Vietnam Leads Global Tech Race with Sweeping New Digital Law

Hanoi green-lights pioneering legislation to foster AI, crypto, and startups, aiming for sustainable digital growth and global tech leadership

 

Vietnam has made a bold stride onto the global technology stage, becoming the first nation worldwide to enact a comprehensive law specifically dedicated to the digital technology industry. 

 

This groundbreaking legislation aims to transform the country into a vibrant hub for AI, cryptocurrencies, and tech innovation.

 

While countries like the US and China boast significant tech advancements, it is Vietnam that has consolidated various digital economy aspects into a single legal framework.

 

This strategic move, outlined in the "National Tech Plan," signals a clear intent to foster a dynamic ecosystem of tech startups, a digitally-skilled workforce, and legally recognised cryptocurrency assets.

 

The ambition extends to establishing cutting-edge tech cities capable of producing chips, servers, and software for global export within the next three to five years.

 

The Digital Technology Industry Law, approved by the 15th National Assembly with an overwhelming 441 out of 445 votes on 14 June, is set to come into force on 1 January 2026.

 

 

A Consolidated Approach

Vietnam's approach stands out for its integrated nature. While elements of the law exist in separate legislation elsewhere, consolidating them into one comprehensive act is expected to simplify management and provide investors and entrepreneurs with a clear operational framework from the outset.
 

The European Union's AI Act, for instance, regulates only artificial intelligence, leaving other digital industries outside its remit.

  

Singapore, an ASEAN leader in digital economic policy, has a Digital Economy Framework and robust Cybersecurity laws, but lacks a central act that links all technology industry development.

The United States relies on distinct laws, with the SEC overseeing cryptocurrencies and NIST guidelines for AI, without an overarching national legal framework.

China's PIPL (personal information) and Cybersecurity Law primarily focus on control rather than promotion.

South Korea has separate master plans and innovation laws for AI, but no consolidated strategic legislation.

Thailand has its Personal Data Protection Act (PDPA) and Cybersecurity Act, alongside the "THACCA" policy to boost creative and tech economies, but these remain at the policy level and are not yet codified into law.

 

 

 

From 'Made in Vietnam' to 'Tech by Vietnam'

Under the new law, the government aims to cultivate 150,000 technology companies by 2035.

 

The vision is for Vietnamese tech brands to penetrate global markets not merely as OEM manufacturers, but as independent owners of exportable technology.

 

Vietnam is also rolling out attractive tax and financial incentives. High-tech and innovation projects will receive state funding, alongside import duty exemptions for equipment and tax benefits akin to those offered in special economic zones.

 

These include corporate income tax reductions for foreign-invested enterprises that transfer technology, 50% subsidies for startups and SMEs developing prototypes, and infrastructure investment support for strategic investors.

 

Foreign joint ventures transferring technology to local firms will also benefit from long-term corporate income tax reductions and other investment perks.

  

Cultivating Talent and Ethical AI

A cornerstone of the law is the technology workforce. The government has earmarked funds for curriculum development, training, and upskilling programmes.

 

Vietnamese digital experts will enjoy a five-year income tax exemption, while foreign experts will receive five-year visas and be exempt from work permits, simplifying global tech talent's entry into Vietnam.

 

The law also introduces a risk-based regulatory approach for artificial intelligence, categorising AI into high and non-high-risk groups, alongside specific technical standards and regulations, such as clear labelling for AI products.

 

Significant budgets are allocated for AI research and data centre infrastructure, complemented by defined prohibitions and "AI ethics" to safeguard security and personal privacy.

 

 

 

Order for Digital Assets and Cryptocurrencies

Addressing an area often lacking clarity in other nations, Vietnam has opted for comprehensive regulation of digital assets and cryptocurrencies.

 

The law distinguishes "virtual assets" from "cryptocurrencies" and establishes regulatory mechanisms to prevent financial crime.

 

It also enables innovation testing via a Regulatory Sandbox, allowing new businesses in Blockchain, DeFi, and FinTech to test their models under state supervision with temporary legal waivers.

 

Further enhancing its global outreach, Vietnam plans to establish "Vietnam Digital Technology Offices" in various countries to foster international cooperation and support Vietnamese companies in global expansion.

 

Special technology zones, similar to economic free zones, will be created to attract investment in target industries like semiconductors, software, and green technology, offering business-friendly tax policies and regulations.

 

Vietnam is unequivocally signalling to global investors and entrepreneurs that it is ready for this transformative shift. The nation is rapidly evolving from the world's factory to ASEAN's technology hub, with cities like Ho Chi Minh City and Da Nang potentially becoming the Silicon Valley of Southeast Asia if plans come to fruition.

(2025/06/27-00:00)