Incorporating in Vietnam: Key Incentives for Foreign Investors (2025 Update)

Vinex Official
Oct 13, 2025
3 min read

Thinking of incorporating in Vietnam? You’re not alone. In the first half of 2025, Vietnam recorded $21.52 billion in FDI inflows, underscoring its reputation as one of Asia’s most attractive investment destinations. The government continues to refine its investment incentives under the Law on Investment 2020 (amended), offering tax reductions, land-use benefits, and digital registration reforms that make business incorporation faster and more rewarding. Whether you’re launching a manufacturing base or a technology startup, understanding Vietnam’s incorporation process and incentives can help you reduce costs and accelerate entry into this fast-growing market.

Vietnam skyline illustrating key incentives, tax benefits, and business setup opportunities for foreign investors in 2025 — *Incorporation in Vietnam is supported by attractive tax incentives and streamlined policies for foreign investors in 2025.*

Understanding the Legal Basis for Incorporating in Vietnam

Foreign direct investment (FDI) enterprises established under Vietnam’s Law on Investment 2020 enjoy equal treatment with domestic firms, except for restricted sectors. The government provides a range of corporate incentives designed to:

Reduce setup costs and administrative friction
Encourage technology transfer and sustainable development

Strengthen Vietnam’s position as a regional innovation hub

Types of Incentives When Incorporating a Company in Vietnam

Type of Incentive	Description	Eligibility
Tax Preferences	Reduced corporate income tax (CIT) rates, exemptions, and deductions	Projects in high-tech, infrastructure, or priority industries.
Land and Infrastructure Support	Rent reductions and access to industrial zones with developed facilities	Projects in economic zones or border areas
Financial & R&D Support	Grants for research, training, or technology application	Innovative or high-tech enterprises meeting capital thresholds.

Example: A manufacturing company investing VND 1,000 billion in a priority economic zone could save up to 15% on taxes in the first decade.

Corporate Income Tax (CIT) Incentives

For businesses incorporating in Vietnam, CIT is one of the most significant incentives:

Standard rate: 20%
Preferential rate: 10–17% for up to 15 years in encouraged sectors
New FDI projects: 4-year CIT exemption + 50% reduction for the following 9 years
Large-scale high-tech projects (≥ VND 3,000 billion): up to 5% CIT for 37 years
Import duty exemption: machinery and raw materials for production

Under Resolution 198/2025/QH15, business license fees are waived until 2026, further easing entry costs.

Land and Infrastructure Incentives

When incorporating a foreign-owned company in Vietnam, land incentives can significantly lower initial costs.

Zone	Incentive	Duration
Economic Zones	50-100% rent exemption	5-15 years
Industrial Parks	20-50% rent reduction	Up to 20 years

Projects located in coastal, border, or high-tech zones may also qualify for additional utility subsidies and infrastructure grants, making Vietnam more competitive than ASEAN peers like Thailand.

Conditions and Sectors Eligible for Incorporation Incentives

According to Decree 31/2021/ND-CP and its 2025 amendments, incentives apply to the following sectors:

High-tech: AI, semiconductors, biotechnology
Agriculture: high-tech farming, sustainable food processing
Infrastructure: energy, logistics, transportation

Key Conditions:

Minimum capital: e.g., VND 100 billion for financial services
Location: in economic zones or disadvantaged areas
Compliance: meet environmental and labor standards

Restricted sectors (like banking or defense) require additional government approval.

Procedures for Establishing Businesses and Applying Incentives

Step	Description	Timeline	Required Documents
Pre-Investment Approvaal	For regulated sectors	15–45 days	Project proposal
IRC – Investment Registration Certificate	Official permission for foreign investment	15–45 days	Proposal + financial proof
ERC – Enterprise Registration Certificate	Establishes legal entity	5–7 days	Company charter, board list
Corporate e-ID Registration	From July 2025 via VNeID system	3–15 days	Digital identity documents

Tip: Prepare bilingual documents and consult local experts to streamline the process.

2025 Updates to Incorporation Policies

Vietnam has introduced several pro-investor reforms to modernize the incorporation process:

Pre-2025	Post-2025	Impact
Location-based incentives	Sector-based focus	Encourages high-tech industries
Manual licensing	Online national portal	Faster approvals
Multiple tax filings	Unified digital tax system	Simpler compliance

Other updates include:

15% global minimum tax for multinational corporations
Extended R&D deductions
Business license fee removal (from 2026)

These changes align with Vietnam’s digital transformation and sustainable growth agenda.

Challenges and Best Practices

While incorporating in Vietnam offers many advantages, challenges include:

Complex paperwork for special sectors
Policy changes requiring local legal updates
Delays in land-use approvals

Best Practices:

Engage legal consultants familiar with foreign-invested enterprises (FIEs).
Verify capital contributions within 90 days.
Maintain transparent environmental and accounting records.

With careful preparation, the advantages far outweigh the challenges.

Incorporate in Vietnam and Unlock Long-Term Growth

Incorporating in Vietnam in 2025 offers foreign investors a rare combination of affordability, legal stability, and market access. From tax incentives to digitalized procedures, Vietnam is positioning itself as the next strategic hub for international entrepreneurs.

Why Act Now?