Perhaps never before has innovation been so highly regarded in Vietnam as it is today. The nation is witnessing a rise in innovation, which is a keyword in most of the leadership’s speeches and government directives on economic development. The move is driven by government policies and support, accelerated digitalization, and an investment surge. Identified as a key driver for Vietnam’s transition into a new era, innovation is creating numerous opportunities for both local and foreign companies.
While the National Master Plan 2021-2030[1] emphasizes the role of innovation in Vietnam’s development, the landmark policy that paves the way for it is the Politburo’s Resolution No. 57-NQ/TW[2]. This first-ever resolution marks a strategic shift in the political leadership’s thinking about innovation. It sets the goal for Vietnam to be “among top 30 countries in the world in terms of innovation and digital transformation” by 2045. The resolution promotes public-private partnerships on innovation, encourages businesses to increase investment in research and development (R&D) and to lead innovation. It also emphasizes and prioritizes new technologies, especially artificial intelligence (AI), and the development of an innovative startup ecosystem in Vietnam.
Following the ruling Party’s Resolution 57, the Vietnamese National Assembly and Government have adopted a series of policies to facilitate and scale up innovation. Notably:
Decree No. 182/2024/ND-CP[3] dated December 31, 2024, on establishing, managing, and using the Investment Support Fund. With a primary focus on promoting R&D in the semiconductor and AI sectors, this decree is aimed at accelerating innovation, enhancing technological capacity, and positioning Vietnam as a regional leading hub for hi-tech industries.
Resolution No. 193/2025/QH15[4] dated February 19, 2025, on piloting several special mechanisms and policies to create breakthroughs in the development of science, technology, innovation, and national digital transformation, and Decree 88/2025/ND-CP[5] providing guidelines for its implementation. A highlight of this policy is the risk acceptance in R&D activities. Accordingly, concerned organizations and individuals will be exempt from civil liability in case of causing damage to the State while performing the state-funded R&D activities, provided that they have fully complied with the prescribed procedures and regulations.
Decree 97/2025/ND-CP[6] dated May 5, 2025, provides preferential mechanisms and policies for the National Innovation Center (NIC). The decree, effective right on the date of its signing, introduces wide-ranging incentives related to labor, credit, land use and public services aimed at boosting Vietnam’s innovation ecosystem. For example, work permit will be exempt for foreigners performing labor contracts with the NIC units in managerial, executive, expert, or technical positions that Vietnamese workers cannot fill; investment projects from innovative startups based at the NIC units and the Center’s investment projects will be eligible for state investment credit if they meet the loan conditions prescribed by law. The Center is also allowed to receive and use ODA capital and preferential loans from foreign donors. Individuals and businesses at the NIC units can mobilize and secure fundings from both state and non-state stakeholders, and enjoy streamlined administrative procedures to facilitate innovation and startup activities.
Resolution 198/2025/QH15[7] of May 17, 2025, and Resolution 139/NQ-CP[8] of May 18, 2025, on supporting the development of the private sector. These resolutions cover various provisions to foster a more favorable environment for businesses and incentivize innovation, such as offering a 30 percent reduction in land rental for the first five years for hi-tech enterprises, SMEs and startups in industrial parks and cottage industry zones; exempting startups and startup investment fund management companies from corporate income tax for two years on income derived from innovative startup activities; allowing businesses to allocate up to 20% of taxable income to technology and innovation funds.
Meanwhile, a few other important bills are scheduled to be passed in June 2025, giving more catalysts for digital transformation and innovation efforts, including:
The Law on Science, Technology and Innovation[9], which seeks to expand and strengthen science and technology manpower, promotes the commercialization of research outcomes, establishes a financial framework for science-tech development, and innovation. Once passed, this will be the first-ever law on innovation in Vietnam.
The Digital Technology Industry Law[10], which provides incentives and a sandbox mechanism for new digital technology products and services, particularly AI.
The Law on Corporate Income Tax[11], which introduces tax incentives to accelerate the development of science, technology and innovation, such as a three-year tax exemption for income generated from new technology products.
Various policies and initiatives have helped create an enabling environment for Vietnam’s innovation and startup ecosystem to boom. In 2024, investment in innovation hit a record high of USD 2.3 billion with 141 deals[12], and the country jumped two spots on the Global Startup Ecosystem Index as well as the Global Innovation Index. Looking ahead, with rising digital adoption and wide-ranging government support, there are numerous business opportunities for investors in innovative sectors in Vietnam, such as green, healthcare, agricultural and manufacturing technologies. The country is poised to see more investments in innovation in 2025 and beyond./.
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