Stay informed with the latest legal developments impacting the market in Vietnam. This month, we are pleased to share the most relevant updates from our GBA Board Members, Dr. Oliver Massmann, Partner & General Director of Duane Morris Vietnam, and Michael Wekezer, Country Manager of Rödl Vietnam.
Legal News contributed by Dr. Oliver Massmann, some highlights are as follows:
1. Law on Personal Income Tax (amended) approved
- The National Assembly, during its ongoing 10th sitting, on December 10, approved the revised Law on Personal Income Tax (PIT), scheduled to take effect from July 1, 2026.
- Under the new law, the annual tax-exempt revenue threshold for a business household shall be increased to VND500 million (over $18,000) from the current VND100 million (and VND 200 million proposed in earlier drafts). Accordingly, a household business earning VND500 million or less annually will not be subject to personal income tax. This means that around 2.3 million household businesses shall not be subject to revenue tax.
- The amended law raises the family circumstance-based deduction to VND 15.5 million (about $588) per month (from the current VND 11 million) for each taxpayer, while the deduction for each dependent increases to VND 6.2 million from the current VND 4.4 million per month.
- The progressive tax schedule for income from salaries and wages has been streamlined from the current seven brackets to five. The top statutory rate remains at 35 percent, but the income threshold for this top bracket is raised to a monthly income above VND 100 million (up from the current VND 80 million).
2. Free trade proposed in Ho Chi Minh City
- The National Assembly Standing Committee, on November 24, reviewed draft resolutions that amend and supplement special incentives for Ho Chi Minh City and central Da Nang city .
- According to the Government’s submission, the draft Resolution amending and supplementing certain provisions of Resolution No. 98/2023/QH15 on piloting special mechanisms and policies for the development of Ho Chi Minh City includes new provisions on the establishment of a Free Trade Zone (FTZ).
- The draft sets out a comprehensive legal framework comprising seven key policies for the HCM City FTZ. These include decentralising authority to the municipal People’s Committee to decide on the establishment, expansion and adjustment of FTZ boundaries; empowering the municipal People’s Council to regulate relevant procedures, placing the Ho Chi Minh City Exporting Processing and Industrial Zones Authority in direct charge, specifying customs authority management, allowing land allocation and leasing without auctions or bidding for FTZ investment projects (except commercial housing).
- The NA Standing Committee also commented on a draft resolution amending and supplementing several provisions of the NA’s Resolution No. 136/2024/QH15 on the organisation of urban administration and the pilot implementation of special mechanisms and policies for the development of Da Nang city. The draft Resolution also adds several provisions related to a FTZ in the central city.
3. Foreign investors exempt from asset and income declaration as the new Anti-Corruption Law passes
- The National Assembly (NA) on December 10 passed a law amending and supplementing certain articles of the Law on Anti-Corruption, expanding the scope of individuals required to declare assets and income within State-owned enterprises. The Law will take effect on July 1, 2026.
- During the discussion process, many NA deputies supported expanding the scope of the declaration from enterprises with 100% State capital to those where the State holds more than 50% of the charter capital.
- According to the Government’s report, mandating that individuals assigned to manage and operate a State-owned enterprise that holds more than 50% of its charter capital declare their assets and income is appropriate. This aligns with current anti-corruption requirements and ensures consistency with the Law on Enterprises and the Law on Management and Use of State Capital Invested in Production and Business at Enterprises.
- According to the Government, these adjustments are based on two factors. First, there have been three salary increases since 2018. Second, socio-economic conditions have developed nearly threefold, with market prices, in particular, seeing significant increases compared to 2018.
Legal News contributed by Michael Wekezer, some highlights are as follows:
1. New approach to investment under Amended Law on Investment
- Draft amended Investment Law 2020 (Effective from 03 January 2026)
- Foreign investors may register for the establishment of the enterprise before obtaining the IRC.
- From 1 July 2026, 38 conditional business lines will be abolished while narrowing/adjusting 20 others, and issuing two new lists: (i) sectors subject to pre-licensing and (ii) sectors transitioning to an ex post supervision regime.
2. Establishing a unified nationwide legal framework for the labour database
- Decree No. 318/2025/ND-CP provides guidance on the Law on Employment regarding labour registration and the labour market information system (Effective from 01 January 2026 for compulsory-insurance employees, and from 1 January 2027 for all remaining groups)
- Labour registration applies to (i) compulsory social insurance employees, (ii) employed persons outside compulsory social insurance, and (iii) unemployed persons; it excludes officials, civil servants, public employees, and the armed forces.
- Labour registration is integrated into the social insurance dossier for compulsory-insurance employees, and done online via vieclam.gov.vn or VNeID for others.
3. Legal foundation for the use of electronic labour contracts
- Draft Decree on the conclusion and implementation of electronic labour. (Not effective yet)
- Electronic labour contracts have the same legal effect as paper contracts and take effect once the last party digitally signs, unless otherwise agreed.
- Each electronic contract is assigned a unique national ID for verification and reporting.
- Paper contracts must be converted into electronic data before any electronic amendment, suspension, or termination.
| Dr. Oliver Massmann
Partner & General Director |
Michael Wekezer
Country Manager |