of investment, tax, and land law — exactly FLAT LAW FIRM’s multi-disciplinary strength. We don’t just identify incentives on paper but accompany clients through the whole incentive lifecycle: from project structuring, recording incentives on the Investment Registration Certificate, to maintaining conditions and handling inspections and arrears collection. Our team works in Vietnamese, Chinese, and English, suited to foreign investors needing a single legal contact point for their project in Vietnam.

Frequently Asked Questions

Useful links

You should talk to a lawyer if:

• You are setting up a new FDI project and need to determine the optimal incentive package before choosing a location and applying for the Investment Registration Certificate.
• Your project sits in an industrial park but it is unclear whether it qualifies for corporate income tax incentives.
• You need the full incentive content, basis, and conditions properly recorded on the Investment Registration Certificate.
• Your project is enjoying incentives and needs a review after the 2025 Investment Law and the 2025 Corporate Income Tax Law took effect.
• Your group is subject to the global minimum tax and needs to reassess the real effectiveness of its tax incentives.
• You received a tax arrears collection decision related to investment incentives and need to explain or appeal.