Investment Incentives Site-Selection Checklist for FDI Projects in Vietnam

Choosing an FDI project site is not only about logistics or land rental prices. For many projects, a proper assessment of investment incentives at the site-selection stage can determine tens of billions of dong in tax and land costs over the next 10–15 years — or, conversely, a hasty choice can permanently disqualify a project from incentive eligibility. This checklist helps foreign investors review the 10 key points before locking in a location.

Table of contents

• 1. Who should use this checklist and how
• 2. Detailed checklist
• 3. Common mistakes when doing this yourself
• 4. After completing the checklist
• 5. Frequently asked questions
• Language versions
• References

1. Who should use this checklist and how

This checklist is for foreign investors and project teams selecting a project location in Vietnam — before filing for investment policy approval or an Investment Registration Certificate (IRC).

Marking: ☐ not done · ☑ done · ⚠ needs lawyer review. Golden rule: assess incentives before signing any location commitment (land-lease MOU, deposits, in-principle agreements with industrial park management). Incentives attach to location and sector — changing location after filing means redoing nearly the entire procedure.

2. Detailed checklist

Item 1: Is the project in an incentivized sector? ☐

• Action: Match the project's planned business lines against the incentivized sectors list in Article 15 of the 2025 Investment Law and the detailed annexes of Decree 96/2026/ND-CP (supporting industries, high-tech, renewable energy, agro-forestry-fishery processing, healthcare, education, environmental protection, etc.).
• Why it matters: This is the broadest and most stable incentive "gate". A project in an incentivized sector enjoys incentives regardless of location — while location-based incentives can change when an area is reclassified. For the full landscape of incentive categories, see: Investment Incentives for FDI Projects in Vietnam.
• How to do it: Take the planned VSIC codes and match them directly against the annexes of Decree 96/2026; for "grey zone" activities (e.g., logistics serving a manufacturing project, data centers), seek the investment registration authority's written view before committing.
• Watch out: Registering an over-broad business scope ("manufacturing and trading all kinds of goods") invites later disputes with the tax authority over which income qualifies. Register incentivized lines specifically and measurably.

Item 2: Is the location in an incentivized area? ☐

• Action: Check whether the planned site is an incentivized location under Article 15 of the 2025 Investment Law: socio-economically disadvantaged or extremely disadvantaged areas, industrial parks, economic zones, high-tech parks.
• Why it matters: Location is a criterion independent of sector — an ordinary manufacturing project in an extremely disadvantaged area may still enjoy tax incentives. This is the variable site selection affects most directly.
• How to do it: Check the incentivized-location lists in the annexes of Decree 96/2026/ND-CP and the Prime Minister's area-classification decisions as amended; confirm in writing with the provincial Department of Finance / economic zone management board.
• Watch out: ⚠ Area lists are reviewed and adjusted periodically — today's "disadvantaged" area may drop off the list in five years. Long-term land leases should include review clauses for policy changes.

Item 3: Does the project qualify as large-scale? ☐

• Action: For large-capital projects, check whether the project meets the "large-scale project" threshold in Article 14(1)(c) of the 2025 Investment Law and the committed disbursement conditions.
• Why it matters: Large-scale projects enjoy incentives even outside incentivized sectors or locations — a third "gate", especially relevant for infrastructure, energy, and large industrial-urban projects.
• How to do it: Check the capital threshold and minimum disbursement schedule in Article 19 of Decree 96/2026/ND-CP; disbursement commitments must be feasible and truthfully reflected in the dossier — slower-than-committed disbursement is a classic trigger for incentive withdrawal (see case study T-057).
• Watch out: ⚠ Verify the capital threshold and disbursement schedule against the latest original text and confirm with the investment registration authority before committing.

Item 4: Identify the applicable preferential CIT rate ☐

• Action: Under the 2025 CIT Law (67/2025/QH15), identify the project's group: 10% for 15 years (high-tech, semiconductors, AI, major infrastructure, extremely disadvantaged areas, etc.), 10% indefinite (socialized sectors, press, publishing, etc.), 17% for 10 years (disadvantaged areas, priority industries, etc.), with tax holidays of 4 years exemption + up to 9 years 50% reduction, or 2 years exemption + up to 4 years 50% reduction, counted from the first year of taxable income.
• Why it matters: This is the largest "cash" component — the gap between the 20% standard rate and a 10% preferential rate over 15 years can reach tens of billions of dong for a mid-size manufacturing project.
• How to do it: Check the full text of Articles 13–15 of Law 67/2025/QH15 and Decree 320/2025/ND-CP; note the exclusions (real estate except social housing, capital/project transfers, minerals, oil and gas, goods subject to special consumption tax, etc.).
• Watch out: ⚠ Do not use summary figures in this article for investment decisions — always verify against the original text and confirm with the tax authority.

Item 5: Model the impact of tiered CIT rates by revenue ☐

• Action: Under Article 10 of Law 67/2025/QH15, enterprises with prior-year revenue below VND 3 billion apply 15%, VND 3–50 billion apply 17%, above that the 20% standard rate. Build this into the project financial model.
• Why it matters: For SME projects or early operating years (low revenue), tiered rates may beat project incentives — but they are determined by the immediately preceding year's revenue, not projected revenue, so planning must start in year one.
• How to do it: Model three revenue scenarios for the first five years; note that misapplying the rate on provisional payments triggers top-up payments plus late-payment interest at finalization.
• Watch out: Tiered rates and project investment incentives are separate mechanisms — they do not stack; the model must pick the better one for each phase.

Item 6: Review import duty exemptions ☐

• Action: Check whether the project's import list (machinery and equipment forming fixed assets; imported raw materials, supplies, and components for production) qualifies for import duty exemption under Article 14(2)(b) of the 2025 Investment Law and import/export duty legislation.
• Why it matters: For a manufacturing project importing tens of millions of USD in production lines, duty-free equipment can save 5–10% of initial investment immediately — a direct first-year cash-flow impact.
• How to do it: List planned equipment/import lines and check against the list of domestically producible goods (domestically available goods are not exempt); complete procedures with customs.
• Watch out: Duty exemptions for materials and components are often tied to export-production or incentivized-project conditions — check the attached conditions carefully to avoid post-clearance customs recovery.

Item 7: Review land incentives ☐

• Action: Check whether the project qualifies for exemption from or reduction of land use fees, land rentals, and land-use tax under Article 14(2)(c) of the 2025 Investment Law, and the specific levels per area and project type.
• Why it matters: 50-year land rentals near HCMC, Hanoi, or Bac Ninh can represent 8–15% of total investment — exemption or reduction for the first 7–15 years fundamentally changes project economics.
• How to do it: Work with the locality's competent land authority; confirm the exemption/reduction level in writing and reflect it in the land lease / sublease contract.
• Watch out: Land incentives are applied locally, so practice varies by province — the locality's written confirmation matters as much as central regulations.

Item 8: Complete incentive procedures with the right authority ☐

• Action: Under Article 24 of Decree 96/2026/ND-CP, apply to the corresponding authority: the tax authority (CIT incentives), customs (import duty incentives), the competent land authority (land rental / land use fee incentives).
• Why it matters: Incentives do NOT apply automatically. Many eligible projects lose the first 1–2 years of incentives simply by never filing — or filing with the wrong authority.
• How to do it: Right after the IRC / investment policy approval decision is issued, prepare the incentive dossier per Ministry of Finance guidance; track processing and keep all receipts. Detailed conditions and procedures by incentive type: Vietnam Investment Incentives 2026: Conditions and Procedures.
• Watch out: The basis for incentives is the issued IRC, approval decision, or related certificate — their contents must be consistent with the incentive application dossier.

Item 9: Verify ongoing eligibility throughout the incentive period ☐

• Action: Review continuously-met conditions: full accounting, invoicing, and documentation regimes; accurate tax declaration and payment; continued satisfaction of sector, location, scale, and disbursement-schedule conditions for the entire incentive period.
• Why it matters: Under Law 67/2025/QH15, enterprises failing incentive conditions face tax recovery and penalties. Losing eligibility for one year means losing that year's incentives plus the risk of a full-period audit.
• How to do it: Put "incentive-condition compliance" on the annual internal compliance checklist; at each tax finalization, self-assess eligibility before applying the preferential rate on the return. See also: Checklist: Maintaining CIT Incentives for FDI in Vietnam.
• Watch out: Where conditions are interrupted, the investor is not entitled to incentives for the corresponding interrupted period (Article 24, Decree 96/2026) — early detection and voluntary top-up is always cheaper than being caught in an inspection.

Item 10: Compare 2–3 locations on one total-cost model ☐

• Action: Feed the results of items 1–9 into a 10–15-year total-cost comparison for 2–3 candidate locations: actual CIT payable, import duties, land rentals, logistics, labor, and compliance costs.
• Why it matters: Tax incentives are not everything. A 10%-rate location far from ports and short of skilled labor can cost more than a 20%-rate location with smooth logistics. Site decisions must rest on total cost of ownership, not a single incentive line.
• How to do it: Build a weighted comparison table; run sensitivity analysis under two scenarios (policy unchanged / policy change after 5 years).
• Watch out: ⚠ A model is only as good as its input assumptions — every incentive assumption should be reviewed by a lawyer/tax adviser before the board approves the location.

3. Common mistakes when doing this yourself

Mistake 1 — Choosing the location first, asking about incentives later. The correct order is: assess incentives → choose location → file. Reversed, investors often discover the project "just missed" eligibility by being in the wrong commune/ward or registering a non-matching business line.

Mistake 2 — Assuming "inside an industrial park means incentives". Industrial parks are incentivized locations, but CIT incentives still require meeting tax-law conditions and completing procedures. Plenty of in-park projects have faced recovery for self-applying preferential rates without tax-authority approval.

Mistake 3 — Never filing because incentives felt "automatic". Investment incentives are a right, not an automatic regime. No filing with the tax/customs/land authority = no incentives, and elapsed time cannot be recovered.

Mistake 4 — Interruption of conditions while still filing at preferential rates. Example: missing the committed disbursement schedule in year 3 but still declaring the 10% rate. On inspection: recovery of the difference + late-payment interest + administrative penalties — usually many times the tax "saved".

Mistake 5 — Not keeping evidence of incentive conditions. In a tax inspection five years later, the burden of proof is on the enterprise. Disbursement records, acceptance minutes, equipment import documents must be archived systematically from day one.

4. After completing the checklist

When all 10 items are ☑ (or ⚠ with counsel's view obtained), the investor has enough basis to:

1. Shortlist 1–2 final locations with a reviewed total-cost model;
2. Prepare the investment policy approval / IRC dossier with incentive contents stated consistently;
3. Build an incentive-condition compliance plan for the project's full life cycle.

A lawyer's review is mandatory when: the project is large-scale, the sector sits in a "grey zone" of the incentive list, the location is in an area under reclassification review, or the financial model depends too heavily on a single incentive type.

📞 Need an investment-incentive assessment for your project? Contact FLAT LAW FIRM — hotline 0988424851 for advice on the tax- and law-optimal location before you sign any commitment.

5. Frequently asked questions

1. Does a project inside an industrial park automatically enjoy tax incentives? No. Location in an industrial park alone is not enough. The project must fall within the incentive categories of Article 14 of the 2025 Investment Law and meet tax-law conditions, and must complete incentive procedures with the competent authority under Article 24 of Decree 96/2026/ND-CP.

2. Can one project enjoy several investment incentives at the same time? A project may satisfy multiple criteria at once (incentivized sector plus incentivized location), but for the same tax only one incentive rate applies — normally the most favorable. Different incentive types (CIT, import duty, land rental) may be enjoyed concurrently if each set of conditions is met.

3. We are enjoying incentives under the old law. Can we switch to the 2025 CIT Law if it is better? You may choose. Under Article 20 of Law 67/2025/QH15, enterprises enjoying incentives under prior legislation may opt for the incentive rates and holiday periods under either the old or the new rules for the remaining period, provided they meet the new law's conditions.

4. If incentive conditions are interrupted for one year, are incentives lost permanently or only for that year? Only for the interrupted period. Under Article 24 of Decree 96/2026/ND-CP, investors are not entitled to incentives for the corresponding period of interruption. But applying incentives while conditions are unmet exposes the enterprise to tax recovery and penalties.

5. Which authority decides whether a project enjoys investment incentives? There is no single authority. Investors apply to the authority administering each incentive: the tax authority (CIT), customs (import duty), the competent land authority (land rental / land use fees) — under Article 24 of Decree 96/2026/ND-CP.

Language versions

References

1. Investment Law No. 143/2025/QH15 dated 11/12/2025, effective 01/03/2026 (Articles 14, 15).
2. Decree No. 96/2026/ND-CP dated 31/03/2026 detailing the Investment Law (Articles 19, 24).
3. Corporate Income Tax Law No. 67/2025/QH15, effective 01/10/2025, applicable from tax year 2025 (Articles 10, 13, 14, 15, 19, 20).
4. Decree No. 320/2025/ND-CP dated 15/12/2025 guiding the Corporate Income Tax Law.
5. Circular No. 20/2026/TT-BTC effective 12/03/2026 detailing the 2025 CIT Law.

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