Vietnam Accelerates the Finalization of the Digital Technology Industry Law to Drive Economic Transformation and Technological Sovereignty

Sáng ngày 12/8, Bộ TT&TT đã tổ chức buổi làm việc với các bộ, ngành liên quan nhằm lấy ý kiến hoàn thiện dự thảo Luật Công nghiệp công nghệ số trước khi trình lên Chính phủ, Quốc hội.

In a decisive move to reshape the nation’s technological landscape, the Vietnamese Ministry of Information and Communications (MIC) convened a high-level inter-ministerial working session on August 12 to finalize the draft Law on Digital Technology Industry. Chaired by Deputy Minister of Information and Communications Bùi Hoàng Phương, the meeting brought together key stakeholders from the Government Office, the Ministry of Planning and Investment (MPI), the Ministry of Finance, and the Department of Information and Communications Technology Industry under the MIC. The primary objective is to refine the legislative framework before submitting it to the Government and the National Assembly for formal review and enactment.

The development of this landmark legislation marks a critical turning point for Vietnam as it transitions from a traditional assembly and subcontracting hub into a regional powerhouse for core technology design, innovation, and digital manufacturing.

Background and Context: Overcoming Legislative Bottlenecks

The genesis of the Law on Digital Technology Industry traces back to a direct mandate from the Prime Minister, assigning the MIC as the lead agency responsible for coordinating with ministries, ministerial-level agencies, local authorities, and relevant socio-political organizations. For years, regulations concerning the information technology (IT) industry were governed under the broader framework of the Law on Information Technology. However, rapid technological advancements, the emergence of artificial intelligence, semiconductor manufacturing, and digital infrastructure highlighted significant regulatory gaps and enforcement limitations within the legacy statutes.

The new legislative framework is meticulously designed to address these shortcomings, resolve legal ambiguities, and eliminate bureaucratic bottlenecks. Crucially, it aims to introduce breakthrough policy incentives tailored to high-tech sectors while incorporating robust risk-mitigation mechanisms to safeguard investments and intellectual property in the digital domain. By establishing a dedicated legal architecture, Vietnam seeks to foster a predictable, transparent, and globally competitive business environment.

Strategic Shift: From Assembly to Original Design and Innovation

At its core, the draft Law on Digital Technology Industry serves as a powerful catalyst to pivot Vietnamese enterprises away from low-value-add activities—such as contract manufacturing and hardware assembly—toward high-margin segments like research and development (R&D), integrated circuit design, software engineering, and core technology ownership.

According to the preliminary provisions outlined in the draft, the scope of regulation encompasses digital technology operations, products, and services; the institutional safeguards necessary to ensure industrial growth; and the rights and obligations of domestic and international entities participating in the digital ecosystem. Notably, the legislation explicitly excludes specialized production, procurement, and services dedicated strictly to national defense, security, and cryptography, maintaining a clear boundary between civilian technological advancement and sovereign defense operations.

The overarching vision is to establish a robust domestic market for digital products and services, empowering homegrown enterprises to capture greater value within global supply chains. This transition is deemed essential if Vietnam is to avoid the middle-income trap and achieve its ambitious target of becoming a leading digital economy in Southeast Asia.

Inter-Agency Collaboration and Stakeholder Consultations

During the August 12 working session, Deputy Minister Bùi Hoàng Phương emphasized the urgency of the legislative timeline, noting that the MIC is actively soliciting comprehensive cross-sectoral feedback to bulletproof the draft law prior to its official submission.

Representatives from other key government bodies offered critical insights into the structural pillars of the draft legislation. Phạm Thuỳ Hạnh, Deputy Director General of the Department of Legal Affairs at the Government Office, stressed that the legislative text must concentrate heavily on two foundational policy vectors: preferential investment frameworks and controlled sandbox mechanisms for emerging technologies.

"In developing the digital technology industry, the most critical elements are preferential investment policies, capital allocation structures, tax incentives, and ancillary support frameworks," Hạnh stated during the meeting. She expressed strong support for the MIC’s proposal to extend the highest possible tier of state incentives to the sector, given its strategic importance to Vietnam’s immediate and long-term economic trajectory.

Meanwhile, Vũ Sỹ, Deputy Director General of the Foreign Investment Agency under the Ministry of Planning and Investment (MPI), offered specialized recommendations regarding special economic zones and tech parks. Sỹ advised that the provisions governing "digital technology zones" within the draft law must be meticulously harmonized with the broader Law on Industrial Parks and Economic Zones, which is concurrently overseen by the MPI. Furthermore, he recommended that the drafting committee engage specialized legal consultants to audit individual statutory clauses and ensure seamless alignment with existing domestic commercial laws and international trade commitments.

Key Economic Drivers: Semiconductors, Taxation, and Experimental Sandboxes

Throughout the consultation, inter-ministerial delegates addressed several pressing issues that remain central to the success of the digital technology sector. Chief among these is the formulation of targeted investment incentives for the semiconductor industry—a sector where Vietnam has pledged aggressive growth, including a national target of training 50,000 high-tier semiconductor engineers by 2030.

Discussions also centered on value-added tax (VAT) frameworks for digital services, the establishment of regulatory sandboxes to test disruptive innovations without fear of penalization, and revitalized policies for capital reinvestment. Industry experts have long argued that without flexible regulatory testing grounds, domestic startups developing fintech, artificial intelligence, and Internet of Things (IoT) solutions will struggle to scale rapidly in a highly competitive global market.

The inclusion of these provisions signals a progressive shift in Vietnamese policymaking, demonstrating the government’s willingness to adopt flexible, innovation-friendly regulatory models traditionally found only in advanced economies.

Implications and Future Outlook

The finalization and eventual passage of the Law on Digital Technology Industry carry profound implications for Vietnam’s macroeconomic stability and technological independence. By establishing a dedicated legal identity for the digital sector, the government is signaling to global investors—including multinational technology giants—that Vietnam is committed to providing a secure, predictable, and highly incentivized environment for high-tech capital deployment.

As the drafting committee incorporates the feedback gathered from the August 12 session, the finalized text will undergo final administrative reviews before being formally submitted to the Government and subsequently tabled for debate in the National Assembly. If enacted successfully, the law will not only resolve long-standing ambiguities in IT governance but will also lay the institutional bedrock for Vietnam’s ascent as a premier global destination for digital innovation and advanced manufacturing.