The enactment of the amended Law on High Technology in 2025 (“LHT 2025”), which was passed by the National Assembly at the end of 2025 and set to officially take effect from July 1, 2026, is not merely a legislative technical update of its 2008 predecessor. Rather, it represents a landmark normative legal instrument that profoundly institutionalizes the strategic resolutions of the Party and the State adopted during the 2024 – 2025 period, most notably Resolution No. 57-NQ/TW (“Resolution 57”) of the Politburo on breakthroughs in the development of science and technology, innovation, and national digital transformation. Compared to the LHT 2008, the LHT 2025 introduces several notable new provisions, including the following:

1. Definitions of Strategic Technology and Strategic Industry

A notable shift in the LHT 2025 is the establishment of the concept of “strategic technology” alongside the traditional concept of high technology. While in the previous period, our country focused on attracting advanced technology in general to modernize production, in the context of the volatile global geopolitical and economic landscape of recent years, Vietnam has clearly recognized that technological independence is the foundation of national autonomy. Strategic technology is defined as breakthrough technologies with strong spillover effects that play a pivotal role in enhancing technological autonomy, creating national competitive advantages, and especially ensuring national defense and security while promoting sustainable socio-economic development[1]. The concept of “strategic industry” has also been introduced, defined as the manufacturing and service sectors based on strategic technology[2].

This regulation aligns with the recent strategic orientation of the Party and State regarding the mastery of core technologies and the development of key technologies[3]. According to the perspective in Resolution 57, the Politburo identifies the science and technology revolution, innovation, and digital transformation as strategic breakthroughs, requiring the grasp and mastery of “strategic technologies” to enhance autonomy and proactive international integration. The LHT 2025 clearly stipulates that the criteria for identifying strategic technology must include the capacity to be formed from research by domestic organizations and individuals, or the capacity for localization and substantive mastery of the production process within Vietnam[4].

On that basis, on June 12, 2025, the Government issued Decision No. 1131/QD-TTg approving the List of strategic technologies, which is categorized into 11 key technology groups and 35 national strategic products, reflecting the Government’s absolute priority for high-value-added technology sectors with global influence. Integrating these technologies into a “strategic” legal framework allows the State to apply sandbox to facilitate innovation without being bound by conventional administrative regulations.

2. Synchronization with the Digital Technology Industry Law 2025 (“LDTI 2025”)

Another highlight in the formulation of the LHT 2025 is its close synchronization with the LDTI 2025. The LDTI stipulates special incentive policies for pivotal sectors such as semiconductor development, artificial intelligence (“AI”), and software, aimed at “strongly fostering national endogenous capacity” and the “Vietnam semiconductor ecosystem”.

For instance, semiconductor chip products or AI solutions, when researched within high-tech parks, will enjoy the research incentive standards of the LHT 2025 ⁶. However, once these products enter industrial-scale production and export, the mechanisms regarding customs, personal income tax (“PIT”) for high-quality human resources, and regulations on concentrated digital technology zones will be governed by the LDTI 2025. This coordination helps enterprises avoid the burden of seeking certifications from multiple ministries and agencies, while simultaneously optimizing support resources from the state budget.

Both the LHT 2025 and the LDTI 2025 prioritize the concentration of resources and provide high incentives for spearhead technology sectors, reflecting policy interconnectivity, both laws emphasize attracting high-quality investment coupled with technology transfer, and grant incentives related to taxation, land, and credit for strategic projects (such as stipulating the highest level of tax and investment incentives for high-tech and strategic technology enterprises). This demonstrates that the new LHT 2025 not only continues the “Make in Vietnam 2025” vision regarding technological autonomy but also aligns with new specialized laws to drive technological breakthroughs for economic growth.

3. Criteria for Identifying Strategic Technology

Compared to the LHT 2008, the LHT 2025 introduces an entirely new set of criteria for strategic technology. Previously, the LHT 2008 only stipulated criteria for “high technologies prioritized for development investment”[5] and lacked a “strategic” conceptual framework (focusing merely on key technological sectors); this concept was later supplemented by Article 71.1 of the Law on Science, Technology, and Innovation 2025. While the LHT 2025 retains the existing criteria for high technology and incorporates the digital technology sector[6], it also introduces mandatory criteria for strategic technology, including:

• Breakthrough impact on socio-economic development;
• Creation of long-term national competitive advantages;
• Capacity to form new production methods, new industries, and new value chains:
• And most importantly, the ability to be derived from core technologies researched and mastered by domestic organizations and individuals to create strategic products.

This final criterion emphasizes that technological development must be intrinsically linked to the enhancement of Vietnam’s autonomous capacity. The rationale for these additional criteria stems from the current imperative to strengthen localization and technological autonomy. The LHT 2025 proactively prioritizes technologies with a domestic core foundation to meet the demands of the digital economy and Industry 4.0, while providing practical support for key Government programs and universities focusing on core technology sectors.

Consequently, the LHT 2025 clearly distinguishes between two groups: (i) “Prioritized high technologies” (as per the former Law), which only need to satisfy criteria regarding their role, absorption, mastery, and localization; (ii) “Strategic technologies”, which must meet additional criteria to ensure breakthrough potential and long-term autonomy. The LHT 2025 also stipulates under Article 5.3 that the Ministry of Science and Technology (“MOST”) shall preside over the formulation and periodic update of the List of prioritized high technologies and the List of strategic technologies and Strategic Products, while inheriting Decision No. 38/2020/QĐ-TTg regarding the list of prioritized high-tech products.

4. Classification of High-Tech Enterprises and Incentive Policies

The LHT 2025 has revolutionized the approach to corporate incentives by introducing a clearer hierarchical enterprise system to apply differentiated incentives. According to Article 15, there are three categories: (i) Enterprises manufacturing high-tech products (per the priority list); (ii) High-tech enterprises (engaged in both R&D and high-tech manufacturing/services); and (iii) Strategic technology enterprises. Furthermore, the LHT 2025 explicitly categorizes these into two groups based on their actual economic contribution and endogenous technological capacity[7]. Instead of spreading incentives thinly across all entities under the “high-tech” label, the LHT 2025 concentrates resources on entities capable of generating high added value within Vietnam.

• Criteria for Group 1 and Group 2 Enterprises

Pursuant to Article 15 of the LHT 2025, the categorization is regulated based on quantitative indicators regarding localization rates and the level of investment in the future through R&D.

Enterprise Group	Criteria for R&D and Localization	Policy Objectives
Group 1	Localization rate meets the minimum requirement for each specific industry; commitment to R&D expenditure in Vietnam ≥ 1% of annual net revenue. (Article 15.4)	To encourage enterprises to establish long-term commitments, build domestic supply chains, and master core technologies.
Group 2	Meets the technical criteria for high-tech products but has not yet reached the localization threshold or the R&D expenditure level of Group 1. (Article 15.5)	To create a stepping stone for newly established enterprises or FDI projects currently in the technology transfer stage.

According to Article 15.6, strategic technology enterprises must satisfy requirements regarding the ownership of core technology within the country and a domestic capital ratio of 51% or higher (except for special cases), as well as meet general criteria for revenue, R&D, and localization.

This stratification allows for the determination of incentive levels commensurate with the degree of an enterprise’s “technological proactivity”. Enterprises in higher tiers (Group 1 or Strategic) will enjoy the highest incentives regarding taxation and investment; conversely, Group 2 enterprises or those engaged solely in assembly without R&D will find it difficult to access significant incentives. This differentiation demonstrates that the State is not only supporting output (the products) but is also focusing on supporting input (the creative process). Furthermore, this categorization transparentizes the criteria – such as localization rates and R&D expenditures – enabling enterprises to self-assess their eligibility and creating a database for performance evaluation.

• Expanded Incentive Policies

The LHT 2025 significantly strengthens incentives for R&D activities and the transfer of high-tech and strategic technologies. Specifically:

Firstly, enhancing R&D incentives: Organizations and individuals conducting high-tech R&D are entitled to a wide range of incentives (consideration for funding from national science and technology programs and research funds; the highest levels of Corporate Income Tax (“CIT”) and PIT incentives; support for training, intellectual property protection, and access to shared laboratories, etc.). There are specific regulations regarding support for High-Tech R&D Centers; accordingly, if R&D criteria are met, these centers shall enjoy the highest incentives concerning investment, taxation, land, and related policies[8]. Similarly, pursuant to Article 12, Strategic Technology R&D Centers are also entitled to the highest incentives upon meeting R&D standards, including research for deciphering and mastering strategic technologies. Article 25.6 stipulates that science and technology enterprises and innovation centers are exempt from import duties on raw materials and supplies directly serving R&D activities for a period of 05 years[9].  The fact that the LHT 2025 increases incentive levels for high-tech and strategic research, provides tax exemptions, and emphasizes that R&D centers enjoy the highest incentives based on human resources and R&D capacity criteria demonstrates that the State is granting maximum priority in terms of capital, tax, and land to entities truly investing in high-tech R&D.

Secondly, promoting technology transfer and acquisition: The LHT 2025 continues to encourage high-tech transfer with an orientation toward localization goals. According to Article 19, the State encourages organizations to engage in mergers and acquisitions (“M&A”), and joint ventures with foreign enterprises holding core and strategic technologies. These activities are supported through technology appraisal, legal consultancy, and tax incentives on the value of the acquired technology. This is a new regulation aimed at fostering deeper participation of FDI enterprises in the technology value chain. Detailed policies on preferential tax rates have also been expanded: the LHT 2025 stipulates a preferential CIT rate of 10% for 25 years for strategic technology enterprises, Strategic Technology R&D Centers, and High-Tech R&D Centers[10].

Thirdly, high-tech “deciphering”: A major advantage of the LHT 2025 is the expansion of the research scope to include technology deciphering, as well as the mastery and improvement of high/strategic technologies. Article 12 clearly stipulates that strategic technology R&D activities encompass “research for deciphering, mastering, improving, and perfecting strategic technologies”. These activities are entitled to specific policies (for instance, the special mechanism for technology deciphering and the acquisition of technology copyrights under Article 31 of the Law on Science, Technology, and Innovation 2025). This is a crucial addition compared to the previous law, enabling enterprises to absorb and master foreign technologies in alignment with the orientation of strengthening technological endogenous capacity. Consequently, the LHT 2025 establishes the legal framework for enterprises to acquire technology, implement improvements, and move progressively toward self-reliance.

Fourthly, the startup ecosystem and technical infrastructure: Article 20 of the LHT 2025 clearly stipulates the components of the high-tech ecosystem, including promotion and consultancy centers, technology exchange floors, incubators, innovation centers, and shared laboratories for both high and strategic technologies. Notably, Article 21 expands the scope of entities entitled to State support and incentives to include incubators and innovation centers, while providing a formal definition for “high-tech/strategic technology startups” that meet statutory criteria. Compared to the LHT 2008, which only briefly mentioned “high-tech incubation”, the current legal institutions for startup support are significantly more emphasized. The LHT 2025 stipulates that the State prioritizes the allocation of investment capital for infrastructure serving R&D and incubation (such as high-tech parks, strategic R&D centers, and national laboratories), as well as implementing Public-Private Partnership (PPP) mechanisms for these endeavors.

Fifthly, regarding land policies: Enterprises shall receive a minimum land rent reduction of 30% for the first five (05) years to support developers of industrial park infrastructure, industrial clusters, and technology incubators. This is based on the requirement that these developers reserve a portion of the developed land fund for lease by high-tech enterprises, small and medium-sized enterprises (“SMEs”), and innovative startups. In particular, projects constructing technical infrastructure for R&D, technology incubation, or housing for experts shall be exempt from land use fees or benefit from specially preferential pricing to reduce fixed costs for investors.

Nevertheless, these policies also pose significant challenges for SMEs. A major risk that must be recognized is the widening development gap between large corporations and SMEs. The criteria for “strategic technology enterprises” – requiring a domestic capital contribution of at least 51% and ownership of core technology – appear to grant an absolute advantage to large corporations. These entities possess the financial capacity to maintain R&D expenditure at ≥1% of net revenue, as well as robust personnel, legal, and infrastructure teams to swiftly adapt to the current continuous digital and regulatory transformation. SMEs, characterized by thin capital and limited R&D capabilities, require more tailored support policies to enable their participation in the supply chains of “strategic enterprises”. While focusing tax and land incentives on Group 1 enterprises positively drives large firms to contribute and grow further, it simultaneously carries the risk of creating “prerogatives” for already powerful entities, thereby increasing inequality in accessing national resources. The ultimate risk is that the chasm between large-scale and small-scale business sectors will continue to widen, potentially undermining the overall technological ecosystem.

5. Development of High-Tech Ecosystems and Infrastructure

The LHT 2025 expands the regulatory scope regarding the high-tech ecosystem compared to the previous Law. Fundamentally, both laws emphasize high-tech parks and hi-tech agricultural zones (Articles 31 and 32 of the LHT 2008 already stipulate infrastructure investment and special incentives for these zones). The LHT 2025 retains these and provides additional details on digital technology zones and high-tech urban areas. These are new models; for instance, a “high-tech urban area” is defined as requiring, in addition to standard urban requirements, a high-tech park (or a research zone) at its core, with integrated digital, technical, and social infrastructure[11]. The LHT 2025 also stipulates that the State prioritizes investment in technical infrastructure for high-tech parks, high-tech urban areas, and specialized research laboratories. These contents reflect international trends in developing tech-urban and smart city models, demonstrating synchronization with other legislations such as the Law on Urban and Rural Planning 2024, Decree No. 269/2025/ND-CP on smart urban development, and the Law on Science, Technology, and Innovation 2025.

6. Decentralization and Local Responsibility

Under Article 20.6 of the LHT 2025, provincial people’s committees are now empowered to establish, adjust, and expand high-tech parks (a power formerly reserved for the Prime Minister) and are responsible for ensuring land funds, site clearance, and investing in technical infrastructure connections for local high-tech/strategic projects. Consequently, the LHT 2025 has “streamlined” the approval process, allowing local authorities to be more proactive in planning and investment promotion. This provides greater flexibility for expanding or establishing new high-tech zones based on local demand. In return, localities must guarantee resources for land allocation, infrastructure construction, and support for the development of high-tech ecosystems – a task requiring significant planning capacity and resource mobilization. While this decentralization is a breakthrough, it raises questions regarding the capacity and budgetary commitment of various provinces. Unlike the previous Law, which only assigned general responsibilities to People’s Committees, the LHT 2025 is far more specific, thus, it is crucial to monitor local authorities’ ability to balance budgets to fulfill these new mandates while meeting societal needs.

However, challenges remain regarding the readiness and expertise of local officials. Comprehensive decentralization poses immense challenges to the local administrative apparatus. Without specialized intensive training and the standardization of interdisciplinary coordination processes, “bottlenecks” may simply shift from the MOST to provincial Departments and agencies.

7. National Program on Science, Technology and Innovation for the Development of Strategic Technology Products under Decision No. 2815/QĐ-TTg (“Decision 2815”)

Decision 2815 dated 28 December 2025 of the Prime Minister approving the “National Program on Science, Technology and Innovation for the Development of Strategic Technology Products with Immediate Implementation Priority” (the “Program”) translates the incentive mechanisms, support measures, and development orientations set out in the LHT 2025 into a concrete implementation phase. In doing so, it establishes a direct policy bridge between LHT 2025 and the practical deployment of strategic technology products.

Under Section II on objectives through 2030, the Program is closely aligned with the list of strategic technologies approved under Decision No. 1131/QĐ-TTg dated June 12, 2025, demonstrating policy continuity from the identification of priority technologies to funding, commissioning, and commercialization. The establishment of targets to support at least 30 enterprises and 10 research institutes and universities engaged in research and development, while concurrently forming a network of at least 100 supporting enterprises and a minimum of three (03) strategic industries, reflects a clear orientation toward building a technology ecosystem and a domestic supply chain. Nevertheless, in the absence of clearly segmented resource-allocation mechanisms, this policy framework risks increasing the concentration of benefits among a limited group of large enterprises, thereby diminishing its spillover effects SMEs.

Decision 2815 specifically identifies the “Strategic Technology Products” eligible for preferential mechanisms under the LHT 2025. Accordingly, the Program concentrates national resources on six (06) core product groups, namely[12]:

• large language models and Vietnamese-language virtual assistants;
• edge-processing AI cameras;
• autonomous mobile robots;
• 5G network equipment systems;
• blockchain infrastructure; and
• advanced-generation semiconductor chips.

This delineation is consistent with the orientation set out in Resolution 57 regarding the selection of technologies capable of “creating long-term national competitive advantages”. However, many of these technologies are inherently dual-use in nature, with the potential to directly affect national defense and security, personal data protection, and digital sovereignty. Therefore, in parallel with development support mechanisms, it is necessary to establish inter-ministerial security review procedures, technology export control mechanisms, and mandatory cybersecurity and data protection standards from the stages of project approval and task acceptance onward.

With regard to evaluation criteria, Decision 2815 sets out specific targets, including: a domestic value-added ratio of at least 60% of the selling price and at least 40% of production costs; mastery of no less than 80% of core technologies; acceptance of intellectual property applications for a minimum of 60% of assigned tasks; and application and commercialization of results for at least 80% of such tasks[13]. This constitutes a positive development from a policy governance perspective, as it provides a basis for the formulation of key performance indicators (KPIs), results-based disbursement, and the assessment of public investment effectiveness. The establishment of such objectives and quantitative indicators demonstrates an important shift from incentive-based policy to results-based governance.

Pursuant to Section VI, the assignment of tasks to develop controlled regulatory experimentation mechanisms (sandboxes), promulgate national standards and national technical regulations, as well as establish mechanisms for data exploitation and sharing, is significant not only in facilitating the testing of new technologies within a risk-controlled environment, but also in standardizing technical requirements and ensuring safety, interoperability, and scalability when such products are commercialized. At the same time, the exploitation of data from the National Data Center and databases of ministries and sectors reflects a shift from fragmented data management toward treating data as a critical input infrastructure for the research and development of strategic technologies. In addition, through diverse forms of support such as interest rate subsidies, financial support vouchers, intellectual property development, and investment and trade promotion, the Program demonstrates its objective of bringing strategic technology products to both domestic and international markets. The State assumes an initial support role in addressing the most significant barriers to innovation, which lie not only in the research phase but also in access to capital, markets, and customers, thereby reducing risks for enterprises in the commercialization of new technologies.

Regarding the implementation funding set out in Section VII, the allocation of a portion of the overall 15% of the state budget expenditure earmarked for science and technology activities to strategic technology research demonstrates a clear priority in resource allocation. At the same time, the mobilization of capital from enterprises, the private sector, and other lawful sources indicates that the Program is designed to combine public and private resources, in line with the characteristics of large-scale and high-risk technology projects. The application of a special expenditure regime allows tasks under the Program to be implemented with a higher degree of flexibility than ordinary science and technology tasks, thereby facilitating the handling of issues arising in the course of research, experimentation, and technology commercialization, which are inherently difficult to fully anticipate at the outset.

The promulgation of the Program has consolidated the incentives and mechanisms already provided for under the LHT 2025 (such as incentives relating to taxation, land use, R&D support, and technology centers), while at the same time emphasizing the requirement for inter-sectoral coordination to ensure the rapid commercialization of research results, the protection of intellectual property, and the development of domestic value chains. However, as analyzed in Section 4.2, in the absence of buffering measures and tailored support for SMEs, the Program risks increasing the concentration of benefits among enterprises that already possess strong financial and technological capacities. Accordingly, it is necessary to prescribe regulatory balancing mechanisms, transparent resource-allocation criteria, and technology transfer support programs in order to ensure the inclusiveness and sustainability of the technology ecosystem.

[1] Article 3.2 LHT 2025

[2] Article 3.11 LHT 2025

[3] Article 3.3 LHT 2025

[4] Article 5 LHT 2025

[5] Article 5 LHT 2008

[6] Article 49.2 LDTI 2025

[7] Article 15 LHT 2025

[8] Article 11.5 LHT 2025

[9] Article 25.6 2025

[10] Article 25.7 LHT 2025

[11] Article 23 LHT 2025

[12] Section III, Decision 2815

[13] Section IV, Decision 2815