"My company is 100% foreign-owned — can it enjoy CIT incentives like a Vietnamese enterprise?" This is one of the first questions about CIT incentives FDI enterprises Vietnam that almost every foreign investor asks when setting up a project in Vietnam. The short answer is yes, but the conditions, the level of benefit and how to keep CIT incentives for FDI enterprises depend on several layers of rules: the Corporate Income Tax Law 67/2025/QH15 (effective 01/10/2025), its guiding Decree 320/2025/ND-CP, the Investment Law 143/2025/QH15 and the global minimum tax rules. This article answers the 10 most common questions from a practical legal perspective, for foreign investors, executives and finance teams of foreign-invested enterprises. It covers the full picture of CIT incentives for FDI enterprises in Vietnam — from eligibility and rates to self-assessment procedures, maintaining incentives throughout the incentive period and global minimum tax impact — as part of FLAT's corporate income tax for FDI companies in Vietnam pillar.
Table of contents
- Are FDI enterprises eligible for CIT incentives?
- Which FDI projects qualify for CIT incentives?
- What do CIT incentives for FDI enterprises include?
- Must FDI enterprises file an application to obtain CIT incentives?
- If an FDI company enjoying incentives is merged or sold, do the incentives survive?
- How are FDI projects enjoying incentives under the old CIT law treated when Law 67/2025 takes effect?
- Can the global minimum tax wipe out CIT incentives for FDI subsidiaries of multinationals?
- How is tax computed if an FDI enterprise cannot separately account incentivized income?
- Which income of FDI enterprises is excluded from preferential CIT rates?
- What should be done to secure and keep CIT incentives for an FDI project?
1. Are FDI enterprises eligible for CIT incentives?
Short answer: Yes. Vietnam's corporate income tax law does not distinguish between domestic and foreign-invested enterprises — the deciding criteria are the sector, location and conditions of the investment project, not the investor's nationality.
Explanation: This is widely misunderstood by foreign investors, who often assume incentives are a "privilege" for local firms — or, conversely, that FDI status automatically brings incentives. Both views are wrong. Vietnam's CIT incentive system is ownership-neutral: a 100% foreign-owned company investing in semiconductor manufacturing in a high-tech park enjoys the same incentives as a Vietnamese company running the same project — while an FDI company doing pure trading or distribution in a major city gets no incentive at all, however large its capital. The right question is not "does FDI get incentives" but "does this investment project fall into an incentivized sector and location and meet the conditions".
Legal basis: Law 67/2025/QH15 and Decree 320/2025/ND-CP attach incentives to the investment project (sector, location), regardless of ownership. Article 14 of Investment Law 143/2025/QH15 likewise defines incentive beneficiaries as projects in incentivized sectors, in incentivized locations, or large-scale, labour-intensive projects — applying equally to domestic and foreign investors.
Next step: Pin down the project's exact sector and location against Article 12 of Law 67/2025/QH15 and Article 18 of Decree 320/2025/ND-CP (see question 2). For the full framework of conditions, procedures and maintenance, see the in-depth analysis of conditions, application procedures and maintenance of CIT incentives under Law 67/2025 (Vietnamese).
2. Which FDI projects qualify for CIT incentives?
Short answer: Projects in incentivized sectors or in incentivized locations as listed by law. The two criteria can combine: a project that is both in an incentivized sector and an incentivized location usually gets the highest tier.
Explanation: On sectors, the list concentrates on state-encouraged fields: high technology and high-tech application; digital technology (software production, network information security, key digital products and services, electronics); semiconductor R&D, design, manufacturing, packaging and testing; AI data centres; renewable and clean energy, waste-to-energy; environmental protection; new materials; supporting industries; high-tech agriculture; social housing; education and healthcare — precisely where FDI flows into Vietnam are concentrated. On locations: areas with difficult or specially difficult socio-economic conditions, economic zones, industrial parks and clusters, export processing zones, high-tech parks, high-tech agricultural parks and concentrated digital technology zones. In practice, most manufacturing FDI projects located in industrial parks already meet the location criterion; if they are also in an incentivized sector, the tier is raised.
Legal basis: Article 12 of Law 67/2025/QH15 (incentivized sectors and locations); Article 18 of Decree 320/2025/ND-CP (detailed groups); Article 15 of Investment Law 143/2025/QH15.
Next step: Match the project's actual business lines and site against the full lists — do not guess from the project name, as some sectors carry technical conditions. The in-depth analysis of conditions, procedures and maintenance of CIT incentives under Law 67/2025 (Vietnamese) walks through each group.
3. What do CIT incentives for FDI enterprises include?
Short answer: Three main groups: a 10% preferential rate for 15 years; 10% for the whole operating life for certain special groups; 17% for 10 years for supporting-industry products — plus a tax holiday of up to 4 years and 50% reduction for up to 9 following years (or a 2-year holiday plus 50% reduction for up to 4 years for the 17% group).
Explanation: Two components must be distinguished: the rate incentive (a rate below the standard 20%) and the holiday/reduction (no tax or half tax for some early profitable years). The 10%-for-15-years rate applies to income from new investment projects in core incentivized sectors, projects in specially difficult areas, high-tech parks, high-tech agricultural parks, concentrated digital technology zones and projects in economic zones located in incentivized areas. The 10%-for-life rate applies to special activities such as publishing and certain sectors in difficult areas. The 17%-for-10-years rate is for supporting-industry products — highly relevant to FDI suppliers in the supply chain. On holidays: the 10%-for-15-years group gets up to 4 years' exemption and 50% reduction for up to 9 following years; the 17% group gets 2 years' exemption and 50% reduction for up to 4 years. The holiday counts from the first year with taxable income; if no taxable income arises within 3 years of revenue, it counts from year four. For exceptional projects, incentive periods may be extended up to 1.5 times with the Prime Minister's approval.
Legal basis: Article 13 of Law 67/2025/QH15 (preferential rates); Article 14 (exemptions and reductions); Article 19 of Decree 320/2025/ND-CP.
Next step: Identify which rate group your project falls into before financial modelling — the gap between 10% for 15 years and 17% for 10 years is material to cash flows. See the analysis of how the 15%/17%/20% CIT rates apply under Law 67/2025 for the full rate framework.
4. Must FDI enterprises file an application to obtain CIT incentives?
Short answer: There is no separate "application for an incentive certificate". Enterprises self-assess eligibility and self-declare under the self-assessment regime, but must keep complete supporting dossiers ready for tax inspection.
Explanation: This differs importantly from investment incentives with administrative licensing (such as the Investment Registration Certificate). For CIT, no authority "grants" the incentive; the enterprise assesses for itself whether its project is in an incentivized sector and location and meets the conditions, then declares the preferential rate, holiday and reduction in its tax returns. The law tasks the Government with detailed rules and the Ministry of Finance with procedures and dossiers. This places the burden of proof on the enterprise: if a tax audit finds the conditions unmet (e.g. the actual sector is not on the list, incentivized income cannot be separately accounted), the enterprise faces recovery of exempted/reduced tax plus late-payment interest and administrative penalties. "Self-assessment" does not mean "free choice" — it means self-responsibility for correctness.
Legal basis: Article 15 of Law 67/2025/QH15; Circular 20/2026/TT-BTC.
Next step: Build from day one a dossier proving incentive conditions: investment approval/IRC recording the sector and location; documents showing the project is on the incentive lists; an accounting system separating incentivized income. The checklist for maintaining CIT incentive conditions for FDI projects lists the recurring tasks to avoid recovery.
5. If an FDI company enjoying incentives is merged or sold, do the incentives survive?
Short answer: Not automatically. CIT incentives for new investment projects do not apply to mergers, consolidations, divisions, spin-offs, changes of ownership or conversions of enterprise type — the transferee must reassess incentive eligibility from scratch.
Explanation: This is the most common trap in FDI-related M&A in Vietnam. Buyers often see the target "enjoying a 10% rate with 8 holiday years left" and price it in, but overlook the exclusion in Article 18 of Law 67/2025/QH15: incentives attach to the "new investment project" status of the very entity running the project, and the law expressly excludes mergers, consolidations, divisions, spin-offs, ownership changes and type conversions from this incentive category. In practice, after closing, the merged or re-owned company may no longer apply the preferential rate and remaining holiday — meaning post-tax cash flows come in well below the valuation model. By the same logic, income from the capital or project transfer itself is not entitled to preferential rates. This belongs in tax due diligence before signing, not after closing.
Legal basis: Article 18 of Law 67/2025/QH15 (incentive conditions; exclusions for new-project incentives in M&A scenarios; exclusions of preferential rates for capital/project transfer income).
Next step: Put incentive-eligibility review into the pre-deal legal-tax checklist and remodel post-tax cash flows under an incentive-loss scenario for price negotiation. If your deal is at structuring stage, contact FLAT Law Firm at hotline 0988424851 for a pre-closing tax impact assessment.
6. How are FDI projects enjoying incentives under the old CIT law treated when Law 67/2025 takes effect?
Short answer: Enterprises may choose: continue under the law in force at licensing, or switch to Law 67/2025/QH15 for the remaining incentive period — whichever is more favorable. Projects not previously incentivized but covered by the new law may apply from tax year 2025 for the remaining period.
Explanation: Law 67/2025 took effect 01/10/2025, applies from tax year 2025, and repeals Law 14/2008/QH12 and its amendments. For thousands of FDI projects mid-way through incentives under the old law, Article 20 sets a flexible transition instead of a reset: the enterprise may choose the more favorable framework for the remaining incentive time. Example: a project enjoying 10% for 15 years under the old law with 6 years left — if the new framework offers an equal or better deal, it may switch; if not, it stays on the old framework to the end. A second point favoring investors: projects not previously incentivized but now on the new lists (the new law adds sectors such as semiconductors, AI and digital technology) may start enjoying incentives from tax year 2025 for the remaining period — an opportunity many tech FDI enterprises are missing. Practical advice: build a comparison table of the two options per project, state the choice clearly in filings and keep the full basis for explanation to tax authorities.
Legal basis: Articles 19–20 of Law 67/2025/QH15 (effectiveness, repeals and transitional rules).
Next step: Review the whole portfolio of projects enjoying incentives under the old law against the new lists in Article 12 of Law 67/2025/QH15 and Article 18 of Decree 320/2025/ND-CP. The article on the 10 key changes of CIT Law 67/2025 FDI enterprises must know gives a quick read of the changes directly affecting this choice.
7. Can the global minimum tax wipe out CIT incentives for FDI subsidiaries of multinationals?
Short answer: It can materially affect them. From fiscal year 2024, Vietnam applies top-up corporate income tax under the global anti-base-erosion rules: if an FDI company in Vietnam bears an effective rate below 15% while its group is in scope, the gap may be collected to reach 15% — eroding the real economics of a 10% incentive rate.
Explanation: Resolution 107/2023/QH15 (effective 01/01/2024, applying from fiscal year 2024) brings Vietnam into the global minimum tax framework with two mechanisms: the Qualified Domestic Minimum Top-up Tax (QDMTT) — collected in Vietnam from entities with an effective rate below 15%; and the Income Inclusion Rule (IIR). It covers constituent entities of MNE groups whose ultimate parent has consolidated revenue of EUR 750 million or more in at least 2 of the 4 preceding years. Consequence: an FDI company enjoying a 10% preferential rate in Vietnam, if in an in-scope group, may owe top-up tax bringing its total burden to 15% — the 10% on paper no longer holds in full economically. Vietnam is therefore building parallel compensation: the Investment Support Fund under Decree 182/2024/ND-CP provides cash support (up to 50% of initial investment costs for R&D centre projects in semiconductors and AI; annual support for training, R&D, fixed assets, high-tech production), and such support is not counted as taxable CIT income. Separately, Article 17 of Investment Law 143/2025/QH15 provides special investment incentives and support for projects with major socio-economic impact. Caution: actual QDMTT impact per group depends on the GloBE effective-rate computation and transitional safe harbours, so no hard conclusion fits all cases — model it specifically.
Legal basis: Resolution 107/2023/QH15; Decree 236/2025/ND-CP (effective 15/10/2025); Decree 182/2024/ND-CP (Investment Support Fund, effective 31/12/2024); Articles 16–17 of Investment Law 143/2025/QH15.
Next step: First determine whether your group is in scope of Resolution 107/2023/QH15 (the EUR 750 million consolidated revenue threshold). If so, model the total post-QDMTT tax burden rather than looking at the incentive rate alone, and assess access to the Investment Support Fund and special incentive mechanisms. This needs coordinated tax and investment advice — contact FLAT Law Firm at hotline 0988424851 for a full assessment.
8. How is tax computed if an FDI enterprise cannot separately account incentivized income?
Short answer: The law requires separate accounting of incentivized income; where impossible, allocation by revenue or cost ratio is allowed. Enterprises must also fully observe accounting, invoicing and documentation regimes and pay tax by declaration to apply incentives.
Explanation: In practice, many FDI companies run multiple activities in one legal entity: e.g. manufacturing electronic components (incentivized, 10%) alongside trading and services (not incentivized, 20%). Without separating which income is incentivized, tax authorities have no basis to accept the low rate — and the risk is the whole income being taxed at the standard 20%. Article 18 of Law 67/2025/QH15 therefore makes separate accounting a condition for incentives, allowing revenue/cost-ratio allocation only where separate accounting is impossible. Important: ratio allocation is a fallback, not the optimal choice — the ratio may be revisited on audit. Best practice is to design a segregating accounting system from the first income year, with a documented, consistent method for allocating shared costs across years.
Legal basis: Article 18 of Law 67/2025/QH15 (incentive conditions: accounting, invoicing, documentation; declaration method; separate accounting of incentivized income, ratio allocation as fallback).
Next step: Work with accounting to set up separate tracking accounts for incentivized activities from the start of the fiscal year, with documented shared-cost allocation. The checklist for maintaining CIT incentive conditions for FDI projects has a dedicated section on accounting and periodic filing.
9. Which income of FDI enterprises is excluded from preferential CIT rates?
Short answer: Income from capital transfers, real estate transfers (except social housing), investment project transfers (except mineral processing) and offshore business income. Notably, the 15%/17% revenue-based rates do not apply to a subsidiary or related company if the related enterprise fails the conditions.
Explanation: Many FDI enterprises err by applying one preferential rate to the whole entity's income. The law carves out income streams not tied to the encouraged investment activity: gains from selling shares, projects or real estate — even where the enterprise enjoys 10% on its core manufacturing — are taxed at standard rates. The second carve-out is especially relevant to FDI: the 15%/17% rates for small and micro enterprises by revenue (Article 10 of Law 67/2025/QH15) do not apply to a subsidiary or related company where the related enterprise fails the conditions. In practice, a Vietnamese subsidiary of a foreign group — even with revenue under VND 50 billion — usually cannot take the 15%/17% rates, since it cannot be treated as an independent small enterprise. This is the core distinction between "size-based incentives" (15%/17%) and "project-based incentives" (10%, holidays) that FDI enterprises must keep clear.
Legal basis: Article 18 of Law 67/2025/QH15 (exclusions from incentives and preferential rates; exclusion of subsidiaries/affiliates from the 15%/17% rates).
Next step: Before each finalization, classify each income stream of the entity as "incentivized / not incentivized" and apply the correct rate per stream instead of one blanket rate. The analysis of how the 15%/17%/20% CIT rates apply under Law 67/2025 details each rate.
10. What should be done to secure and keep CIT incentives for an FDI project?
Short answer: Six core tasks: identify the correct sector and location at project setup; record incentive conditions in the project dossier; separately account incentivized income from year one; maintain conditions throughout the incentive period; track transitional rules when laws change; and for MNEs, additionally model global minimum tax impact and the Investment Support Fund option.
Explanation: CIT incentives for FDI enterprises are not a one-off grant but a compliance process running the whole incentive period — up to 15 years. The consistent principle in investment law: the enterprise must meet incentive conditions throughout the incentive period, and where multiple tiers apply, the highest applies. In practice, incentive recoveries usually come from: wrong initial sector/location identification; failure to separately account incentivized income; real operations drifting from registered content without reassessment (e.g. expanding into non-incentivized lines, relocating); or mergers/transfers losing new-project status without recalculation. With the new laws (Law 67/2025/QH15, Investment Law 143/2025/QH15) and the global minimum tax, FDI enterprises need an overall compliance picture rather than piecemeal fixes.
Legal basis: Articles 18 and 20 of Law 67/2025/QH15; the principle of maintaining incentive conditions throughout the incentive period under investment law; Decree 320/2025/ND-CP; Resolution 107/2023/QH15.
Next step: Start by re-checking all incentive conditions per project under the current framework, then run a periodic checklist. The in-depth analysis of conditions, procedures and maintenance of CIT incentives under Law 67/2025 and the checklist for maintaining CIT incentive conditions for FDI projects are the two companion practice documents to this FAQ.
Your question is not here?
Each FDI project has its own sector, location and ownership structure — and the right answer on CIT incentives always lies in the specifics of each case. If you are preparing a new project, are in transition from the old law to Law 67/2025/QH15, or need to assess global minimum tax impact on your current structure, FLAT Law Firm's lawyers are ready to review your dossier and work out the optimal approach for each scenario.
Contact us: hotline 0988424851 — FLAT Law Firm, Your Trusted Legal Partner in Vietnam and Beyond. See our tax advisory services for FDI enterprises.
For deeper reading, see the in-depth analysis of conditions, procedures and maintenance of CIT incentives under Law 67/2025 and the checklist for maintaining CIT incentive conditions for FDI projects (Vietnamese).