Unlocking Economic Velocity for the Private Sector

The National Assembly’s recent adoption of Resolution 198/2025/QH15 marks a pivotal moment for Vietnam’s private sector and innovative enterprises, opening doors to a world of opportunities and growth.

Resolution 198/2025/QH15 signifies a significant shift in the government’s approach towards the private sector, reflecting a more progressive and supportive mindset.

This Resolution is more than just a financial incentive package; it’s a testament to the State’s dedication to creating a conducive and transparent business environment. With a range of tax breaks, fee reductions, and support for science and technology development, the Resolution lays the foundation for sustainable growth and Vietnam’s deeper integration into the global economy.

The private sector, once considered a supplementary element, is now recognized as a vital pillar of Vietnam’s market economy. To materialize this vision, tax policies have been strategically employed as a catalyst for relief, accumulation, innovation, and expansion.

One of the Resolution’s standout features is the reduction of land rental fees for high-tech enterprises, SMEs, and innovative startups in industrial zones, clusters, and incubators. This 30% discount for the first five years aims to alleviate financial burdens, empowering companies to scale up, invest in equipment, and boost productivity.

The waiver of business license fees from 2026 onwards, coupled with the exemption of fees during government restructuring, further reduces the cost of doing business. These practical reforms streamline administrative processes, allowing businesses to focus on their core competencies and commercial activities.

Breakthrough tax incentives are also offered to innovative enterprises, which are poised to drive Vietnam’s digital economy and technological transformation. Full corporate income tax exemptions for the first two years, followed by a 50% reduction for the next four, apply to startups and their supporting organizations. Additionally, income from share transfers or capital contributions by these startups is exempt from personal and corporate income tax, creating an attractive investment environment.

The Resolution also targets experts and scientists with tax breaks: a two-year personal income tax exemption, followed by a 50% reduction for the next four. This incentive is designed to attract top talent and specialists, enhancing R&D capabilities and accelerating the commercialization of high-tech products.

Another positive aspect is the allowance for businesses to allocate up to 20% of taxable income to funds for science, technology, innovation, and digital transformation. Moreover, companies can deduct 200% of R&D expenses when calculating corporate income tax, incentivizing increased investment in R&D and the creation of high-value products and technologies. This enhances Vietnam’s global competitiveness.

Furthermore, the State extends its support to micro and small enterprises, as well as individual business households, by offering free access to digital platforms, shared accounting software, and consulting services. These initiatives reduce costs, improve governance, and accelerate the digital transformation journey for these businesses.

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