Vietnam’s AI & Semiconductor Strategy: The Impact of Decree 353/2025

Vietnam is strategically positioning itself at the forefront of the digital industrial revolution. The digital technology industry is no longer just a socio-economic goal but the fundamental bedrock for advanced sectors like Artificial Intelligence (AI) and semiconductors. In this context, Decree 353/2025/ND-CP, guiding the implementation of the Law on Digital Technology Industry, was enacted to establish a synchronized legal framework and specify preferential policies for sector growth, effective from January 1, 2026. Below, Viet An Law will provide an in-depth analysis of Vietnam’s AI & Semiconductor strategy: The impact of Decree 353/2025.

Beneficiaries of incentives and support for digital technology industry activities

The entities eligible for preferential support for digital technology industry activities under Article 3 of Decree 353/2025/ND-CP include:

• Digital technology products and services;
• Investment in building digital technology industrial infrastructure and concentrated digital technology zones;
• Semiconductor industry;

Policy incentives for digital technology products and services: A launchpad for AI and semiconductors

According to Clause 1, Article 3 of Decree 353/2025/ND-CP, activities related to digital technology products and services are entitled to the following support and preferential policies:

Manufacturing digital technology products and providing digital technology services

The production of digital technology products and the provision of digital technology services are entitled to investment support and incentives as stipulated in Article 28 of the Law on Digital Technology Industry 2025:

The production and provision of digital technology services are identified as investment-incentive sectors, enjoying full incentives in the following areas:

• Taxes;
• Land;
• Investment policies and other support;

In particular, the following sectors are classified as business lines that receive special investment incentives:

• Developing artificial intelligence (AI) systems;
• Researching, designing, manufacturing, packaging, and testing semiconductor chips;
• Producing key software and digital technology products;
• Investing in AI data centers; …

For large-scale AI and semiconductor projects, enterprises also benefit from special investment incentives, including significant reductions in corporate income tax, land rent, and customs procedures.

Incentives for renting and purchasing digital technology products and services using state budget funds

Incentives for leasing and purchasing digital technology products and services using state budget funds are applied under the preferential policies stipulated in Article 31 of the Law on Digital Technology Industry 2025, aiming to promote the use of digital technology products in the public sector.

Specifically:

• Digital technology products and services that meet the standards will be given priority in contractor selection.
• AI projects, national digital transformation projects, and key tasks may apply direct contracting or special selection mechanisms.
• The State will directly commission enterprises to research and produce key digital technology products, including AI and semiconductors.

Research and development (R&D) of digital technology products and services

Research and development (R&D) activities for digital technology products and services are entitled to incentives and support under Articles 16 and 17 of the Law on Digital Technology Industry 2025.

Accordingly, R&D activities in the field of digital technology enjoy the highest level of incentives under the law on science, technology, and innovation.

In addition, the State will:

• Allocate budget to support R&D for AI and semiconductors;
• Allow enterprises to use national key laboratories and technology incubation centers;
• Prioritize investment in the formation of digital technology R&D facilities and innovation centers for AI and semiconductors;

This helps enterprises drastically reduce initial research costs – the biggest barrier to entry in the high-tech industry.

Extensive support and incentives for digital technology infrastructure and concentrated digital technology zones

According to Clause 2, Article 3 of Decree 353/2025/ND-CP, investment projects for the construction of digital technology industrial infrastructure and investment in concentrated digital technology zones are entitled to priority, incentives, and investment support as stipulated in Articles 21 and 24 of the Law on Digital Technology Industry 2025:

Investing in digital technology industrial infrastructure and concentrated digital technology zones is identified as a sector with special investment incentives.

The State prioritizes budget allocation for the development of:

• Data centers;
• Digital technology laboratories;
• Semiconductor chip testing and measurement facilities;
• Concentrated digital technology zones;

Projects in the concentrated digital technology zone are entitled to:

• Preferential treatment similar to that of areas with special difficulties;
• Exemption or reduction of land rent;
• Full enjoyment of tax incentives and specific investment incentives; …

Special incentive policies for the semiconductor industry

The semiconductor industry is identified as a key sector and is subject to special incentive mechanisms. The development of the semiconductor industry and businesses participating in the semiconductor supply chain benefit from specific mechanisms and policies as stipulated in Articles 39 and 40 of the Law on Industry and Technology 2025.

Accordingly, semiconductor businesses will benefit from:

• Special incentives for the production of semiconductor materials, equipment, and machinery;
• Budgetary support for chip design, R&D, and personnel training;
• Incentives for businesses participating in the semiconductor supply chain, including ancillary products;

Incentives for innovative startup projects in the digital technology industry

According to Clause 4, Article 3 of Decree 353/2025/ND-CP, innovative startup projects in the digital technology industry are entitled to incentives and support as stipulated in Article 29 of the Law on Digital Technology Industry 2025.

Accordingly, innovative startup projects in the digital technology industry are sectors and professions that receive special investment incentives and support as prescribed by laws on investment, taxation, land, and other relevant laws.

Innovative startup projects in the digital technology industry receive direct funding from local budgets as stipulated by the State Budget Law or from the Digital Technology Industry Development Program for activities including:

• Training and development of human resources for the digital technology industry;
• Attracting high-quality human resources and digital technology talents;
• Research and development; pilot production;
• Startup consulting;
• Technology acquisition and technological innovation.

Numerous corporate tax incentives for digital technology industry activities

Enterprises operating in the digital technology industry enjoy many corporate income tax incentives under the Law on Digital Technology Industry 2025, such as:

Numerous corporate tax incentives for digital technology industry activities

Enterprises providing research and development services for digital technology (Clause 4, Article 16)

Expenditures by enterprises on research and development of digital technology are subject to an additional expenditure level when determining taxable income for corporate income tax purposes, as stipulated by corporate income tax laws.

Enterprises that manufacture products or provide digital technology services (Clause 3, Article 28)

Projects producing key digital technology products; research and development, design, manufacturing, packaging, and testing projects for semiconductor chips; and large-scale artificial intelligence (AI) data center construction projects that are eligible for special investment incentives and support are entitled to incentives as prescribed by the law on corporate income tax, land, and other relevant laws.

Enterprises undertaking projects to manufacture electronic equipment (Clause 5, Article 40)

If the criteria in Circular 33/2025/TT-BKHCN are met, the company will be eligible for support and incentives regarding corporate income tax under the Corporate Income Tax Law 2025.

Vietnam’s AI & Semiconductor strategy: The impact of Decree 353/2025

Decree 353/2025/ND-CP is not only a guiding document for the implementation of the Law on Digital Technology Industry, but also one of the important policy tools shaping the development strategy for AI (artificial intelligence) and the semiconductor industry in Vietnam. With its comprehensive incentive system, the Decree creates far-reaching impacts on participating entities, from technology startups to large corporations, from investors to policymakers.

Increase investment attractiveness in the AI ​​and semiconductor sectors

Decree 353/2025/ND-CP designs investment incentives, tax policies, and land policies specifically for digital technology products and services and key industries, with AI and semiconductors being top priority sectors. Specifically:

• Enterprises researching, designing, and manufacturing semiconductor chips, building AI data centers, and developing key AI products will enjoy preferential corporate income tax rates, land lease fee exemptions/reductions, and various specific investment policies.
• Including key projects in the list of specially prioritized investment sectors will increase the attractiveness of FDI and private capital to these fields.

As a result, Vietnam is increasingly becoming an attractive investment environment for domestic and foreign investors looking to deploy AI and semiconductor projects with lower input costs and better controlled legal risks.

Supporting innovation and promoting AI product development

Decree 353/2025/ND-CP strongly encourages research and development (R&D) activities by:

• Providing financial resources to support R&D, access to key laboratories, and high-tech incubation centers.
• Linking R&D programs with tax and investment incentives, helping AI enterprises reduce initial research costs – one of the biggest bottlenecks to innovation.

This helps create a favorable legal environment for enterprises, including AI startups, to develop new products, test innovative services, and bring AI solutions to a wider application in the economy.

Developing high-quality human resources for AI and semiconductors

Besides financial and tax support, Decree 353/2025/ND-CP also clearly defines criteria for identifying high-quality digital technology human resources, with a focus on experts, researchers, lecturers, and highly qualified personnel in the field of digital technology. This:

• Helps attract and retain talent in the AI ​​and semiconductor fields, including foreign personnel;
• Creates conditions for enterprises to build a skilled workforce that meets the requirements of high-tech development.

A high-quality workforce is a crucial foundation for AI and semiconductor enterprises to accelerate innovation, enhance competitiveness, and integrate into global value chains.

Expanding market opportunities and increasing the competitiveness of enterprises

Thanks to the preferential policies under the Decree, AI products, digital services, and semiconductor-related products have the opportunity to:

• Receive priority in public leasing and procurement – ​​helping enterprises access large markets from the outset;
• Be integrated with national digital transformation programs, promoting wider application in key economic sectors.

The public adoption and prioritization of digital technology products in digital technology tenders helps AI and semiconductor enterprises develop sustainably and expand their market share both domestically and internationally.

Promoting integration of the digital technology industry ecosystem

Decree 353/2025/ND-CP facilitates close collaboration among various entities in the digital technology ecosystem (the state, large enterprises, startups, research institutes):

• AI startups and small companies can be tested in a sandbox, reducing legal barriers;
• Large corporations can expand research, investment, and application on a large scale;
• The state coordinates and creates policies to ensure harmonious and sustainable development.

This collaboration helps create a collaborative environment where AI and semiconductor projects can develop more rapidly and align with national interests.

The above is an analysis of the Vietnam’s AI & Semiconductor strategy: The impact of Decree 353/2025. In the context of AI and semiconductors becoming new pillars of economic growth, correctly understanding and promptly implementing preferential policies according to Decree 353/2025/ND-CP will be a crucial advantage for enterprises and investors to achieve sustainable development; Viet An Law is ready to provide comprehensive legal advice and support throughout the implementation of AI and semiconductor projects in Vietnam.