The 2025 Law on Digital Transformation and the 2025 Law on High Technology officially came into effect on July 1, 2026, marking a significant milestone in strengthening Vietnam's institutional framework for the development of a digital nation. These two laws not only provide a solid foundation for advancing digital government, the digital economy, and the digital society, but also introduce a range of new mechanisms to foster high technologies, strategic technologies, and enhance the country's technological self-reliance and innovation capacity.
For the First Time, Vietnam Establishes a Comprehensive Legal Framework for Digital Transformation
A key highlight of the Law on Digital Transformation is that it provides, for the first time, a comprehensive legal framework governing the digital transformation of government agencies, organizations, businesses, and citizens. The Law consists of 8 chapters and 48 articles, setting out the fundamental principles, policies, national coordination mechanisms, and measures to support digital transformation, while promoting the development of digital government, the digital economy, and the digital society, and defining the responsibilities of all relevant stakeholders.
One of the Law's most significant innovations is the requirement that digital systems ensure consistency, interoperability, seamless integration, and the capability to connect and share data. The development of digital systems, platforms, databases, and digital services must comply with the National Digital Architecture Framework, the National Data Architecture Framework, and the National Data Governance and Management Framework.
In addition, the Law specifies five categories of prohibited acts aimed at preventing the sabotage of, or unauthorized interference with, digital systems, data, and digital platforms; the unlawful exploitation of data; and the misuse of digital technologies for fraud, unlawful gain, or the creation of monopolies, market fragmentation, or anti-competitive practices.
Notably, the Government guarantees an annual allocation of at least 1% of the total state budget expenditure for digital transformation, within the broader commitment that at least 3% of the total state budget expenditure be dedicated to science, technology, innovation, and digital transformation. This funding commitment provides an important foundation for implementing digital transformation initiatives in a more stable, coordinated, and sustainable manner in the years ahead.
The 2025 Law on Digital Transformation, which took effect on July 1, 2026, establishes, for the first time, a unified legal framework for the development of digital government, the digital economy, and the digital society.
The Law also specifies five categories of prohibited acts to prevent the sabotage of, or unauthorized interference with, digital systems, data, and digital platforms; the unlawful exploitation of data; and the misuse of digital technologies for fraud, unlawful gain, or the creation of monopolies, market fragmentation, and anti-competitive practices. In addition, it defines eight key areas of state management, covering policy and legislation development, technical standards, governance and supervision, performance measurement, inspection and enforcement, handling of violations, digital workforce development, and international cooperation.
Notably, the Government guarantees an annual allocation of at least 1% of total state budget expenditure for digital transformation, within the broader commitment that no less than 3% of the total state budget be allocated to science, technology, innovation, and digital transformation. This financial commitment provides a solid foundation for implementing digital transformation initiatives in a more stable, coordinated, and sustainable manner in the years ahead.
Promoting R&D Investment and Core Technology Transfer
A major highlight of the 2025 Law on High Technology is that it formally codifies, for the first time, the concepts of strategic technologies, core technologies, strategic technology products, and strategic technology enterprises. These technologies are recognized as transformative technologies with broad spillover effects that enhance national technological self-reliance, strengthen long-term competitiveness, and safeguard national defense and security.
The Law introduces new incentives to encourage domestic enterprises, small and medium-sized enterprises (SMEs), and innovative start-ups to invest in, conduct research on, and commercialize high technologies. Research institutes and universities engaged in research and development (R&D) are also encouraged to establish high-tech enterprises and accelerate the commercialization of research outcomes.
With regard to foreign direct investment (FDI), the Law gives priority to investment projects that involve the transfer of core technologies and foster collaboration with domestic enterprises to strengthen Vietnam's technological capabilities. This approach aims to shift the focus of FDI attraction away from outdated technologies and low-cost labor advantages toward innovation-driven, high-value investment.
The amended Law on High Technology, which came into effect on July 1, 2026, introduces new mechanisms to promote R&D investment, the transfer of core technologies, and the development of strategic technologies.
Another notable feature of the Law is the classification of high-tech enterprises into two preferential categories. Category 1 high-tech enterprises are entitled to the highest level of incentives, including a four-year corporate income tax exemption, a 50% tax reduction for the following nine years, and a preferential corporate income tax rate of 10% for 15 years. To qualify, enterprises must demonstrate substantial investment in R&D, with annual R&D expenditure in Vietnam amounting to at least 1% of net revenue after deducting input costs.
The Law also abolishes the High-Tech Enterprise Certificate, replacing it with a self-assessment mechanism based on prescribed eligibility criteria, thereby reducing administrative procedures and compliance costs. In addition, it introduces the concept of high-tech cities, which serve as dedicated hubs for research, development, testing, and the application of high technologies, while supporting sustainable urban development.
Src: mst.gov.vn
