Practical Guide for Foreign Investors (2026-2027)
\n1. Background: Why Vietnam is changing its FDI incentive system
\nVietnam historically attracted foreign investors through very generous tax incentives, such as:
\n\u2022\tCorporate income tax (CIT) holidays (4\u20139 years)
\n\u2022\tPreferential CIT rates (5\u201310%)
\n\u2022\tLong-term tax reductions
\nHowever, the OECD Global Minimum Tax (Pillar 2) requires multinational companies with global revenues of \u20ac750 million or more to pay at least 15% effective tax worldwide.
\nIf Vietnam taxes below 15%, the investor\u2019s home country can collect the difference.
\nAs a result:
\n\u2022\tVietnam\u2019s traditional tax incentives lose their effectiveness
\n\u2022\tThe government risks losing tax revenue to other countries
\nVietnam therefore implemented the Global Minimum Tax from 1 January 2024 and began redesigning its entire FDI incentive framework.
\n2. Who is affected by the new rules
\nThe global minimum tax applies only to large multinational groups.
\nThreshold
\nA company is affected if:
\n\u2022\tGlobal consolidated revenue \u2265 \u20ac750 million
\nTypical companies affected in Vietnam
\nExamples include:
\n\u2022\tsemiconductor manufacturers
\n\u2022\telectronics manufacturers
\n\u2022\tlarge technology groups
\n\u2022\tmajor automotive and industrial producers
\nMany of Vietnam\u2019s largest investors fall into this category.
\n3. Vietnam\u2019s key policy response: Investment Support Fund
\nThe central instrument of the new FDI strategy is the Investment Support Fund, introduced under Decree 182\/2024\/N\u0110-CP.
\nPurpose
\nThe fund replaces traditional tax incentives with direct financial support.
\nTypes of support
\nEligible investors may receive:
\n1.\tCash grants
\n2.\tSubsidies for high-tech equipment
\n3.\tSupport for R&D activities
\n4.\tWorkforce training funding
\n5.\tInfrastructure support
\n6.\tTechnology transfer support
\nUnlike tax incentives, these subsidies do not reduce the corporate tax rate, so they remain compliant with OECD Pillar 2 rules.
\n4. Priority sectors for new investment incentives
\nVietnam is now targeting high-quality FDI rather than volume-based investment.
\nThe following sectors receive priority support:
\n\u2022\tSemiconductors
\n\u2022\tArtificial intelligence
\n\u2022\tDigital technologies
\n\u2022\tAdvanced manufacturing
\n\u2022\tRenewable energy
\n\u2022\tBiotechnology
\n\u2022\tHigh-tech electronics
\n\u2022\tResearch and development centers
\nThese sectors are considered strategic for Vietnam\u2019s long-term economic development.
\n5. Practical implications for foreign investors
\n1. Tax incentives are no longer the main attraction
\nTraditional tax holidays may still exist, but for large multinational groups:
\n\u2022\tthe effective tax rate will ultimately be at least 15%
\n2. Investment negotiations will focus on subsidies
\nInvestors should expect negotiations with authorities to focus on:
\n\u2022\tgovernment support packages
\n\u2022\tinfrastructure commitments
\n\u2022\tworkforce training programs
\n\u2022\tR&D incentives
\n3. Increased compliance obligations
\nLarge multinational companies must prepare for:
\n\u2022\tPillar 2 reporting obligations
\n\u2022\tcalculation of effective tax rate
\n\u2022\tcompliance with top-up tax rules
\n4. Strategic investment screening
\nVietnam increasingly evaluates projects based on:
\n\u2022\ttechnology level
\n\u2022\tenvironmental impact
\n\u2022\tinnovation potential
\n\u2022\tsupply chain contribution
\nLabor-intensive projects with limited technological value receive lower priority.
\n5. Opportunities for foreign investors
\nDespite the tax reform, Vietnam remains highly attractive due to:
\n\u2022\tstrong economic growth
\n\u2022\tpolitical stability
\n\u2022\texpanding manufacturing base
\n\u2022\tstrategic position in global supply chains
\n\u2022\tstrong government commitment to high-tech investment
\nThe new incentive model may even provide larger total financial support, particularly for large technology projects.
\nConclusion
\nVietnam is undergoing a fundamental transformation of its foreign investment incentive system due to the implementation of the OECD Global Minimum Tax.
\nThe country is moving away from a tax-holiday-driven FDI model toward a system based on direct financial support, innovation incentives, and strategic sector development.
\nFor multinational investors, the practical implications are clear:
\n\u2022\tthe minimum effective tax rate will be 15%
\n\u2022\ttraditional tax incentives will play a smaller role
\n\u2022\tinvestment negotiations will increasingly focus on government subsidies, infrastructure support, and R&D incentives
\nAt the same time, Vietnam continues to actively compete for global investment, particularly in high-technology and strategic industries.
\nForeign investors who align their projects with Vietnam\u2019s innovation and industrial policy priorities will continue to find significant opportunities in the Vietnamese market
\n***
\nPlease do not hesitate to contact Dr. Oliver Massmann under omassmann@duanemorris.com if you have any questions or want to know more details on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.<\/p>\n","protected":false},"excerpt":{"rendered":"
Practical Guide for Foreign Investors (2026-2027) 1. Background: Why Vietnam is changing its FDI incentive system Vietnam historically attracted foreign investors through very generous tax incentives, such as: \u2022 Corporate income tax (CIT) holidays (4\u20139 years) \u2022 Preferential CIT rates (5\u201310%) \u2022 Long-term tax reductions However, the OECD Global Minimum Tax (Pillar 2) requires multinational … <\/p>\n
Continue reading “Lawyer in Vietnam Dr. Oliver Massmann -Vietnam\u2019s New FDI Incentive System After the Global Minimum Tax”<\/span><\/a><\/p>\n","protected":false},"author":24,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"ppma_author":[1007],"class_list":["post-1906","post","type-post","status-publish","format-standard","hentry","category-vietnam-general"],"authors":[{"term_id":1007,"user_id":24,"is_guest":0,"slug":"omassmann","display_name":"Dr. Oliver Massmann","avatar_url":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-content\/uploads\/sites\/19\/2014\/08\/massmannoliver-125x150.jpg","author_category":"1","last_name":"Massmann","first_name":"Dr. Oliver","job_title":"","user_url":"http:\/\/www.duanemorris.com\/attorneys\/olivermassmann.html","description":"Read Oliver's bio.<\/a>"}],"_links":{"self":[{"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/posts\/1906","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/users\/24"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/comments?post=1906"}],"version-history":[{"count":0,"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/posts\/1906\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/media?parent=1906"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/categories?post=1906"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/tags?post=1906"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/ppma_author?post=1906"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}