Vietnam Passes Landmark Law to Regulate Digital Assets and Boost Tech Innovation

Vietnam's National Assembly has passed a significant law that defines and regulates digital assets, categorizing them into virtual assets, crypto assets, and other digital assets, each with a distinct legal status under civil law. This legislation, which will take effect on January 1, 2026, aims to provide a clear regulatory framework for digital assets, addressing a critical issue that has led many Vietnamese crypto and tech companies to relocate their operations to other jurisdictions with more defined regulations, such as Singapore.

The new law introduces major tax and investment incentives to boost domestic innovation in semiconductors, artificial intelligence, and digital infrastructure. These incentives are designed to curb offshore migration by offering clear rules and incentives to keep crypto firms and talent within Vietnam. The legislation sets a target of 150,000 digital technology enterprises by 2035, supported by unprecedented tax incentives and state investment. Companies developing semiconductors, AI systems, and digital infrastructure can receive corporate income tax rates as low as 10% for 15 years, along with exemptions from import duties and land rental fees. Large-scale projects investing over $80 million in data centers or $160 million in semiconductor facilities are eligible for additional "special" incentives, including a five-year personal income tax exemption for foreign experts.

The law also targets semiconductor development explicitly, establishing Vietnam's goal to "gradually become an essential link in the global supply chain." This move underscores Vietnam's ambition to emerge as a regional technology powerhouse, leveraging its growing digital economy and strategic investments in key technologies. The legislation is part of an ambitious plan to achieve an 8% economic growth target, as directed by Prime Minister Pham Minh Chinh in March. The new law defines digital assets as products "created, issued, transferred and authenticated using blockchain technology" with clear property rights under civil law. Both virtual and crypto assets explicitly exclude securities, digital representations of fiat currency, and other financial instruments under existing civil and financial laws.

Vietnam's crypto adoption has surged despite the legal uncertainty, with blockchain analytics firm ranking the country fifth globally for crypto adoption in 2024. Over $105 billion in blockchain market investments flowed into Vietnam during 2023-24, much of it through offshore structures that provided no benefit to the domestic economy. The new legislation aims to address this issue by providing a clear regulatory framework and incentives for domestic innovation, thereby retaining more of the economic benefits within the country. The law's passage marks a significant step forward for Vietnam's digital economy, positioning the country as a leader in the region's technological development.