Vietnam’s FDI attraction policy has entered a new phase with a clear philosophy: “quality over quantity”. Politburo Resolution 50-NQ/TW (2019) orients policy through 2030: prioritising high-tech projects, supporting industries, the digital economy, the green economy, and large-scale projects with spillover effects. For new investors, understanding this orientation helps “place the project correctly” — improving approval prospects and incentive eligibility.
Vietnam’s FDI Attraction Policy Direction
Resolution 50-NQ/TW dated 20 August 2019 of the Politburo on orientations for foreign investment attraction through 2030 marked an important shift: from FDI attraction by “quantity” to “quality” — prioritising high-tech projects, supporting industries, the digital economy, the green economy, and large-scale projects with spillover effects and linkages to domestic enterprises.
The current legal framework for investment is the Law on Investment 2025 (No. 143/2025/QH15, effective from 1 March 2026, replacing Law No. 61/2020/QH14). Investors should note that investment incentives (tax, land) apply according to the specific sector, location and scale of each project under the investment and tax laws in force at the time of licensing — there are no “default” incentives for every FDI project.
From “Red Carpet” to “Selective”: The Shift of Resolution 50-NQ/TW
Resolution 50-NQ/TW dated 20 August 2019 of the Politburo on orientations for perfecting institutions and policies to attract foreign investment through 2030 marked a turning point: Vietnam no longer courts FDI at any cost. The new orientation focuses on: (1) high-tech and source-technology projects with technology transfer; (2) supporting industries deeply embedded in global value chains; (3) the digital and green economies, clean energy; (4) large-scale projects with long-term commitment and linkages to domestic firms; (5) limiting labour-intensive, obsolete-technology, pollution-risk projects.
In practice, this shows in increasingly rigorous project appraisal: licensing authorities examine the technology used, investment-per-worker ratios, environmental commitments and localisation rates. Investors bringing advanced technology, green processes and local-workforce training plans are welcomed far more warmly than pure contract-manufacturing projects.
The Current Legal Framework Investors Must Know
The Law on Investment 2025 (No. 143/2025/QH15, effective from 1 March 2026, replacing Law No. 61/2020/QH14) is the foundational legal framework for all FDI projects today. It sets out: prohibited business lines; conditional business lines and foreign investors’ market-access conditions; procedures for the Investment Registration Certificate (IRC); and forms of investment incentives and support.
On incentives, the cardinal principle is: incentives attach to specific sectors, locations and scales — there are no “default” incentives for every FDI project. Typical incentive groups include corporate income tax preferences (preferential rates, time-bound exemptions/reductions), land-rental exemptions/reductions, and special investment support for high-tech projects, R&D centres and very-large-scale projects. Specific conditions and levels are set in the Law on Investment, tax laws and guiding instruments at the time of licensing — investors must reconcile each project individually, not mechanically apply experience from another project.
A “Right-Placement” Strategy for New Investors
First, choose an aligned sector: high-tech manufacturing, electronic components, renewable energy, modern logistics, data centres — areas where Vietnam is hungry for capital and technology. Second, prepare a convincing technology–environment dossier: clearly explain the technology used, environmental standards, technology-transfer plans and local workforce training. Third, engage local investment-promotion agencies early: industrial-park/economic-zone management boards and provincial investment promotion centres are the focal points for procedures, premises and incentive linkage. Fourth, model incentives conservatively: include in the financial model only the incentives “certainly achievable” under the legal texts, treat the rest as upside — never build a project wholly dependent on uncertain incentives.
Investment Incentives: What Do Investors Actually Get?
Vietnamese law grants investment incentives by encouraged sector (high tech, supporting industries, renewable energy, infrastructure…), encouraged location (disadvantaged areas, industrial parks, economic zones, high-tech parks) and project scale. Common forms include: corporate income tax incentives (preferential rates below 20% for defined periods, tax holidays in early years followed by 50% reductions — exact levels per case under tax law); land and water-surface rental exemptions/reductions; and special investment support for high-tech projects, innovation centres and very-large-scale projects.
The crux: incentives are only legally secure when recorded in the IRC or approval document. Investors should work with the licensing authority to confirm each applicable incentive in writing, rather than relying on promotional investment-brochure claims. Note also that new international commitments (such as the Pillar Two global minimum tax) may affect the real value of tax incentives — model that scenario too.
Incentive negotiations work best when the investor brings something the locality wants: advanced technology, high investment-per-worker, environmental commitments and local workforce training. Localities compete for quality projects, and a well-prepared dossier describing technology, employment and spillover effects strengthens the investor’s hand considerably.
Industrial Parks and Economic Zones: Choosing “Land” Is Strategy Too
Vietnam has hundreds of industrial parks, export-processing zones, economic zones and high-tech parks at varying infrastructure maturity. When choosing a site, assess: technical infrastructure (power, water, wastewater treatment, telecoms), transport connectivity (seaports, expressways, airports), labour supply within hiring radius, existing industry clusters (for satellite suppliers), and the management board’s support capacity (one-stop-shop, post-licensing support). Industrial land rents vary widely by region — but “cheap” is not “good” without infrastructure and labour. Field surveys and conversations with firms already operating in the park are indispensable steps.
Finally, think beyond the signing ceremony. The investors who prosper in Vietnam treat government relations as a long-term asset: honouring commitments on schedule, engaging with local authorities on workforce and community matters, and using official dialogue channels when problems arise. In a system where policy implementation varies by locality, a reputation for reliability opens doors that incentives alone cannot.
Aftercare and Expansion: The Second Investment Decision
The first project is only the beginning: Vietnam’s strongest FDI signal in recent data is the surge in adjusted capital — incumbents expanding. Plan for expansion from day one by securing land-use rights with room to grow, designing factory layouts for phased capacity, and maintaining clean compliance records (tax, environment, labour), which licensing authorities review when approving expansions. Capital increases follow the same IRC-adjustment procedures as the initial registration, and a track record of on-schedule disbursement makes approvals materially smoother. Many long-term investors also reinvest retained earnings locally rather than repatriating everything — a strategy that compounds growth while demonstrating commitment that local authorities remember at the next approval round.
Keep a written incentives register for each project — every incentive, its legal basis, conditions and expiry — reviewed annually with your tax and legal advisers so nothing lapses unnoticed.
FDI-Policy Approach Checklist
- Align with orientation: does your project fall in a priority group (high-tech, supporting industries, green, digital) under Resolution 50-NQ/TW?
- Check the sector: is your line in the prohibited/restricted market-access lists under the Law on Investment 2025?
- Unpack incentives: list each incentive (tax, land) with its specific legal conditions — never rely on verbal promises.
- Prepare a persuasive dossier: technology, environment, transfer, training — the four pillars licensing authorities care about.
- Legal companionship from day one: contact FLAT Law Firm to structure the project, prepare the IRC dossier and negotiate incentives lawfully.
Contact us
FLAT Law Firm accompanies foreign investors throughout the full project lifecycle in Vietnam: from market research, investment structuring and IRC/ERC procedures to tax, labour, land and operations. Contact us for advice tailored to your case.
This article has been quality-reviewed by the FLAW AI Legal Council
