Vietnam’s AI Sector in 2025: Regulatory Frameworks and Opportunities for Investors

We discuss Vietnam’s growing AI sector, regulatory developments expected in 2025, and highlight key regional players. With government-backed incentives and a proposed regulatory sandbox, the outlook for digital technology investors is promising.

NVIDIA’s planned expansion into Vietnam by the end of 2024 marks a significant step in the country’s efforts to strengthen its technology sector. As Vietnam emerges as a leading destination for technology development in ASEAN, the government is implementing proactive strategies to establish a supportive legal framework for artificial intelligence (AI).

This article provides an overview of Vietnam’s legal landscape for AI development and key insights for investors looking to capitalize on the country’s AI potential.

Vietnam’s legal landscape for AI development

The European Union (EU) is the only jurisdiction with a comprehensive statutory framework for AI under the AI Act. In contrast, the UK has adopted a more flexible approach, focusing on guiding principles rather than strict regulations. In Asia, China has implemented AI governance measures through the Personal Information Protection Law (PIPL) and the Network Data Security Management Regulations.

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Vietnam is also taking a flexible approach to AI regulation, structuring its legal framework in alignment with its AI development strategy. The National Strategy on Research, Development, and Application of Artificial Intelligence to 2030, introduced in 2021, outlines a phased approach: research, development, and large-scale application. This strategy aims to position Vietnam as a leading AI innovation hub in ASEAN by 2030.

Following the AI strategy announcement, the government has focused on fostering responsible AI development and establishing a legal foundation. A key regulatory effort is Decree No. 13/2023/ND-CP, issued on April 17, 2023, which took effect on July 1, 2023. This decree aligns with global data protection standards, such as the EU’s GDPR, to ensure privacy and data rights in AI development.

Additionally, in June 2024, the Ministry of Science and Technology (MoST) issued Decision No. 1290/QD-BKHCN, outlining nine principles for responsible AI research and development. These principles emphasize transparency, safety, security, privacy, and respect for human rights to ensure ethical AI deployment.

In October 2024, Vietnam was drafting legislation for the digital technology sector, including AI-specific regulations. This upcoming legal framework aims to support digital industry growth while addressing AI-related risks, providing clarity for businesses and investors navigating Vietnam’s AI landscape. 

Vietnam AI regulation in 2025: What to expect

By 2025, Vietnam will implement comprehensive legal measures to address key challenges in AI development. Resolution No. 57-NQ/TW, issued on December 22, 2024, by the Political Bureau, and later reinforced by General Secretary To Lam on January 13, 2025, outlines four pillars driving digital technology innovation, including AI:

• Flexible governance – encourage innovation by eliminating the “if you can’t manage it, ban it” approach in lawmaking.
• Integrated infrastructure – develop modern infrastructure to support safe and efficient AI growth.
• High-quality workforce – invest in education and training to build a skilled AI talent pool.
• Enhanced intellectual property protection – strengthen data security, technology safeguards, and IP rights through regulatory updates.

Additionally, the draft Law on Digital Technology Industry and the draft Law on Personal Data Protection introduce AI-related provisions that businesses should monitor closely.

Draft Law on Digital Technology Industry (Draft DTI Law)

The DTI Law draft consists of 8 chapters and 73 articles, with Section 5 of Chapter IV dedicated to AI regulations. The law introduces investment, taxation, land use, and rental incentives for projects and enterprises in the digital technology industry, including AI. Notable incentives for large-scale special projects under Article 20 of the Investment Law include:

• Special investment incentives – preferential corporate income tax (CIT) and other legal benefits.
• R&D expense deduction – 150 percent deduction of actual R&D expenses from taxable income, as per accounting laws.
• Personal income tax (PIT) exemption – 5-year exemption for experts, scientists, and specialized talent involved in qualifying projects.
• Land and water surface rent incentives – full exemption for the first 10 years, followed by a 50 percent reduction for the remaining term.
• Customs and Tax Preferences – simplified procedures and exemptions from import/export turnover conditions.

Beyond investment incentives, the draft DTI Law also introduces regulations to ensure responsible AI development, including:

• Prohibited AI practices – banning AI use that impairs individual decision-making, harms vulnerable groups, or expands sensitive databases for unauthorized purposes.
• Labeling requirements – AI-generated digital products must be labeled to ensure transparency.
• Regulatory sandbox – A trial period of up to 2 years (with possible extensions) for innovative digital products and services, allowing controlled testing under regulatory oversight.

Draft Law on Personal Data Protection (Draft PDP Law)

The draft PDP Law governs data protection across various sectors, including AI, big data, cloud computing, banking and finance, and healthcare. It permits individuals and organizations to research and develop AI, algorithms, and automated systems using personal data, provided they:

• Inform data subjects with clear explanations of how AI, algorithms, and automated systems impact their rights and interests.
• Allow data subjects to withdraw from R&D activities involving their data.

The Standing Committee of the National Assembly has approved the inclusion of the draft PDP Law in the 2025 Law and Ordinance Development Program. It is scheduled for final review in May 2025, with enactment expected in October 2025, making it Vietnam’s first official personal data protection law.

Vietnam – A key destination for AI development in 2025

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Over the past 5 years, Vietnam has attracted major international technology corporations due to its strategic location and abundant resources in ASEAN.

• Qualcomm established an R&D center in Hanoi in 2020, focusing on 5G and IoT research.
• Samsung operates a large R&D center in Hanoi, with a total investment of US$220 million.
• NVIDIA recently invested in an AI ecosystem-focused R&D center, marking one of the most significant AI investments in Vietnam.

These developments position Vietnam as a leading hub for AI research and innovation in the region.

Vietnam has many advantages, of which the biggest “superpower” is family values ​​and respect for education. Vietnamese people excel in STEM fields, especially math and science. This makes Vietnam the second-largest supplier of software engineers in the world – a fact that few people know about. With this potential, we believe that Vietnam is an ideal place for NVIDIA to develop R&D centers and build a strong AI ecosystem here. – Jensen Huang, CEO of NVIDIA.

According to the Ministry of Education and Training (MoET), Vietnam produces 50,000 IT and engineering graduates annually, providing a strong talent pool for the AI industry. The country has also invested in infrastructure, including the National Innovation Center (NIC), which connects scientists with IT businesses, fostering a cohesive innovation ecosystem.

Vietnam’s legal framework offers numerous incentives for digital technology investors, creating a favorable environment for business expansion. With the introduction of the regulatory sandbox, companies can develop and test new digital technology products and services for up to 2 years without being restricted by rigid legal requirements. International investors should capitalize on these advantages to enter and expand in Vietnam’s AI market.

Conclusion

Vietnam’s flexible approach to AI regulations has enabled the country to leverage its geopolitical advantages, skilled workforce, and innovation ecosystem for sustained technological progress. Through clear AI strategies, structured implementation plans, and progressive legal frameworks, the government aims to mitigate risks while fostering breakthroughs in AI development.

Recognizing stakeholder concerns over intellectual property rights, Vietnam has prioritized strengthening legal protections for information security and proprietary technology. This reflects the government’s commitment to shifting Vietnam’s economy from low-value manufacturing to high-value, innovation-driven production, starting in 2025.

Vietnam’s potential as a future AI innovation hub is no longer just a visionary goal of the country’s leadership—it is rapidly becoming a key player in Southeast Asia’s AI landscape. NVIDIA’s recent expansion is a clear indicator of this transformation, signaling strong growth prospects for both domestic and international investors in Vietnam’s AI sector.

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