Vietnam Plans Special Policies for Private Sector: Tax Incentives and Barrier Removals

On May 17, 2025, Vietnam introduced two resolutions that outline special mechanisms and policies to promote the development of the private sector, accompanied by an implementation plan aimed at relevant authorities. These measures reflect the government’s strong focus on tax incentives and administrative support to enhance innovation and business growth.

In early May 2025, Vietnam achieved a historic milestone in its economic reforms with the adoption of Resolution 68-NG/TW (“Resolution 68”), which establishes the private sector as the primary driver of the national economy. This directive also serves as a framework for subsequent implementation plans and executions.

Resolution 68 primarily aims to address significant obstacles to the growth of Vietnam’s private sector. This includes reforming institutions and policies, safeguarding ownership and property rights, ensuring business freedom, promoting fair competition for the private economy, and guaranteeing the enforcement of private contracts. To tackle these challenges, Vietnam’s government has introduced two follow-up directives that guide the implementation of incentives for private economic development, including:

FIND BUSINESS SUPPORT

Identify Business Risks with Entity Health Checks and Partner Review Services

• Resolution No. 198/2025/QH14 (“Resolution 198”), approved by the National Assembly on May 17, 2025, on special mechanisms and policies for private economic development; and
• Resolution No. 139/NQ-CP (“Resolution 139”), dated May 17, 2025, detailing the Government’s plan to implement Resolution 198.

Notably, Vietnam’s Prime Minister has acknowledged Resolution 139 as a vital instrument that provides clear directions for relevant ministries and agencies in executing the national vision outlined under Resolution 198.

This article examines highlights from the dual resolutions, thus identifying the key incentives for businesses and investors and their expected rollout plans.

Tax and fee incentives

Resolution 198 outlines essential tax and fee incentives aimed at fostering the private sector’s growth, particularly for startups and small to medium enterprises (SMEs), with specific implementations detailed in Resolution 139. The incentives include:

• Corporate Income Tax (CIT) exemptions for a maximum of 2 years, followed by a 50 percent reduction in CIT for the next 4 years, targeting innovative startups and funds aiding innovation;
• Personal Income Tax (PIT) exemptions on capital gains and income for experts working in innovative startups and R&D centers for up to 2 years, with an additional 50 percent reduction for the following 4 years;

FIND BUSINESS SUPPORT

We help companies expertly navigate Asia’s corporate, indirect, individual, international tax, and transfer pricing domains.

• A 3-year CIT exemption for newly registered SMEs starting from the date of registration;
• Allowing larger enterprises to deduct training expenses incurred in support of SMEs within their supply chains;
• The removal of business license tax starting January 2026, aimed at cutting down administrative burdens; and
• Fee waivers for reissuing certificates and permits during times of administrative restructuring.

Land access support for production and business

Under Resolution 139, competent authorities are required to modify and enhance all pertinent regulatory documents to facilitate access to land, business premises, production sites, housing rentals, and public properties. These reforms will introduce significant incentives:

• Reserve local land funds for industrial park infrastructure: Assign local areas to allocate a minimum of 20 hectares per industrial park or 5 percent of the total land fund invested in industrial park infrastructure for leasing to high-tech firms, small and medium-sized enterprises, and innovative startups, targeted for completion by 2025;
• Reduction in land rental fees: High-tech firms in the private sector, small and medium enterprises, and innovative startups will benefit from at least a 30 percent decrease in land rental fees within the first five years following the signing of the land lease contract for infrastructure projects in industrial parks, industrial clusters, and technology incubators; and
• Streamlining administrative procedures: Implement comprehensive digital transformation to offer online public services throughout the land administration procedure process, cutting down at least 30 percent of the time needed to process land lease applications and issue land use proper certificates to individuals and businesses.

Financial and credit support

The Government has designated competent authorities to create and submit documents aimed at providing financial and credit support for private enterprises, business households, and individual entrepreneurs seeking funding for green and circular initiatives. This support also includes assistance in adopting the environmental, social, and governance (ESG) standards framework, with an anticipated completion by 2025. The incentives consist of:

• A policy that supports an interest rate of 2 percent annually via the commercial banking system; and
• A policy that supports an interest rate of 2 percent per year through non-budgetary state financial funds.

Removing at least 30 percent of business barriers by December 31, 2025

Vietnam’s government designates December 31, 2025, as the deadline to conclude the review and elimination of unnecessary business conditions, overlapping and inappropriate regulations that hinder the development of private enterprises. The target is to remove at least 30 percent of administrative procedure processing time and legal compliance costs before the deadline, then continue with further necessary cuts in the following years.

Punishing the abuse of inspections to harass businesses

FIND BUSINESS SUPPORT

Advance Your China + 1 Asia Manufacturing Strategy with Tailored Business Intelligence

Under Resolution 139, the Vietnamese government directs relevant authorities to review and classify inspection subjects to eliminate overlapping, duplicate, and lengthy inspections. Inspections at enterprises, business households, and individual businesses, including inter-sectoral inspections, must not exceed once a year, except in cases where a surprise inspection is needed due to clear signs of violations.

If inspection activities are conducted for the duplicate state management content, there must be no further inspections taking place at that entity in the same year unless there are evident signs of violations.

The abuse of inspections to harass and cause difficulties for businesses will be strictly handled.

Specific task assignments

Specific tasks are assigned to capable ministries and agencies, with key responsibilities distributed as follows:

• The Ministry of Public Security is tasked with completing the draft decree that guides the Law on Data to improve data sharing and facilitate online and remote inspection activities by 2025;
• The Ministry of Finance is responsible for reviewing and reducing the conditional business lines outlined in the Investment Law by December 31, 2026;
• The Ministry of Industry and Trade must enhance the efficiency of the National Competition Commission and amend Decree No. 75/2019/ND-CP to effectively tackle violations of competition law, particularly favoritism and monopoly issues by 2025. ;
• The Ministry of Home Affairs will clarify leadership accountability and mechanisms to exempt liability for those suffering losses due to objective risks under the Law on Cadres and Civil Servants, which is scheduled for completion by 2025-2026;
• The Ministry of Justice will review the Law on Handling of Administrative Violations and its guiding documents between 2026 and 2027. Additionally, it will collaborate with the Supreme People’s Court and the Supreme People’s Procuracy to amend the Bankruptcy Law, with the goal of shortening legal procedures, broadening simplified bankruptcy penalties, and reforming asset management;
• The Ministry of Agriculture and Environment is urgently working on reviewing, amending, and supplementing land law to ensure full compliance with Resolutions 68 and 198, targeted for completion by 2025-2026; and
• The Government Inspectorate will revise the Law on Inspection to enhance electronic and digital oversight.

Also read: Vietnam’s Government Restructuring: Updates on Conclusion 127

Conclusion

Vietnam’s recent adoption of Resolutions 198 and 139 marks a significant step toward empowering the private sector as a vital contributor to economic growth. Businesses are encouraged to closely monitor these incentives’ official implementations through the expected policy updates this year.

• Previous Article Stuck in Vietnam? A Guide to Exit Delays Over Tax Obligations
• Next Article Vietnam to Safeguard Agricultural Production and Exports Amid Global Trade Uncertainties