In a landmark move for Southeast Asia, Vietnam has enacted its first-ever Law on Digital Technology Industry (LDTI) No. 71/2025/QH15 dated 14 June, 2025, a standalone law specifically dedicated to governing the rapidly growing digital technology industry. Approved by the National Assembly in 2025 and set to take effect on January 1, 2026, this pioneering […]
In a landmark move for Southeast Asia, Vietnam has enacted its first-ever Law on Digital Technology Industry (LDTI) No. 71/2025/QH15 dated 14 June, 2025, a standalone law specifically dedicated to governing the rapidly growing digital technology industry. Approved by the National Assembly in 2025 and set to take effect on January 1, 2026, this pioneering legislation creates both immense opportunities and critical compliance challenges for the entire digital technology industry.
For enterprises accustomed to navigating fragmented regulations, the new law on digital technology introduces a unified legal framework. This article unpacks the LDTI’s core principles for the digital technology industry and provides a strategic roadmap for business leaders managing technology products and services.
Key Takeaways:
- Pioneering Legislation: Vietnam is the first country to pass a standalone law governing the digital technology industry, aiming to build an ecosystem of 150,000 digital firms by 2035.
- Broad Regulatory Scope: The law applies to the digital technology industry, covering everything from digital technology products and digital technology services to artificial intelligence.
- Significant FDI Incentives: Foreign invested enterprises that facilitate technology transfer are eligible for investment incentives, including multi-year corporate income tax reductions.
- Strict Compliance Obligations: The Law on Digital Technology Industry introduces new requirements for digital technology enterprises, including licensing, annual reporting, and adherence to standards on artificial intelligence.
- Strategic Advantage Through Compliance: Proactive compliance unlocks support policies, tax exemptions, and preferential treatment, turning a legal necessity into a competitive edge for the digital technology industry.
The Digital Technology Law and the National Digital Transformation
The LDTI is the cornerstone of Vietnam’s national digital transformation, a strategy to elevate the nation’s position in the global digital technology industry. The Law has institutionalized Resolution 57-NQ/TW, Resolution 59-NQ/TW, Resolution 66-NQ/TW, Resolution 68-NQ/TW of the Politburo, creating a strong legal corridor, promoting innovation, enhancing competitiveness and promoting digital transformation, developing the digital economy quickly, strongly and sustainably.
The government’s goal is ambitious: foster an ecosystem of 150,000 digital enterprises and grow the digital economy to US$43 billion by 2030. According to Vietnam Briefing (2025), the law provides critical legal certainty for high-growth sectors, especially for digital technology products and digital assets.
The national digital transformation process aims to unify the country’s approach to technological innovation. The objectives are clear: strengthen production capacity under the "Make in Vietnam" initiative, attract high-quality FDI, and ensure the nation's digital technology industry infrastructure is competitive and secure.
The Legal Framework of the Law on Digital Technology Industry
The legal framework of the Law on Digital Technology Industry is comprehensive. Its key components include:
- Covered Industries: The law applies to all digital technology industry activities, including hardware, software, artificial intelligence, and the management of digital assets and virtual assets.
- Applicable Entities: Its scope extends to both domestic tech enterprises and foreign invested enterprises that offer technology products and services.
- Primary Regulator: The Ministry of Information and Communications (MIC) is the lead agency for the digital technology industry.
This law complements regulations like the Cybersecurity Law of 2018 and the Law on Personal Data Protection Decree (coming into effect January 1, 2026). The draft Decree guiding the Law on Digital Technology Industry has been drafted; it is proposed to detail Clause 4, Article 13, Clause 1, Article 19, Clause 3, Article 20 of the Law on Digital Technology Industry 2025 (effective January 1, 2026) on digital technology industry activities; criteria for determining high-quality digital technology industry human resources; attracting and promoting digital technology talents.
Regulations on measures to implement the Law on Digital Technology Industry on controlled testing of digital technology application products and services.
Compliance Obligations for the Digital Technology Industry
The Law on Digital Technology Industry establishes a dual framework of obligations and investment incentives. Businesses in the digital technology industry must prepare for:
- Core Obligations: Licensing for digital technology services, registering digital technology products, and submitting annual reports.
- Key Standards: Adhering to new technical regulations and international standards for artificial intelligence systems, especially high risk systems.
- Strategic Incentives: Compliant firms receive support policies, including corporate income tax and personal income tax reductions. These tax incentives are designed to support Vietnamese enterprises and domestic startups.
This transforms compliance into a strategic imperative for the digital technology industry, creating a path to high-value government contracts.
Impact on Investment for Key Digital Technology Products
For foreign investors, the law on digital technology presents a predictable anchor. The impact is significant in three areas:
- FDI Incentives: The law encourages technology transfer. According to Article 16 of LDTI, research and development activities of digital technology products and services enjoy the highest incentives according to the law on science, technology and innovation; digital transformation.
- According to Vietnam Briefing (2025), FIEs that facilitate technology transfer receive multi-year tax incentives. This is a key part of supporting enterprises in the digital technology industry.
- Data Governance: Stricter rules for cross-border data transfers and the handling of digital assets will require careful planning, especially for major global tech corporations.
- Legal Integration: The law interacts with existing regulations governing foreign direct investment and trade agreements, adding complexity for companies developing key digital technology products. This will require investment in high quality human resources.
Challenges and Opportunities in Digital Technology Industry Activities
The full implementation of the Law on Digital Technology Industry will depend on sub-laws still in development. For medium sized enterprises, this requires balancing risk with opportunity. The table below highlights key risks for the digital technology industry and potential responses for their technology products and services.
| Risk Level | Compliance Risk Description | Potential Opportunity or Mitigation |
| High | Handling artificial intelligence data models (high risk systems subject) without ethical review | Establish AI ethics board and adopt international standards (ISO/IEC 42001) |
| Moderate | Weak data security for technology products and services | Implement MIC-approved cyber security audit and response plan |
| Low | Certified software and registered digital technology products | Gain priority access to government procurement and tax incentives |
| Emerging | Cross-border transfer of digital assets non-compliance | Use local servers or hybrid cloud architecture to meet localization rules |
| Strategic | Fragmented governance for the digital technology industry | Develop an internal compliance committee to centralize oversight |
Conclusion: Turning Compliance into a Competitive Edge
Vietnam’s leadership in developing this comprehensive law on digital technology underscores its commitment to the digital technology industry. This legislation solidifies the country's ambition on the world stage.
For investors, compliance with the Law on Digital Technology Industry is a gateway to competitive advantages. It is the key to unlocking investment incentives and building trust with regulators for digital technology products.
Proactive preparation before the 2026 enforcement date will be the defining factor. By seeking expert guidance now, businesses can turn these requirements into a platform for sustainable development in one of Asia's most dynamic markets for digital technology products.
Frequently Asked Questions
What is the most critical first step for a foreign tech company to comply with the new law?
The first step is a comprehensive gap analysis of your current digital technology industry activities. This involves mapping your digital technology products and services against the Law on Digital Technology Industry's scope, particularly concerning licensing, data security for digital assets, and artificial intelligence ethics.
How long will it take for a foreign company to become fully compliant with the LDTI?
Our experience suggests a 6-to-12-month period for full implementation within the digital technology industry. This includes adapting technology products and services and training staff. For major global tech corporations, starting before mid-2025 is essential to meet the January 1, 2026 deadline.
Should my company establish a local entity or partner with a Vietnamese firm to navigate this law?
The best strategy depends on your long-term objectives in the digital technology industry. A local entity provides control and direct access to investment incentives. Partnering with a local firm can accelerate market entry. Based on our 3,000+ projects, we often advise a hybrid approach to maximize growth and eligibility for support policies.
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