From my perspective after 15 years on the ground, Vietnam's banking sector is undergoing a period of remarkable expansion, making it a focal point for global financial institutions from Southeast Asia and beyond. Reflecting the Vietnamese market's potential, the updated figures from the State Bank of Vietnam (March 30, 2025) show that the country's current […]
The concept of technology transfer holds immense significance for policymakers, carrying substantial implications for global economic progress. This is particularly relevant for countries like Vietnam, currently undergoing industrialization and modernization. The process involves rigorous research, policy formulation, and strategic planning aimed at maximizing the efficiency of adopting and implementing cutting-edge foreign technologies in domestic production. Equally crucial is the successful integration of homegrown technology across diverse industries and fields. This pivotal stage serves as a catalyst for achieving swift and sustainable development, playing a vital role in ensuring long-term economic prosperity.
An overview of technology transfer in Vietnam
Over the past few decades, Vietnam has made significant progress in technology transfer through policies aimed at attracting foreign direct investment (FDI) projects. These initiatives have yielded substantial successes in acquiring technology for production and business development, gradually raising the country's domestic production capabilities. Notably, industries such as Post and Telecommunications, Banking, Oil and Gas, Construction, Traffic have successfully absorbed advanced technologies, placing Vietnam at the forefront of global innovation.
The increasing competitive pressure from FDI enterprises has prompted domestic companies to invest in importing new equipment and technologies, as well as establish dedicated departments and research and development (R&D) centers to enhance their technological capabilities. Among the economic sectors that have thrived due to technology transfer and R&D collaborations associated with FDI projects, the oil & gas, and communications sectors stand out. They have progressed rapidly and modernized, keeping pace with regional and global standards.
Vietnam's technology market has experienced a vibrant transformation following the enactment of the Technology Transfer Law in 2017. This legislation aims to encourage the transfer of advanced and clean technologies while discouraging the importation of outdated and hazardous technologies. As a result, the technology landscape in Vietnam has become dynamic, fostering sustainable development and innovation.
In the realm of high technology, foreign investors have been drawn to Vietnam's three national high-tech parks, with the Hi-Tech Park in Ho Chi Minh City achieving notable success. Over the course of its 20-year establishment, the park has attracted approximately 130 investment projects with a total registered capital of nearly $7 billion. It has become a hub for renowned global corporations such as Intel, Microsoft, Nidec, Sanofi, Nipro, and Samsung, manufacturing high-tech, value-added products. Notably, Samsung has invested hundreds of millions of dollars to establish an R&D center, further affirming the government's commitment to creating a favorable high-tech investment environment and promoting technology transfer in Vietnam.
Some limitations in technology transfer through FDI projects
From an objective standpoint, foreign investment has undeniably played a role in reshaping Vietnam's economic structure. Through FDI projects, technology has been transferred from overseas to Vietnam, leading to a gradual shift in the country's technological landscape. Nonetheless, the outcomes attained thus far have fallen short of Vietnam's socio-economic development goals and requirements.
While it is true that the technology transferred into Vietnam largely matches or even surpasses the existing technology in the country, its overall level remains only moderately advanced compared to other regional nations. Many cutting-edge and modern technology products are yet to penetrate the domestic market.
A significant portion of technology transfer contracts registered at regulatory agencies for science and technology primarily emphasize the transfer of technological processes, technological know-how (73%), technical assistance (77%), and training (71%). Conversely, technology transfer that involves industrial property objects represents a relatively small fraction (13%) of these contracts.
In addition, the number of enterprises holding core technology and engaging in high-tech investments in Vietnam remains relatively low, with many FDI projects primarily focusing on low-value assembly and processing operations, leading to a limited localization rate and inadequate value generation within the country. Consequently, the expected technology spillover from FDI enterprises to domestic counterparts has not materialized as anticipated.
How Vietnam can leverage tech transfer & knowledge with the high-quality FDI projects
In order to enhance the technology transfer from FDI enterprises and maximize the benefits derived from this capital flow, Vietnam should prioritize the implementation of various solutions, such as: Establishing robust FDI policies, Strengthening intellectual property rights (IPR) protection, Supporting research and development (R&D) initiatives, and Establishing Intermediaries in Application and Technology Transfer.
Establishing effective FDI policies to promote technology transfer
To effectively attract high technology and technology transfer, particularly in high-tech fields and FDI projects, Vietnam should create and implement clear policies that incentivize technology transfer and knowledge sharing as a requirement for FDI projects. These policies can outline the expectations and obligations of foreign investors in terms of sharing their technology, expertise, and knowledge with local partners and employees.
A significant step in this direction was taken in 2021 when the Prime Minister issued Decision 29/2021/QD-TTg, which introduced special investment incentives designed to attract selective FDI investments. The decision offers preferential tax rates for corporate income tax to FDI enterprises that meet specific technology transfer requirements. For instance, investors who fulfill the level 1 technology transfer criteria can enjoy a reduced corporate income tax rate of 7% for 33 years, while those meeting the level 2 technology transfer requirements can benefit from a 5% corporate income tax rate for 37 years.
Notably, Vietnam has provided the highest level of incentives available under current laws to encourage hi-tech application projects and support hi-tech enterprises. Additionally, the Law on Investment recognizes high-tech enterprises as eligible for investment incentives, emphasizes investment incentives for hi-tech activities, and extends these incentives to hi-tech zones. This demonstrates the government's commitment to consistent policy-making in attracting foreign investment and promoting the inflow of advanced technology and high-tech expertise into Vietnam.
Enhancing intellectual property rights (IPR) protection
To facilitate technology transfer, it is essential for Vietnam to strengthen the protection of intellectual property rights (IPR).
FDI projects, particularly those of larger scale, are often undertaken by transnational companies (TNCs). Developing countries like Vietnam prioritize attracting such investments and offer various incentives to entice them.
However, TNCs face significant limitations when it comes to transferring new and highly competitive technologies to their overseas affiliates. They are concerned about potential risks of disclosure, loss of technology copyright, and unauthorized imitation or modification by local companies in the host country. While TNCs may often cite the host country's failure to meet their technology utilization requirements as the reason for not transferring new technologies, the underlying concern is the protection of their intellectual property.
By strengthening IPR protection, Vietnam can address these concerns and alleviate the fears of TNCs regarding technology transfer. This, in turn, will encourage TNCs to share their advanced technologies and knowledge with local partners and employees, promoting technological progress and fostering mutually beneficial collaborations.
Promoting research and development (R&D) initiatives
In addition to technology transfer, transnational companies (TNCs) also engage in research and development (R&D) activities within the host country. However, it is important to note that most R&D efforts conducted by overseas branches of TNCs primarily focus on adapting existing technologies to suit local conditions.
Therefore, to further bolster its technological capabilities, Vietnam should actively encourage FDI projects that prioritize R&D activities. By providing incentives and support for such initiatives, the country can attract foreign investors who are dedicated to innovation and technological advancement. These projects often involve a higher level of technology transfer and knowledge sharing, as they encompass the creation and dissemination of new technologies and expertise.
Establishing Intermediaries to facilitate technology transfer
As of 2022, Vietnam had 14 technology hubs and over 20 local technology exchanges designed to facilitate the connection, promotion, and transfer of technology to organizations, businesses, and individuals both domestically and internationally.
The presence of these technology hubs and intermediary organizations strengthens the linkages between researchers, entrepreneurs, and investors. They provide a platform for knowledge and technology exchange, supporting the implementation of innovative solutions in industries, and driving economic growth through technology-driven advancements.
By fostering the development of such intermediaries, Vietnam can create an ecosystem that facilitates effective technology transfer, encourages collaboration between academia and industry, and promotes the commercialization of research and development outcomes. These initiatives will further enhance the overall competitiveness and innovation capacity of the country.
Final Thoughts
Through the implementation of robust FDI policies, reinforced intellectual property rights (IPR) protection, and active promotion of research and development (R&D) initiatives, Vietnam has established an environment conducive to unlocking new horizons in technological advancement.
By embracing these opportunities, investors and business owners can tap into Vietnam's vibrant market and contribute to its technological growth. To explore the multitude of business prospects that await, we extend a special invitation to join our upcoming webinar, "Unlocking Business Opportunities in Vietnam." This webinar will provide valuable insights into the dynamic Vietnamese market, showcasing the potential for FDI projects and demonstrating how technology transfer and knowledge sharing can yield remarkable returns.
Don't miss out on this chance to be part of Vietnam's transformative journey. Join us at the webinar and discover the immense possibilities that lie within Vietnam's high-tech landscape. Together, we can forge fruitful partnerships and unlock a future filled with innovation, growth, and prosperity.
