Vietnam has introduced a new investment support fund aimed at attracting foreign direct investment (FDI), particularly from major technology firms.

The fund, established under a recently signed government decree, will offer cash grants and subsidies to businesses that meet specific investment criteria, with a focus on high-tech industries.

New decree offers incentives for high-tech firms

On December 31, 2024, the Vietnamese government issued Decree No. 182/2024/ND-CP, outlining the structure, management, and funding of the investment support fund.

The fund will be financed by the state budget and operated by the Ministry of Planning and Investment.

The initiative includes two types of subsidies: annual expense subsidies for high-tech enterprises and research and development (R&D) projects and initial investment subsidies for businesses establishing R&D centers in semiconductors and artificial intelligence (AI).

The fund will cover a range of costs, including training, R&D, fixed assets, high-tech manufacturing, and infrastructure development.

Companies investing in R&D projects in semiconductors and AI may receive financial support of up to 50 percent of their initial investment costs.

The decree takes effect in fiscal year 2024, with applications for subsidies due before July 10 of the following year.

Vietnam aims to become regional tech hub

Minister of Planning and Investment Nguyen Chi Dung said the fund will be key to positioning Vietnam as a leading AI research and development center in Asia.

“This marks a significant milestone in our efforts to attract world-class high-tech businesses,” said Bui Ngoc Tuan, deputy general director of Deloitte Vietnam.

He urged enterprises to begin preparations early to maximize their chances of securing funding.

The Foreign Investment Agency (FIA) reported that in 2024, several major tech firms expanded operations in Vietnam, including Samsung Display (capital expansion), Amkor (semiconductor manufacturing), LG Display, Foxconn, Goertek, and Luxshare (ongoing projects).

Despite increasing FDI, Vietnam still has a limited number of large-scale high-tech projects. Of the 110 foreign-invested projects worth over US$500 million, only 27 are in the high-tech sector.

Record FDI disbursement in 2024

Vietnam’s FDI disbursement hit a record $25.4 billion in 2024, up 9.4 percent from the previous year, according to the FIA.

A total of 3,375 new projects worth $19.7 billion were approved. The manufacturing and processing industry led FDI inflows with $25.6 billion, followed by real estate at $6.3 billion.

Top investors and FDI destinations

Top investors come from Singapore ($10.2 billion) South Korea, mainland China, Hong Kong, and Japan.

Leading FDI destinations include Bac Ninh Province ($5.1 billion, 2.8 times higher than in 2023), Hai Phong City ($4.9 billion), and Ho Chi Minh City ($3 billion).

The FIA said foreign capital remains crucial to Vietnam’s economic development, particularly in semiconductors, energy, and high-tech industries.

By the end of 2024, Vietnam had attracted a total of $502.8 billion in FDI across 42,002 projects, with manufacturing, real estate, and power production leading investment sectors.

South Korea remains Vietnam’s top investor with over $92 billion, followed by Singapore, Japan, Taiwan, and Hong Kong.

New fund aims to bolster Vietnam’s competitiveness

With the global minimum tax introduced in 2024, Vietnam faces new challenges in maintaining its investment appeal.

The investment support fund is expected to counterbalance these effects, making the country more attractive to large-scale, high-tech projects.

“This fund is a strategic move to strengthen Vietnam’s position in the global semiconductor and AI industries,” the FIA said in a statement.

As the decree comes into effect, investors are being encouraged to act quickly to secure funding, with the first applications due in July 2025.

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