This week we wanted to highlight our upcoming legal guide for investment in Vietnam prepared by Associate Le Thanh Cong and Legal Assistant Pham Hoang Vu. This excerpt from the full guide covers investment support by the government for enterprises, particularly SMEs and technology startups, which is a subset of investment incentives offered under the prevailing laws.

Investment Support


Investment support does not apply to all foreign investors, but only the following types of enterprises:

  • Small and medium enterprises;
  • High-tech enterprises;
  • Science and technology enterprises and organizations;
  • Enterprises investing in agriculture and rural areas;
  • Enterprises investing in education and law dissemination.


Forms of investment support

Support for training and development of human resources

The State will use its budget to support enterprises to improve their production and business management capacity, quality and efficiency of their operations, and guide the planning, organization and management of activities to support resource development, and pay for courses and training courses.

Credit support / State Investment Credit.

Forms of State Investment Credit

  • Investment loans
  • Investment credit guarantee
  • Post-investment support

Eligible borrowers

Clients have investment projects on the List of projects eligible for State Investment Credit attached to Decree No. 32/2017/ND-CP (“Decree 32”), including, inter alia, investment projects (i) using high technologies, (ii) manufacturing hi-tech products on the list of high technologies issued by the Prime Minister; or (iii) imanufacturing products being outcomes of scientific and technological research of science and technology enterprises in accordance with current laws.

Lending Conditions

  • Having full legal capacity and having carried out the prescribed investment procedures;
  • The investment project in need of the State Investment Credit, subject to appraisal and evaluation by the Vietnam Development Bank as being efficient and capable of repaying the loan;
  • Having an equity capital for the project implementation equal to at least 20% of the total project investment capital. The specific level shall be considered and decided by the Vietnam Development Bank to suit the financial capability of the investor and conform to the project’s debt payment plan, except for special projects decided by the Prime Minister;
  • Providing loan security under the Decree 32 and relevant regulations;
  • Having no non-performing loan owed to any credit institutions by the time the Vietnam Development Bank considers the provision and disbursement of a loan;
  • Having purchased property insurance from an insurance business lawfully operating in Vietnam for the loan security property; and
  • Observing the regulations on accounting, annual financial statements and audit of annual financial statements in accordance with law.

Loan Limit

The maximum State Investment Credit for the project is 70% of the total investment capital of such project (excluding mobalized capital).

Loan Terms

To be determined according to the capital recoverability of projects and debt payment ability of borrowers to suit production or business characteristics of projects but must not exceed 12 years (and 15 years for group-A investment projects), unless otherwise extended by the Prime Minister.

Support for technology transfers

Conditions for Receiving Supports

  • Having a investment project which are either listed in Appendix I or Appendix II of this Guide;
  • Having a technology transfer agreement, or Technology Transfer Agreement Registration Certificate (if so required by the laws) issued by the provincial People’s Commitee or the Ministry of Science and Technology, as applicable;
  • Having the technology transfer for such the investment project.

Types of support

  • Lending loans with preferential interest rate and/or granting interest subsidies to the enterprises for carrying out technology transfer; and/or
  • Providing supportive fund for performing science and technology tasks or direct support.

Levels of funding

  • The levels of funding shall apply to the funds (i) from national science and technology programs; (ii) from the funds used for developing science and technology of enterprises, ministries and governmental agencies; (iii) from the state budget used for science and technology; and (iv) from other funding sources.
  • The loans used for transferring technology of the project shall be granted an interest subsidy of up to 2% per year by the National Technology Innovation Fund or Science and Technology Development Fund of the ministries or governmental agencies.
  • If an enterprise takes out loans to transfer technology of a project, it shall receive loans with preferential interest rates as prescribed in the regulations of the funds or credit institutions which provide concessional loans.

Support for market development, information provision

Support for market development is a support to solve difficulties in the output product market for enterprises with the organization and implementation of the National Trade Promotion Program, which is in charge of the implementation by the Ministry of Industry and Trade.

This program includes trade promotion activities such as collecting information about markets, customers and goods; building a database of export markets; search for export markets; organizing trade fairs and exhibitions; organizing international conferences on export goods in Vietnam; promoting Vietnamese brands of goods and services, etc. These activities are carried out in accordance with the provisions of the Law on Foreign Trade Management 2017.

Support for research and development

Research and development support is regulated in the Law on Science and Technology 2013. The State implements research and development support for enterprises and investment projects by ensuring the research and development capacity of science and technology organizations; at the same time building and developing the science and technology market.

In addition, in order to strengthen domestic research capacity, the Law on Science and Technology 2013 also provides regulations on the use of the State budget to purchase inventions, designs, technical documents and technological know-how to serve research and development; science and technology market development.

Investment Project of Startups / SMEs

Relaxation of Investment Conditions for Startups

As mentioned in the Section “Common Forms of Foreign Investment”, a foreign investor who wishes to establish an enterprise in Vietnam will need to obtain an IRC. However, under the current Investment Law, this requirement is not applied if the enterprise to be incorporated is a small and medium-sized startup, innovative enterprise or an innovative startup investment fund (collectively, the “Startups”), i.e., the foreign investor will not need to have an investment project, nor obtain an IRC.

Support for the SMEs

In addition to other supports (which are granted to other type of enterprises as mentioned above), for those Startups categorized as SMEs[1], they will be entitled to the following specialized incentives, including:

Support in technology

Reimbursement of up to 50% (up to VND100mil per year) of each:

  • the value of the advisory contract for digitalization of the enterprise, in terms of business processes, administration processes, manufacturing processes, technological processes and conversion of business model;
  • the cost of leasing, buying solutions for digitalization for automation, improvement of efficiency of business processes, administration processes, manufacturing processes, technological processes in the enterprise and conversion of business model;
  • the value of the advisory contract for establishment of intellectual property rights; management and development of products and services with protected intellectual property rights; and
  • the value of the advisory contract for technology transfer that is appropriate for the enterprise.

Support in information

SMEs will be provided with an account on the SME Assistance Portal (in Vietnamese: Cổng thông tin quốc gia hỗ trợ doanh nghiệp nhỏ và vừa), at the website:, and may access the following information thereon free of charge:

  • Information about plans, programs, projects and activities related to the assistance for SMEs;
  • Business guidelines, credit, markets, products, technologies and enterprise incubation; and
  • Other information requested by the SMEs in accordance with the laws.

 Support in consultancy

SMEs will receive counseling about personnel, finance, manufacturing, sale, market, internal administration and other contents relevant to their business operation (except counseling about administrative procedures and legal advice according to relevant laws) as follows:

  • 100% of the value of the advisory contract but not exceeding 50 million VND/year/enterprise for micro-enterprises, not exceeding 70 million VND/year/enterprise for women-owned micro-enterprises, micro-enterprises with high female employment and micro-enterprises that are social enterprises;
  • Reimbursement of up to 50% of the value of the advisory contract but not exceeding 100 million VND/year/enterprise for small enterprises, not exceeding 150 million VND/year/enterprise for women-owned small enterprises, small enterprises with high female employment and small enterprises that are social enterprises;
  • Reimbursement of up to 30% of the value of the advisory contract but not exceeding 150 million VND/year/enterprise for medium enterprises, not exceeding 200 million VND/year/enterprise for women-owned medium enterprises, medium enterprises with high female employment and medium enterprises that are social enterprises.

Support in development of human resources

There will be online training for startups and business administration into the support policy for human resources development in SMEs. SMEs can freely access and join lectures on the online training systems of the Ministry of Planning and Investment, the provincial People’s Committees as well as online training courses, or have direct interaction with other SMEs via existing teaching tools on smart devices (e.g. Zoom or Microsoft Teams)

Support in interest rates

This support will be provided (exclusively) to the innovative startup SMEs and SMEs participating in industry clusters and value chains. When obtaining medium and long-term loans from credit institutions, these SMEs will be supported by the State budget with subsidised interest rates at rate of maximum 2% per year.

[1]           Under Article 4.1 of Law on SMEs, an SME is defined as either a micro-enterprise, small enterprise or medium-sized enterprise having the annual average number of employees who participate in social insurance is not greater than 200; and (A) having total capital not greater than 100 billion dong or (B) the enterprise’s revenue of the previous year not greater than 300 billion dong;