Contents
- 1. Why compare
- 2. Vietnam: current framework
- 3. China: current framework
- 4. Head-to-head table
- 5. Reading deeper: core differences
- 6. Recommendations for investors
- 7. Frequently asked questions
- 8. Language versions
- 9. References
1. Why compare
Many Chinese technology groups run a "China + 1" strategy — keeping core R&D and manufacturing in China while opening a second base in Vietnam. The finance team's first question is always: where are tax incentives better? This article compares CIT incentive frameworks for high-tech projects in both countries, based on current legal instruments.
2. Vietnam: current framework
Under Decree 320/2025/ND-CP (15/12/2025, guiding the 2025 CIT Law):
- 10% for 15 years on income from new investment projects in hi-tech zones (grouped with hi-tech agricultural zones, concentrated digital-technology zones, and economic zones in preferential areas).
- 4-year exemption and 50% reduction for the next 9 years for highly-preferential income (Article 20).
- The holiday runs from the first year of taxable income; if no taxable income arises in the first 3 years of revenue, it runs from year four.
- Existing hi-tech zones: Hoa Lac (Hanoi), Ho Chi Minh City (SHTP), Da Nang…
Policy logic: incentives attach to the project and location — a new project, in a planned zone, meeting conditions. No separate "hi-tech enterprise" certification is required for this base tier (some supplementary incentives may require certification).
3. China: current framework
- Standard CIT rate: 25%. Enterprises certified as High and New Technology Enterprises (HNTE) enjoy a preferential 15% — a nationwide policy since 2008.
- HNTE conditions (general frame): core technology in state-encouraged fields; R&D spending at set ratios of revenue (by company size); technology income dominating total revenue; graduate-staff ratios. HNTE certification is time-limited and must be renewed.
- Additional zone/project incentives: certain special areas apply 15% to qualifying enterprises in encouraged catalogues; state-encouraged public-infrastructure projects may enjoy "3-year exemption, 3-year half rate".
Policy logic: incentives attach to the enterprise's technological capacity (HNTE certification) more than to location — companies must prove they "deserve it" through substantive R&D.
4. Head-to-head table
| Criterion | Vietnam | China |
|---|---|---|
| Standard CIT rate | 20% (general) | 25% |
| Hi-tech preferential rate | 10% for 15 years | 15% (HNTE) |
| Tax exemption | 4 years | Project-based (e.g. 3 years for public infrastructure) |
| 50% reduction | Next 9 years | Project-based (e.g. next 3 years) |
| Basis of entitlement | New project + location (hi-tech zone) | HNTE certification (R&D capacity) |
| Incentive duration | Fixed term (15 years) | Per HNTE certification validity (renewable) |
| Talent/land incentives | Yes (land-rent exemption, talent perks in digital-tech zones) | Yes, zone-dependent |
5. Reading deeper: core differences
- Headline vs reality: Vietnam's headline rate is lower (10% vs 15%) with a clear holiday schedule — attractive for new projects needing payback time. China offers a stable 15%, but the "ticket" is HNTE certification demanding substantive, sustained R&D.
- Entry barriers: Vietnam — the barrier is location and project nature (must be in a hi-tech zone, new project). China — the barrier is technological capacity (certification, renewal, R&D audits).
- Policy risk: Vietnamese incentives attach to the specific Investment Registration Certificate — project changes can affect them. Chinese incentives attach to HNTE certification — losing certification means losing the incentive immediately.
6. Recommendations for investors
- New technology manufacturing needing fast payback: Vietnam has the edge with 4-year exemption + 9-year half reduction on a 10% base rate.
- Long-term R&D centers: China (regions with R&D ecosystems and talent) with stable 15% HNTE may fit better — if certification conditions can be met.
- "China + 1" strategy: split core R&D (HNTE in China) and expanded manufacturing (hi-tech-zone incentives in Vietnam) — optimizing both frameworks.
- Mandatory: all incentive calculations must rest on the project's specific Investment Registration Certificate / approval instrument, never on headline figures alone.
7. Frequently asked questions
What is the preferential CIT rate for new projects in Vietnam's hi-tech zones? 10% for 15 years; plus 4-year exemption and 50% reduction for the next 9 years (highly-preferential income) under Decree 320/2025/ND-CP.
How are high-tech enterprises taxed in China? HNTE-certified enterprises pay 15% CIT (vs 25% standard), subject to R&D, staffing and technology-field conditions.
Vietnam or China for tax optimization? No universal answer. Vietnam: lower headline rate (10% vs 15%) with a defined holiday. China: stable 15% tied to HNTE certification. Decide on the full picture — supply chain, talent, market — tax is one variable.
Planning a high-tech project in Vietnam? Contact FLAT Law Firm to review incentive eligibility for your specific project.
8. Language versions
9. References
- Decree No. 320/2025/ND-CP (15/12/2025) detailing the 2025 CIT Law (Vietnam).
- China's High and New Technology Enterprise (HNTE) policy — 15% preferential rate.
- Content cross-checked at the time of writing (28/9/2026).
