Guide to self-assessment of investment incentive criteria

Why Do Businesses Need to Self-Assess Investment Incentive Eligibility?

Under Vietnam’s current regulations, businesses are responsible for determining and declaring whether their investment projects qualify for investment incentives.

This means government authorities do not automatically grant incentives to every project. Investors must prove that their projects satisfy the legal conditions for preferential treatment.

Conducting a proper self-assessment at the early investment stage helps businesses:

• Optimize tax and operating costs
• Select suitable investment locations
• Reduce legal risks
• Increase eligibility for higher incentive levels
• Avoid future tax reassessments or incentive withdrawals

According to the Investment Law 2020, investment incentives are determined based on project industry, location, scale, and strategic characteristics.

What Criteria Should Businesses Evaluate?

1. Evaluate Whether the Business Sector Is Eligible

This is one of the most important factors.

Businesses should compare their project activities with the list of incentivized industries under the Investment Law and Decree 31/2021/ND-CP.

Common incentivized sectors include:

• High technology
• Research and development (R&D)
• Supporting industries
• Renewable energy
• Logistics
• Software production
• Education and healthcare
• Environmental protection
• Data centers and AI

Projects in these sectors may qualify for stronger tax and land-use incentives.

2. Evaluate the Investment Location

Businesses should accurately determine:

• Province or city
• District or local area
• Industrial park or economic zone

and compare the location with Vietnam’s official list of investment incentive areas.

Projects located in:

• Disadvantaged areas
• Especially disadvantaged areas
• Economic zones
• High-tech parks
• Specialized industrial parks

often receive higher investment incentives.

Many FDI companies currently select project locations based on long-term tax benefits and land cost advantages.

3. Evaluate Investment Scale

Large-scale projects may qualify for special investment incentives.

Businesses should assess:

• Total investment capital
• Disbursement schedule
• Expected revenue
• Employment generation
• Economic and social impact

According to Decision 29/2021/QD-TTg, certain large-scale high-tech and innovation projects may enjoy special incentives for up to 37 years.

4. Evaluate Technology and Environmental Factors

Vietnam currently prioritizes projects related to:

• High technology
• Digital transformation
• AI and semiconductors
• Green energy
• Environmentally friendly manufacturing

Businesses should prepare:

• Technology documents
• Technical explanations
• Environmental commitments
• Energy efficiency reports

to improve their chances of receiving investment incentives.

5. Evaluate the Ability to Maintain Incentive Conditions

Businesses must not only qualify initially but also maintain incentive conditions throughout project operations.

For example:

• Maintaining approved business activities
• Meeting investment schedules
• Fulfilling technology commitments
• Complying with environmental and tax regulations

Failure to maintain these conditions may result in:

• Withdrawal of incentives
• Tax reassessment
• Additional financial obligations

What Documents Should Businesses Prepare?

To properly assess investment incentive eligibility, businesses should review:

• Company legal documents
• Investment project proposal
• Land-use planning information
• Land or factory lease agreements
• Financial statements
• Technology-related documents
• Workforce planning documents

Proper documentation helps businesses work more effectively with investment registration and tax authorities.

Common Mistakes Businesses Make

Assuming All Industrial Parks Automatically Provide Incentives

In reality, incentive levels depend on:

• Specific project location
• Industry sector
• Project type
• Investment scale

Not all industrial parks offer the same level of incentives.

Focusing Only on Tax Incentives

Some businesses focus only on obtaining incentives initially without planning how to maintain compliance over the long term.

This is a common risk leading to disputes or tax recovery later.

Current Investment Incentive Trends in Vietnam

Vietnam is currently prioritizing investment projects in:

• High technology
• Data centers
• Semiconductors
• Artificial intelligence (AI)
• Logistics
• Supporting industries
• Clean energy

At the same time, provinces are increasingly competing through infrastructure development and investor support policies.

Conclusion

To meet Vietnam’s current investment incentive requirements, businesses should conduct a comprehensive self-assessment covering industry eligibility, investment location, project scale, technology factors, and long-term compliance capacity.

Careful legal and investment planning from the beginning helps businesses reduce risks, optimize costs, and maximize available incentives.

References

• Investment Law 2020
  https://thuvienphapluat.vn/van-ban/Dau-tu/Luat-Dau-tu-2020-427301.aspx
• Decree 31/2021/ND-CP
  https://thuvienphapluat.vn/van-ban/Dau-tu/Nghi-dinh-31-2021-ND-CP-huong-dan-Luat-Dau-tu-470262.aspx
• Decision 29/2021/QD-TTg on Special Investment Incentives
  https://thuvienphapluat.vn/van-ban/Dau-tu/Quyet-dinh-29-2021-QD-TTg-ve-uu-dai-dau-tu-dac-biet-500558.aspx
• Ministry of Planning and Investment of Vietnam
  https://www.mpi.gov.vn