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The law, passed by the National Assembly on December 10th, comprises 6 chapters and 27 articles, introducing a series of regulations on high-tech activities, incentive measures, and preferential policies to address many shortcomings, promote innovation, and digital transformation.



A view of Ho Chi Minh City's high-tech zone in December 2019. Photo:  Nhu Quynh.

Adding the concepts of strategic technology and strategic industry:
According to the new law, the State identifies the development of high technology and strategic technology as a breakthrough to help develop the socio-economic sector rapidly and sustainably, ensure national defense and security, and enhance national technological self-reliance. Along with this, the highest levels of incentives regarding taxes, fees, land, and talent attraction are also applied to high-tech and strategic technology activities.
The biggest difference in the amended High-Tech Law lies in the addition of two important concepts: strategic technology and strategic industry. Accordingly, strategic technology is defined as breakthrough, widespread technology that the State identifies as a priority for investment to enhance national self-reliance and competitiveness. Strategic industry is the industry that produces strategic technology products and provides strategic technology services.
This new classification allows the State to concentrate resources on technology groups with long-term impacts on the economy. Unlike ordinary high technology, strategic technology must meet additional criteria such as creating long-term national competitiveness; forming new production methods; and most importantly, the ability to be developed from core technology mastered by Vietnamese people. The law
also clearly distinguishes between high technology, which creates products of superior quality, and strategic technology, which is directly related to national security, defense, and the survival of a self-reliant economy. This separation allows the State to concentrate budget resources and incentives at the highest level for strategic technology groups, instead of spreading them thinly across all high-tech enterprises as before.

Adding criteria for strategic technology

The criteria for identifying high-tech technologies prioritized for investment and development are similar to the old law, but the new law adds criteria for strategic technologies, such as breakthrough socio-economic impact, the formation of new industries, and new value chains.
The list of high-tech technologies and high-tech products is updated periodically, but a list of strategic technologies and strategic technology products is added. International cooperation is expanded, emphasizing attracting investment accompanied by technology transfer, localization, and export of high-tech and strategic technology products.
The old law placed little emphasis on public-private partnerships and controlled testing mechanisms (sandboxes). The new law adds this mechanism for high-tech and strategic technologies. The sandbox regulations create a framework for businesses to test technologies in high-tech zones or high-tech agricultural zones without violating current laws, and are also easier to implement in practice. The new law also reclassifies the system of

high-tech enterprises
. The 2008 law stipulated a single type of high-tech enterprise, but the new law brings these enterprises into a legal system, clearly stratifying them with different levels of incentives. Strategic technology enterprises require ownership or co-ownership of core technology, with a capital contribution ratio of 51% or more from domestic investors (except in special cases decided by the Prime Minister).
High-tech enterprises are classified into two groups: Group 1 and Group 2. Group 1 consists of enterprises producing high-tech products that meet a minimum localization rate and commit to spending at least 1% of net revenue on R&D in Vietnam, while Group 2 includes enterprises that meet the high-tech criteria but have not yet reached the localization thresholds or R&D spending levels of Group 1.

Increased incentives
: With regard to research and development policies, the amended law increases incentives for research activities in high-tech and strategic technologies. The new law stipulates that high-tech and strategic technology research centers are entitled to the highest level of investment, tax, and land incentives if they meet the criteria for human resources and R&D capacity.
Compared to the old law, policies related to research are more detailed, including support for shared laboratories, tax incentives for individuals engaged in R&D, and a mechanism for determining deductible expenses, instead of just general regulations on incentives as in the old law, which made application difficult. In addition, the State encourages organizations and individuals in Vietnam to buy, sell, merge, form joint ventures, and establish partnerships with foreign enterprises holding core and strategic technologies in accordance with the law. These activities are supported by policies regarding technology assessment, legal advice, and tax incentives for the value of the acquired technology, as stipulated by the Government.
The new law expands the scope of research to include technology decoding. This is a significant addition compared to the old law, which focused solely on technology development. Technology decoding helps businesses acquire foreign technology and gradually master it, aligning with the goal of enhancing self-reliance.

Regarding incentives, strategic technology enterprises and Group 1 high-tech enterprises enjoy the highest level of incentives, including a 10% corporate income tax rate for 25 years; exemption from import duties on R&D materials for 5 years for high-tech, strategic technology, and science and technology enterprises; innovative startups, innovation centers, and incubation centers are exempt from proving equity capital capacity in public-private partnership (PPP) projects; and, notably, high-tech and strategic technology products are prioritized in public bidding and procurement. These points represent an expansion from the old law, which only stipulated general incentives without hierarchical prioritization.
According to assessments, the amended High-Tech Law will have a significant impact on technology businesses. Businesses with substantial R&D and mastery of technology will benefit from the grouping mechanism, which allows them access to substantial incentives and priority in bidding, especially for strategic technology products. Foreign direct investment (FDI) businesses wishing to benefit from incentives must commit to technology transfer or establishing R&D operations in Vietnam, forcing them to shift from a processing model to a model of deeper participation in the value chain. For domestic businesses, particularly those producing components and equipment, the law emphasizes localization requirements. If a business meets the criteria for producing high-tech or strategic technology products, it will benefit from tax incentives and have an advantage in bidding.

Conversely, businesses that only assemble or manufacture without R&D will find it difficult to meet the localization and research criteria, thus hindering their access to incentives. FDI enterprises that do not commit to technology transfer will have their rights to preferential treatment restricted and will find it difficult to compete in projects requiring strategic technology.
Research organizations and technology development centers that receive financial and infrastructure support will also benefit, while high-tech personnel will enjoy tax incentives, residency, and training. The new law creates a legal framework for R&D centers, innovation centers, incubation organizations, high-tech startups, high-tech parks, high-tech cities, and high-tech agricultural zones. This linkage helps solve the problem of a lack of testing space and a lack of connection between research institutions, universities, and businesses.

It also increases the power and responsibility of local authorities.
The amended law increases the powers and responsibilities of local authorities. Compared to granting the Prime Minister the authority to establish high-tech zones, this power will be delegated to provincial People's Committees, shortening the approval process and increasing local autonomy. Granting the authority to expand or adjust high-tech zones to the provincial level allows for more flexible planning. In return, local authorities must ensure the allocation of land, the implementation of connecting infrastructure, and the development of a high-tech ecosystem. This is considered a significant difference from the old law, which only assigned general tasks.
For management agencies, decentralization allows localities to proactively develop high-tech zones and high-tech agricultural zones. Provinces and cities with advantages in infrastructure, land resources, and the ability to attract human resources will benefit greatly. However, localities lacking infrastructure and technological human resources may find it difficult to establish high-tech zones according to the new standards. Provincial-level management agencies also bear additional technical responsibilities in evaluating and monitoring high-tech activities.

The law will take effect from July 1, 2026.

According to VnExpress