Vietnam Passes Landmark Digital Technology Law, Boosting AI, Semiconductor, and Crypto Sectors

Vietnam's Landmark Digital Technology Industry Law

Vietnam's National Assembly has overwhelmingly approved a groundbreaking piece of legislation that promises to reshape the country's digital landscape. The Law on Digital Technology Industry, passed with 441 votes in favor out of 445 lawmakers present, is set to take effect on January 1, 2026 1

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. This comprehensive law addresses several key areas, including the regulation of digital assets, promotion of artificial intelligence (AI) and semiconductor industries, and the creation of incentives for technology startups.

Regulating Digital Assets

One of the most significant aspects of the new law is its approach to digital assets. Vietnam has become one of the first countries to comprehensively regulate digital assets through dedicated legislation rather than traditional financial frameworks 1

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. The law defines digital assets as products "created, issued, transferred and authenticated using blockchain technology" with clear property rights under civil law 1

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. This move is expected to address the problem of Vietnamese crypto and tech companies relocating to other jurisdictions with clearer regulations, such as Singapore.

The legislation creates three main categories of digital assets:

1. Virtual assets for exchange or investment purposes
2. Crypto assets using encryption technology
3. Other digital assets

Importantly, the law explicitly excludes securities, digital representations of fiat currency, and other financial instruments from these categories 1

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Boosting AI and Semiconductor Sectors

Beyond crypto regulation, the new law underscores Vietnam's ambition to emerge as a regional technology powerhouse. It sets an ambitious target of 150,000 digital technology enterprises by 2035, supported by unprecedented tax incentives and state investment 1

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Companies developing semiconductors, AI systems, and digital infrastructure can benefit from:

• Corporate income tax rates as low as 10% for 15 years
• Exemptions from import duties and land rental fees
• Additional "special" incentives for large-scale projects 1

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The law specifically targets semiconductor development, aiming to make Vietnam "an essential link in the global supply chain" 1

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Attracting Tech Talent and Investment

To address the shortage of skilled workers in the tech sector, the legislation places a strong emphasis on education and training 2

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. Companies in relevant sectors will be eligible for government subsidies to help cover the cost of hiring and training a digital workforce 2

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. Additionally, the law offers a five-year personal income tax exemption for foreign experts working on large-scale projects 1

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These measures are designed to curb the offshore migration of talent and keep crypto firms and skilled professionals within Vietnam. The country has seen a surge in crypto adoption, ranking fifth globally for crypto adoption in 2024, according to blockchain analytics firm Chainalysis 1

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Aligning with International Standards

Vietnam's efforts to regulate the crypto sector also reflect growing international pressure. The country was placed on the Financial Action Task Force's (FATF) "gray list" of jurisdictions falling short of global anti-money laundering and counter-terrorist financing (AML/CFT) standards in 2023 2

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. The new law addresses these concerns by requiring measures to prevent and combat money laundering and terrorism under Article 50 2

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Economic Impact and Future Prospects

The Digital Technology Industry Law is part of a broader strategy to shore up Vietnam's economy in the face of U.S. tariffs affecting its traditional manufacturing base 2

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. By focusing on digital technology, the government aims to emphasize innovation and employment creation.

With over $105 billion in blockchain market investments flowing into Vietnam during 2023-24, much of it through offshore structures, the new law seeks to ensure that these investments benefit the domestic economy 1

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. As Vietnam positions itself as a hub for digital technology, the impact of this landmark legislation on the country's economic landscape and its role in the global tech industry will be closely watched in the coming years.