Vietnam pioneers world’s first dedicated law on digital technology industry

Passed during the ongoing ninth sitting of the 15th NA in Hanoi on Saturday, the bill received resounding approval after 441 of the 445 deputies present voted in its favor.

Drafted by the Ministry of Science and Technology, this landmark legislation is scheduled to take effect on January 1, 2026.

Its aim is to accelerate Vietnam's digital transformation, empower domestic tech companies to grow sustainably, deepen integration into global markets, and elevate the nation's prominence in the digital age.

By reinforcing Vietnam's position within global technology value chains, the law strengthens the country's ability to compete with leading digital economies.

It sets an ambitious vision of increasing domestic production of technology goods and cultivating a thriving ecosystem of 150,000 digital enterprises by 2035, as reported by the Vietnam News Agency.

To realize these goals, the law provides a suite of strategic initiatives and tailored incentives.

Foreign-invested firms will be encouraged to transfer technology and collaborate with local partners, supported by multi‑year corporate tax incentives.

Small and medium enterprises will receive assistance with infrastructure, workforce training, and preferential access to public procurement.

Startups will benefit from subsidies covering up to half of their costs for acquiring advanced technologies and building prototypes, thereby reinforcing the 'Make in Vietnam' ethos.

Large-scale projects stand to gain from extended tax breaks, funding support from development investment funds, and import duty exemptions on high-tech equipment.

Research and development activities will be further accelerated by comprehensive tax relief, reductions and grants, equipping Vietnamese products for international competitiveness.

In the financial realm, government investment will target strategic and innovation-driven initiatives.

Enterprises engaged in digital technology production and ancillary services will enjoy tax incentives comparable to those in specially disadvantaged zones, encouraging greater foreign investment and enhanced production capacities.

A crucial provision requires the establishment of Vietnamese digital technology representative offices in major global markets.

These offices, working alongside international cooperation programs, will help domestic firms evolve into true multinationals capable of competing alongside global tech giants.

To shore up the talent pipeline, the law offers personal income tax exemptions on qualified digital professionals during their first five years of work in Vietnam.

Foreign experts will benefit from a streamlined process featuring five‑year visas and waivers on work permit requirements, reducing administrative barriers and attracting international talent for technology transfer and knowledge exchange.

Notably, the legislation defines a robust legal framework for artificial intelligence, according to the Vietnam News Agency.

It classifies AI systems into high‑risk and non‑high‑risk categories, enforcing strict standards and monitoring on high‑risk applications.

AI products must bear clear identification markings to ensure transparency.

The state will channel investments into AI research and data center infrastructure, along with tax and financial incentives aimed at spurring innovation across enterprises.