Fueling Innovation: Vietnam's Incentives For Startups In Ho Chi Minh City

Vietnam, once celebrated for its burgeoning startup scene, is now entering a new era of strategic maturity. As 2025 unfolds, the nation is pivoting from a volume-driven ecosystem to one focused on high-value, deep-tech innovation.

This transformation is most evident in Ho Chi Minh City, which has become the epicenter for a nationwide push to attract foreign investment into advanced sectors like Artificial Intelligence and Semiconductors. International investors are increasingly drawn to Ho Chi Minh City's tech ecosystem, recognizing its economic strength and growth prospects.

This shift is not accidental; it is the result of deliberate, forward-thinking government policies designed to build a resilient and globally competitive tech hub. 

This article explores the key trends, opportunities, and challenges defining Vietnam’s startup ecosystem in 2025, with a special focus on Vietnam’s incentives for startups in Ho Chi Minh City.

Key Takeaways

• Ecosystem Maturation & Strategic Shift: Vietnam is moving beyond traditional models, now strategically focusing on high-tech sectors such as AI, Semiconductors, and renewable energy to build long-term value for innovative startups.
• Proactive Government Incentives: Ho Chi Minh City is at the forefront, leveraging Resolution 98/2023/QH15, which pilots specific mechanisms and policies for the city's development. To attract investment capital and talent, this resolution allows the city to offer significant tax incentives, including a multi-year tax exemption that is particularly beneficial for Vietnamese startups.
• The War for High-Skilled Talent: Despite strong growth, the most significant challenge for 2025 is a critical shortage of skilled professionals in AI and semiconductor design, creating a bottleneck for development.
• Shift to ‘Smart Capital’: Following the global ‘funding winter,’ foreign investors are now prioritizing startups with clear paths to profitability and sustainable business models over hyper-growth strategies.

I. Vietnam's Startup Environment: Entering A Mature Phase

As 2025 dawns, Vietnam’s startup ecosystem is demonstrating not just a strong recovery but a clear entry into a more mature phase of development. Ho Chi Minh continues to be the vibrant heart of this ecosystem.

The defining feature of 2025 is a significant paradigm shift, with the focus moving beyond traditional sectors and toward deep-tech fields. Government incentives are particularly targeted at certain sectors, such as high-tech, socially important, or large-scale industries.

This evolution, backed by significant financial support from the state, is attracting a new wave of “smart capital” seeking sustainable business models. These powerful tax incentives are designed to fuel this new phase of growth in Chi Minh City.

II. Opportunities And Challenges: The 2025 Outlook

The landscape in 2025 is vastly different. The “funding winter” has thawed, leaving a crucial lesson for innovative startups in Ho Chi Minh to concentrate on operational efficiency and a clear path to profitability.

The greatest opportunity lies in the synergy between government policy and global trends. National strategies for semiconductor development have opened a new playing field for investment projects. There is also significant support from investment attraction policy mechanisms such as tax incentives, financial support.

However, significant hurdles remain. According to Vietnam News (2025), a primary challenge has long been access to capital, which is often hindered by administrative red tape.

While new policies in Ho Chi Minh City aim to streamline this, the most pressing challenge is the war for talent. The demand for engineers skilled in scientific research is surging, a critical gap that the Vietnamese government is racing to fill.

III. Government Moves: From Planning To Action

By 2025, government initiatives under Resolution 98 have been practically implemented, offering some of the most competitive tax incentives in the region, including:

• 5-Year Corporate Income Tax (CIT) Exemption: A significant tax holiday is offered to fuel early-stage growth for innovative start-up enterprises. This powerful incentive is also extended to larger, strategic investments, specifically targeting projects that build innovation centers, R&D centers, or advance high-tech transfers in fields like information technology, biotechnology, and new materials, with an investment capital of VND 3,000 billion or more.
• Attractive R&D Cost Deductions: To directly encourage deep-tech innovation, companies are allowed to deduct 150% of their actual Research & Development (R&D) costs from their taxable income.
• Targeted Incentive Framework: Incentives are not one-size-fits-all. They are precisely tailored based on the sector, investment scale, and project location, particularly within Ho Chi Minh City’s high-tech zones, going beyond standard industrial zone benefits. This framework gives priority to key industries such as the semiconductor integrated circuit industry, including the design and manufacturing of integrated circuits (ICs) and flexible electronics, chip design, new battery technology, and clean energy, especially for projects with an investment capital of VND 30,000 billion or more.
• Attracting Quality Foreign Investment: The entire strategy is structured to attract high-quality foreign investment, enabling the city to compete with major regional hubs. The application of these incentives is exemplified by landmark projects like the planned Can Gio International Transshipment Port, which requires an investment of VND 50,000 billion or more.

IV. The Impact In Ho Chi Minh City: A Strategy Yielding Results

In Ho Chi Minh City, these policies are working. The new framework has helped anchor foreign investment and encouraged international funds to establish a presence.

This targeted support is the cornerstone of the city’s vision. As highlighted by The Hanoi Times (2021), Chi Minh City aimed to support 1,000 innovative startups by 2025, and the results are visible in its vibrant high-tech community.

An innovative startup enterprise in Chi Minh City now has a distinct advantage, as the city’s ecosystem connects them with leading financial institutions. The city provides not only tax holidays but also additional incentives like support for technology transfer, R&D infrastructure, and land rent exemptions.

According to the Ho Chi Minh City Department of Finance, foreign investment attraction increased by 10.6% in the number of investments and increased by 37.43% in total investment capital compared to the same period in 2024.

According to statistics, as of September 30, 2025, Báo Mới reported that the total value of foreign investment capital, including newly granted, increased investment capital, and capital contributions, share purchases, and capital repurchases of Ho Chi Minh City reached 7.127 billion USD, ranking first in the country in attracting FDI.

In September 2025, the total number of foreign-invested projects newly granted investment registration certificates was 1,395 projects with a total registered investment capital of more than 1.389 billion USD.

The acceleration of large-scale projects and infrastructure in Chi Minh City is creating a powerful ripple effect. The focus on attracting quality foreign investment is fueling both startups and larger investment projects.

V. Final Thoughts And Future Direction

Entering 2025, the startup landscape in Chi Minh City is more dynamic than ever. The legal challenges now extend beyond corporate income tax into new frontiers like data governance and IP protection.

Navigating the landscape of corporate income tax incentives and tax holidays requires expertise. This is where Viettonkin’s advisory services become critical. We are strategic partners who help you maximize the benefits of the government's preferential tax rates, ensuring your innovative startup enterprise can thrive.

Do not let the complexities of a new regulatory era hinder your potential. Contact Viettonkin today to build your future within the dynamic innovation ecosystem of Ho Chi Minh City.

Frequently Asked Questions

1. What types of startups are eligible for these incentives in Ho Chi Minh City?
The incentives primarily target "innovative startups" and companies operating in strategic, high-tech sectors. Key focus areas include Artificial Intelligence (AI), the semiconductor industry, Green Technology (GreenTech), biotechnology, and new materials. Eligibility often depends on meeting specific criteria related to the project's scope and investment capital.

2. What is the single most significant tax benefit for an innovative startup under Resolution 98?
The most impactful benefit is the five-year full exemption from Corporate Income Tax (CIT). This provides a crucial financial runway for startups in their critical early years, allowing them to reinvest profits back into growth and R&D without the burden of tax obligations.

3. Are these specific incentives only available in Ho Chi Minh City?
Yes, the incentives detailed under Resolution 98 are specifically tailored for and piloted in Ho Chi Minh City to transform it into a high-tech hub. While Vietnam offers other general investment incentives nationwide (e.g., for projects in industrial zones or difficult socio-economic areas), the comprehensive and high-tech-focused package discussed in this article is unique to Ho Chi Minh City's strategic plan.

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