Vietnam's Digital Technology Industry Law Takes Effect January 2026: A World-First Framework and What It Means for Japanese Businesses

Vietnam's Digital Technology Industry Law takes effect — a world first

On June 14, 2025, Vietnam's 15th National Assembly passed the Law on Digital Technology Industry (Luật Công nghiệp công nghệ số) with 441 of 445 votes in favor (92.26%). The law took effect on January 1, 2026, with a few provisions applying from July 1, 2025. It is the world's first standalone law dedicated exclusively to the digital technology industry.

Comprising 6 chapters and 49 articles, the law covers semiconductors, AI, digital assets, data, and workforce development. It underpins the "Make in Vietnam" initiative and the national goal of 150,000 digital technology enterprises by 2035. Drafted under the Ministry of Science and Technology, it gives legal form to Resolution 57-NQ/TW (science, technology and innovation) and Resolution 68-NQ/TW (private sector development).

Four pillars of the law

1. Investment and tax incentives

• Manufacturing of digital technology products and provision of digital services are designated as investment-incentive sectors (Article 28)
• Startups and SMEs can receive subsidies of up to 50% of the cost of acquiring advanced technology and developing prototypes
• Import duty exemptions for high-tech equipment used in production and R&D
• Tax treatment comparable to specially disadvantaged areas, plus long-term corporate income tax reductions for foreign-invested enterprises (FIEs) that commit to technology transfer and collaboration with domestic firms
• Procurement preferences for domestic digital products in state-budget purchases (Article 31)

2. A strong workforce package

• Five-year personal income tax exemption for qualified Vietnamese digital experts
• Five-year visas and work-permit exemptions for foreign experts
• State funding for curriculum development, certification programs, and upskilling

3. Risk-based AI regulation

AI systems are classified as high-risk and non-high-risk. High-risk applications face strict technical standards, compliance obligations, and oversight; AI-powered products must be clearly labeled, and prohibited uses and ethical standards are defined by law. Japan's AI Promotion Act (enacted May 2025) takes a promotion-first approach, while Vietnam leans more "rules-first" — yet both converge on flexible, risk-based regulation.

4. First legal framework for digital assets and a regulatory sandbox

For the first time, the law distinguishes and defines virtual assets and crypto assets, setting rules on ownership, financial transparency, and consumer protection, with strict supervision against money laundering and illicit finance. A regulatory sandbox lets approved businesses test new technologies under temporary exemptions, and a separate crypto-asset market pilot is underway under Government Resolution 05/2025/NQ-CP.

Decree 353/2025/ND-CP: where incentives get concrete

The implementing decree, No. 353/2025/ND-CP, was issued on December 31, 2025 and took effect on January 1, 2026. Its Article 3 details four groups of support and incentives.

Area	Content	Legal basis
Digital technology products & services	Investment incentives, R&D support, public procurement preferences	Articles 16, 17, 28, 31
Digital technology infrastructure	Priorities and investment support for infrastructure and concentrated digital technology zones	Articles 21, 24
Semiconductors	Special mechanisms for industry development and supply-chain participants	Articles 39, 40
Innovative startups	Comprehensive support for capital, technology, infrastructure, and development environment	Article 29

The law also provides for "concentrated digital technology zones" with favorable fiscal and regulatory policies similar to economic zones, and overseas representative offices to help Vietnamese firms go global.

Why this is a tailwind for Japanese businesses

Japan faces a structural shortage of up to ~790,000 IT workers by 2030 (METI estimate), and its semiconductor revival — Rapidus (2nm, Hokkaido) and TSMC's Kumamoto fab — is accelerating demand for AI and chip-design talent.

Vietnam, meanwhile, has set targets in its national semiconductor strategy (Decision 1018/QD-TTg, September 2024) of 100 chip design companies, one small-scale chip fab, and 10 packaging-and-testing plants by 2030, and Japan–Vietnam cooperation is deepening fast:

• August 2026: leading universities from both countries launched the Vietnam–Japan Semiconductor Talent Initiative to close the gap between industry demand and university training
• Vietnam Japan University began admissions in 2025 for its Engineering of Semiconductor Chip Technology (ESCT) program

Vietnam is already one of the largest offshore development hubs for Japanese companies. With this law, chip design, AI development, and data-center operations become eligible for new incentives, and combined with visa and tax preferences for foreign experts, a dual Japan–Vietnam talent strategy is now far easier to design.

Three-step action list for companies

1. Check eligibility: map your business against Articles 16/17 (R&D), 28 (investment incentives), and 39/40 (semiconductors)
2. Study the implementing rules: confirm application procedures and conditions under Decree 353/2025/ND-CP and follow-up circulars
3. Redesign your talent strategy: combine PIT exemptions and visa preferences with joint Japan–Vietnam training programs in your hiring and deployment plans

The Digital Technology Industry Law is Vietnam's declaration of intent to become a global digital hub. For Japanese companies, 2026 is the moment to rethink investment and talent placement — starting with the incentives you may already qualify for.

Sources

• Vietnam Government Newspaper: Law on Digital Technology Industry approved
• Vietnam Briefing: Vietnam Passes First-Ever Law on Digital Technology Industry
• LuatVietnam: 4 policies on support and incentives effective January 1, 2026 (Decree 353/2025/ND-CP)
• Tia Sáng: Quốc hội thông qua Luật Công nghiệp Công nghệ số
• VietnamNet: Top universities join Vietnam–Japan semiconductor talent initiative
• VNU: Japan cooperation in semiconductor human resource training