Our Newsletter #47 would lead you on the following:
LEGAL UPDATE
I. Tax and cost incentives to promote private sector development
On 15 January 2026, the Government issued Decree No. 20/2026/ND-CP (“Decree 20”), providing detailed regulations and guidance on the implementation of certain provisions of Resolution No. 198/2025/QH15 on special mechanisms and policies for private sector development. Decree 20 took effect on 15 January 2026 and provides incentive mechanisms applicable to enterprises, household businesses, individual businesspersons, and relevant organizations and individuals, with a view to promoting Vietnam’s private sector, with the following tax and cost incentives:
1. Tax incentives
Decree 20 establishes a comprehensive tax incentive framework affecting enterprises, investors, and human resources.
- Corporate income tax (“CIT”)
- Tax exemption/reduction for management companies of innovative start-up investment funds, calculated from the year in which taxable income arises. Specifically, such companies are entitled to a full CIT exemption for the first 2 years, followed by a 50% reduction in CIT payable for the next 4 years, on income derived from innovative start-up activities.
- 100% tax exemption on income from the transfer of shares, capital contributions, capital contribution rights, rights to purchase shares, and rights to purchase capital contributions in innovative start-up enterprises, except for listed securities; and
- Newly established small and medium-sized enterprises are entitled to a 03-year tax exemption, subject to anti-abuse conditions.
- Personal income tax (“PIT”)
- PIT exemption upon the transfer of shares, capital contributions, capital contribution rights, rights to purchase shares, and rights to purchase capital contributions in innovative start-up enterprises;
- Individuals who are experts or scientists are entitled to tax exemption on income from salaries and wages received from innovative start-up enterprises, research and development centers, and intermediary organizations supporting innovative start-ups for the following period:
- 100% exemption for 02 years (i.e., 24 consecutive months); and
- 50% reduction of tax payable for the following 04 years (i.e., 48 consecutive months).
2. Support for science, technology, and innovation
Decree 20 provides support policies for science, technology, and innovation for enterprises as follows:
- Establishment of a science, technology, and innovation development fund: enterprises may appropriate up to 20% of their CIT taxable income to establish a fund for science, technology, innovation, and digital transformation.
- Expenses deductible when determining CIT taxable income:
- Training and retraining expenses incurred by large enterprises for small and medium-sized enterprises participating in the supply chain; and
- Expenses for research and development activities of enterprises may be calculated at 200% of the actual expenses incurred, subject to satisfaction of the conditions prescribed by laws on science, technology, and innovation.
II. Foreign investment mechanisms and incentives
On 31 March 2026, the Government issued Decree No. 96/2026/ND-CP (“Decree 96”), providing detailed regulations and guidance on the implementation of certain provisions of the Law on Investment. Decree 96 took effect on 31 March 2026 and replaced Decree No. 31/2021/ND-CP. Decree 96 introduces several noteworthy changes relating to investment conditions and market access conditions applicable to foreign investors, including the following:
1. Establishment of an enterprise prior to the issuance of the Investment Registration Certificate (“IRC”)
One of the most significant changes introduced by Decree 96 is that foreign investors are permitted to establish an economic organization before obtaining an IRC in certain cases as prescribed under the Law on Investment 2025. Accordingly, following the establishment of the enterprise, the enterprise shall carry out the IRC application procedures in accordance with the investment laws of Vietnam and the relevant international commitments.
This new mechanism is expected to shorten the market entry timeline and provide foreign investors with greater flexibility in implementing their investment projects. However, within 12 months from the date of issuance of the Enterprise Registration Certificate (“ERC”), the enterprise must complete the procedures for obtaining the IRC to implement the investment project. In addition, the enterprise may only amend its enterprise registration contents to add other business lines after the IRC has been granted.
At the same time, the charter capital of the enterprise registered under the ERC is not necessarily required to be equal to the investment capital of the investment project as recorded in the IRC.
2. Regulations on the simplification and streamlining of certain procedures relating to investment activities
Decree 96 clarifies the circumstances in which applications for the issuance or amendment of the IRC may be rejected, including:
- The investor fails to amend, supplement, or provide explanations for the application dossier within the prescribed timeframe as requested by the competent authority;
- The proposed investment project or amendments thereto do not satisfy the applicable legal requirements and conditions; or
- The investor submits its application after the statutory deadline in cases where two or more investors submit valid applications to implement an investment project at the same location.
In addition, Decree 96 relaxes certain requirements relating to evidence of an investor’s financial capacity. Specifically:
- The investor’s financial statements for the most recent 02 years are no longer required to be audited; and
- No specific validity period is prescribed for financial support commitments.
3. Expansion of investment incentive beneficiaries
Decree 96 expands the categories of projects and entities eligible for investment incentives, including:
- Investment projects operating in sectors entitled to investment incentives or special investment incentives as set out in Appendix II of Decree 96, including:
- The manufacture of pharmaceutical ingredients and plant protection products, including pesticides; the prevention and treatment of diseases in animals and aquatic species; and
- The manufacture of environmental industry equipment and products included in the list of technologies, equipment, and products of the environmental industry promulgated by the Prime Minister.
- Investment projects located in areas with difficult socio-economic conditions or exceptionally difficult socio-economic conditions.
- Investment projects with an investment capital of VND 6,000 billion or more, provided that all of the following conditions are satisfied:
- At least VND 6,000 billion is disbursed within 03 years from the date of issuance of the IRC or the approval in principle for the investment project;
- The project generates annual revenue of at least VND 10,000 billion no later than 03 years from the first year in which revenue is generated; and
- The project employs an average of at least 3,000 regular employees per year in accordance with labor laws, no later than 03 years from the first year in which revenue is generated.
- Enterprises, organizations, and establishments operating in the fields of high technology, science and technology, strategic technologies, research and development (R&D), technology transfer, technology incubation, or environmental protection, subject to the applicable conditions prescribed by law.
III. Regulations on the APEC business travel card
On 29 May 2026, the Prime Minister issued Decision No. 28/2026/QD-TTg on the procedures, authority for issuance, and management of the APEC business travel card (“Decision 28”), which takes effect from 01 July 2026, with key notable contents include:
1. Key essentials of the APEC business travel card
APEC stands for Asia-Pacific Economic Cooperation. APEC currently comprises 21 member economies, including major economies such as the United States, China, Japan, Russia, Australia, Canada, and Vietnam, which officially joined in 1998.
According to Article 2.1 of Decision 28, the APEC Business Travel Card (“ABTC”) is a card issued to businesspersons that allows holders to enter APEC member economies without visa requirements. According to Articles 4 and 5 of Decision 28, the ABTC contains personal and passport information of the holder, as well as the list of APEC member economies that have granted entry clearance. The ABTC is valid for a maximum of 05 years from the date of approval by the system of APEC member economies; shall not exceed the validity period of the passport; and is non-renewable.
2. Key prerequisites for ABTC issuance consideration
According to Article 8 of Decision 28, in order to be considered for ABTC issuance, the applicant must satisfy the following conditions, including:
- For the agency or organization where the businessperson is working: There must be a demand to dispatch the businessperson for short-term travel to APEC member economies to perform duties of the agency or organization, or to attend conferences, seminars, and meetings.
- For the enterprise where the businessperson is working:
- Having operated continuously for 24 months or more, and properly complying with relevant legal regulations at the time of application; and
- Having a demand to dispatch the businessperson for short-term travel to APEC member economies to conduct the enterprise’s business activities.
- For businesspersons applying for an ABTC:
- Being from full 18 years of age or older, possessing full civil capacity, and having permanent residence registration in Vietnam, except for exceptional cases;
- Having worked at the applying agency, organization, or enterprise for 12 months or more up to the time of application for ABTC;
- Participating in social insurance contributions at the applying agency, organization, or enterprise in accordance with the position nominated for ABTC issuance for 06 months or more, except for exceptional cases; and
- Not falling under any cases of being temporarily suspended from exit under the law.
The eligible subjects for ABTC issuance consideration are specified in Article 9 of Decision 28, including:
- Businesspersons working at enterprises where the State holds more than 50% of the charter capital or total voting shares, including: businesspersons holding high-ranking positions under the law who work at credit institutions, or enterprises operating in fields such as finance, securities, insurance, etc.;
- Businesspersons working at organizations or enterprises where the State does not hold capital or holds less than 50% of the charter capital or total voting shares, including: businesspersons holding high-ranking positions under the law who work at credit institutions, organizations operating in fields such as finance, securities, insurance, or working at the Vietnam Chamber of Commerce and Industry, cooperatives, or cooperative unions, etc.;
- Officials and public employees assigned to attend conferences, seminars, meetings, and activities regarding APEC cooperation and economic development; and
- Chief Representatives and Deputy Chief Representatives of Vietnamese trade representative offices in APEC member economies.
The above is not official advice from BLawyers Vietnam. If you have any questions or suggestions about the above, please contact us at info@blawyersvn.com. We would love to hear from you.
Date: 25 June 2026
Writer: BLawyers Vietnam
Legal News and Update Team
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Maybe you are interested in reading other Newsletters of BLawyers Vietnam: Legal Newsletter in February 2026/ Legal Newsletter in March 2026/ Legal Newsletter in April 2026
