Most FDI enterprises in Vietnam self-fund all vocational training costs without knowing the State budget runs three parallel support channels, of which the most certain is the deduction of training costs in corporate income tax under Article 35 of the Law on Vocational Education 124/2025. This article maps all three channels and how an enterprise accesses each.
Legal basis
- Law on Vocational Education 124/2025/QH15, Article 35: enterprise costs for vocational training activity are deductible when determining corporate income tax under tax law — a tax-based support mechanism applying without distinction as to enterprise capital origin.
- The Law on Support for Small and Medium Enterprises and guiding Decree 80/2021/ND-CP: the State budget supports small and medium enterprises in training, including support for direct vocational training costs of enterprise workers under program norms and conditions.
- National target programs and State or local ordered training programs: support for worker training for enterprises in priority sectors and localities under implementation decisions of the competent authority in each phase.
Does the State fund vocational training for enterprises? What are the conditions?
Yes, and an FDI enterprise can access all three channels with different conditions. Channel one — tax-based support under Article 35 of the Law on Vocational Education 124/2025: every enterprise, including an FDI enterprise, deducts valid vocational training costs when determining corporate income tax; the core condition is that training costs are real, serve production and business activity and carry full lawful vouchers — this channel needs no application, the enterprise declares and settles it with the tax authority itself. Channel two — direct budget support for small and medium enterprises under the Law on Support for Small and Medium Enterprises and Decree 80/2021/ND-CP: an FDI enterprise meeting the small and medium enterprise criteria in Vietnam receives support for part of direct vocational training costs of its workers under the norms of the support program at implementation time, on conditions that the enterprise is a support subject, the training course falls within the supported scope and the dossier is approved by the receiving agency under the program process. Channel three — State and local target programs and ordered training: in each phase, the State and localities run programs supporting worker training for enterprises in priority sectors (such as semiconductors and high technology) or priority localities; the enterprise joins under the selection notice of the program with conditions on the trained worker subjects and commitments to recruit and use workers after training. The common point of channels two and three is selectivity by program and timing — the enterprise must track notices of the management authority at the factory locality rather than wait for a standing policy.
Where is the support dossier filed? What is the maximum support?
On filing place: the tax channel files no support application but accounts within the corporate income tax finalisation dossier with the directly managing tax authority; the small and medium enterprise support channel and target programs file dossiers at the State management authority for labour and vocational education at the locality where the enterprise operates (the specialised agency of the provincial People Committee) or through the program implementation focal point published in the notice of each program. A typical dossier comprises: a support request, the training plan and program with the list of trained workers, the training contract with the training institution or the internal training file, cost vouchers and a training result report with a post-training employment commitment as the program requires. On maximum support: there is no single unified percentage for all programs — support levels are set by the norms of each program at implementation time (as a percentage of valid training costs or as a norm per trained worker, with an overall cap per enterprise per phase), while for the tax channel the support value equals the full valid training costs deducted multiplied by the corporate income tax rate applying to the enterprise. The enterprise must therefore read the norms in the specific program notice at its own locality before budgeting, and must never build a financial plan on a support figure not yet approved in writing by the program.
Access strategy for FDI enterprises
The optimal sequence is: by default account all training costs to tax voucher standards so the Article 35 deduction channel always applies; in parallel review the small and medium enterprise status of the Vietnamese legal entity so the direct support channel of Decree 80/2021 is not missed; register to track target program notices at the factory locality and assign a government relations focal point for training support; and where joining a program with post-training recruitment commitments, place that commitment into the human resources plan with a clear owner to avoid support clawback for unfulfilled commitments. The three support channels combined can reduce net training costs significantly, but only for an enterprise with file discipline from day one.
Frequently asked questions
Does the State fund vocational training for enterprises?
Yes through three channels: deduction of training costs in corporate income tax under Article 35 of the Law on Vocational Education 124/2025 (applying to all enterprises including FDI, with no application needed); direct budget support for vocational training of small and medium enterprises under the SME Support Law and Decree 80/2021; and national target and ordered training programs of the State and localities for priority sectors and localities by phase.
What are the conditions for support?
The tax channel needs real training costs serving production and business with full lawful vouchers. The SME channel needs the enterprise to meet small and medium criteria, the course within supported scope and the dossier approved under the program. The target program channel needs the enterprise within the priority sector and locality of the program and post-training recruitment and employment commitments as required.
Where is the support dossier filed?
The tax channel is accounted in the tax finalisation dossier with the managing tax authority, with no support application. The direct support and target program channels file at the provincial labour and vocational education management authority where the enterprise operates or the published program focal point, comprising a support request, plan and trainee list, training contract, cost vouchers and a result report.
What is the maximum support level?
There is no unified rate for all programs: direct support is set by the norms of each program at implementation time (as a share of valid costs or a norm per trainee, capped per enterprise). For the tax channel alone, the support value equals the full valid training costs deducted multiplied by the corporate income tax rate of the enterprise. The enterprise must read the norms in the specific program notice before budgeting.
This article has been quality-reviewed by the FLAW AI Legal Council