The Vietnamese government has officially amended the Law on High Technology No. 133/2025/QH15 dated 10 December 2025 (“Amended High Tech Law”) which will take effect from 1 July 2026.
The Amended High Tech Law marks a fundamental shift in Vietnam’s strategy for attracting foreign direct investment. For a long time, Vietnam had operated on a quantity first model; now it is officially transitioning to a quality and substance model. From a foreign investor’s perspective, the implication is that large-scale capital alone might no longer be a guaranteed ticket to top-tier incentives.
Below are some highlights of the Amended High Tech Law.
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1.
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New Classifications of High Technologies
Compared to prior law and regulations, the Amended High Tech Law revised the mechanism to determine high technologies for priority; notably, the law added new definition for strategic technologies (“Strategic Tech”), and categorized high technologies into group 1 and group 2 based on certain qualitative criteria (“Group 1 High Tech” and “Group 2 High Tech”).
Notably, the definition of core technologies (“Core Tech”) has been refined to describe foundational technologies that can have decisive impact on the features, quality and added value of high technologies and Strategic Tech.[1] However, the Amended High Tech Law has yet to specify what technologies would constitute Core Tech.
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1)
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Strategic Tech
Under the Amended High Tech Law, Strategic Tech is defined as technology possessing breakthrough and pervading properties that the State has identified to focus on investment development.[2] Specifically, Strategic Tech needs to meet both the requirements of a high technology and one of the below additional criteria.[3]
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①
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Economic impact: There must be breakthrough impact on socio-economic development;
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②
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National advantage: Long-term national competitive advantage must be created;
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③
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Industry formation: The technology must be able to form new production methods, new industries, or new value chains; or
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④
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Domestic mastery: The technology must be able to form based on the Core Tech that domestic organizations or individuals have researched or mastered.
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In addition, enterprises must also meet all the following requirements to be considered Strategic Tech enterprises.
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①
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Production or supply of Strategic Tech: The enterprise must produce products or supply services that are considered Strategic Tech included in the List of Strategic Technology Products;
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②
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Domestic capital ownership: The contribution of capital or share ownership by Vietnamese domestic investors must be 51% or higher, subject to possible exceptions to be determined by the Prime Minister;
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③
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Ownership of Strategic Tech: A Strategic Tech enterprise must own or co-own the Strategic Tech or Core Tech used to manufacture its products or provide its services specifically within Vietnam. This is a higher standard compared to general high-tech firms who may only have a “right to use” such technology; and
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④
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Other criteria: The enterprise must also meet specific quantitative criteria regarding revenue, R&D spending, localization rate and labor usage. These criteria are expected to be further prescribed in future Government regulations.
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2)
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Group 1 High Tech
While the Amended High Tech Law does not directly classify high technologies into group 1 and group 2 per se , it applies such categorization to the enterprises producing high technologies. Specifically, to be classified as a Group 1 High Tech, an enterprise must first meet all the general criteria for a high-tech enterprise, including:
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producing products from the approved high-tech list and using environmentally friendly processes;
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owning technology, co-owning technology or having the legal right to use technology;
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③
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meeting the criteria regarding revenue, research and development expenditure in Vietnam, and direct employees performing research and development (together, the “High-Tech Enterprise Requirements”).[4]
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In addition, such high-tech enterprise must also fulfill at least one of the following specific requirements:
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①
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R&D performance: The enterprise must actively perform research and development (R&D) for high technologies or Core Tech;
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②
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Localization rate: It must manufacture high-tech products that achieve a minimum localization rate as prescribed by the government for its specific industry;
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③
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R&D spending: It must ensure that its annual spending on R&D activities within Vietnam reaches at least 1% of its net revenue (after deducting input values).[5]
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3)
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Group 2 High Tech
On the other hand, Group 2 High Tech enterprises are those that meet all of the general High-Tech Enterprise Requirements but have not yet reached the specific thresholds applicable to Group 1 High Tech, such as those related to annual R&D spending in Vietnam or government-prescribed localization rates.[6]
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Revised Incentives Structure
The Amended High Tech Law represents a shift in policies by Vietnamese government from “general encouragement” for high technologies to a system of “focused investment” and “substantive control”.[7] The Amended High Tech Law also removed certain provisions related to incentives and venture investments, which have been governed by other laws and regulations.[8]
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1)
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Highest Incentives for Strategic Tech and Group 1 High Tech
Enterprises engaged in the production and provision of Strategic Tech and Group 1 High Tech will be eligible to highest incentives under applicable laws.
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①
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10% CIT for 25 years: The Amended High Tech Law directly revised the Law on Corporate Income Tax (“CIT Law”), Article 13, to provide these enterprises with a reduced CIT rate of 10% for 25 years.[9] Further, the reduced tax rate will be calculated from the first year when the enterprise has taxable income. If there is no taxable income in the first 3 years, the reduced tax rate will start calculating from the 4th year.[10]
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②
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Exemption of import duty: The Law on Import and Export Duties is also revised to provide these enterprises with 5-year import duty exemption on raw materials, supplies, and components used for their R&D and production;
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③
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Public-Private Partnership (PPP) and bidding advantages: The PPP Law is revised to provide these enterprises with an exemption from proof of equity capital capacity in PPP projects.[11] They will also receive priority in bidding for investment or procurement that involve the State budget.[12]
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2)
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Incentives for Group 2 High Tech
Group 2 High Tech are eligible for standard incentives and support policies regarding land, investment, trainings, etc. under applicable laws.[13] However, in terms of CIT incentive, while the Amended High Tech Law explicitly provides Strategic Tech and Group 1 High Tech with 10% tax rate for 25 years, Group 2 High Tech can only benefit from the standard 15 years reduced tax rate for high technology enterprises as governed in the CIT Law.
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Streamlining in procedures
The Amended High Tech Law also streamlined the establishment procedures for High-Tech Zones following the delegation of authority from Prime Minister to Provincial People’s Committees. Details of the new procedures will be prescribed in upcoming regulations by the Government.
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Implications
The Amended High Tech Law can be seen as reflecting the Vietnamese government’s strong commitment to the development of the high tech sector, as it provides stronger incentives to companies that invest capital and employ human resources for R&D and localization in connection with high value added technologies, while excluding simple manufacturing or license based companies from such incentives.
On the other hand, this also marks a fundamental shift in Vietnam’s strategy from a foreign investor’s perspective. Previously, big tech giants could qualify for the highest incentives primarily by meeting thresholds for investment capital and revenue, even if their local operations were largely “high-tech assembly”. However, this is not the case anymore; a “simple manufacturing” alone without a significant R&D or technology transfer might not guarantee foreign investors top-tier incentives in Vietnam.
Accordingly, foreign investors should closely monitor the forthcoming governmental regulations implementing the Amended High Tech Law and reassess their strategies in Vietnam with respect to R&D, technology ownership, local partners, and supply chains.
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[1] Amended High Tech Law, Article 3.2
[2] Amended High Tech Law, Article 3.2
[3] Amended High Tech Law, Article 5.2.
[4] Amended High Tech Law, Article 15.1, 15.2.
[5] Amended High Tech Law, Article 15.4.
[6] Amended High Tech Law, Article 15.5.
[7] https://vnexpress.net/nhung-diem-moi-cua-luat-cong-nghe-cao-vua-thong-qua-4992437.html
[8] Proposal Statement of the Draft Law
[9] Amended High Tech Law, Article 25.7(d).
[10] Amended High Tech Law, Article 25.7(h).
[11] Amended High Tech Law, Article 25.4.
[12] Amended High Tech Law, Article 14.
[13] Amended High Tech Law, Article 16.
[Korean Version]
