Vietnam’s 15th National Assembly wrapped up its 8th session on the weekend bringing to the end a month of debate and discussion with a number of new laws and amendments to existing laws approved. Here’s a few key takeaways for foreign firms doing business in Vietnam.

The VAT cut was extended

Firstly, the two percent cut to Vietnam’s Value-Added Tax, that first appeared during the pandemic, has been extended to the end of June 2025. This has been a key pillar of Vietnam’s fiscal policy response to the economic challenges that began during the COVID-19 pandemic and have continued for varying reasons–the housing collapse in China, and fuel price surges on the back of wars in Eastern Europe and the Middle East, for example.

Of note, the budget is expected to take a hit of VND 26.1 trillion or US$1.03 billion as a result.

This extension would suggest that despite heralding in some very-high GDP growth numbers this year, there is some acknowledgement that it hasn’t been all clear sailing.

The VAT was updated

The Law on Value-added Tax has also been updated. It now includes a 5 percent tax on fertilisers from July next year. Whereas this will likely mean increased input costs for agricultural producers, it has been argued that local fertilizer manufacturers will be able to claim back the VAT they pay on their raw materials and therefore this should reduce their production costs allowing them to cut their prices. The logic here feels a little fuzzy, it will be interesting to see if this is in fact how this plays out.

Furthermore, the VAT on Vietnam’s creative industries has also been increased from 5 percent to 10 percent. This will apply to cultural activities, exhibitions, physical education, sports, performing arts, film production, and the import, distribution and screening of films. Local film makers and creative workers have been vocal about their objections to this increase claiming it will knee-cap an industry that is already struggling.

These claims, however, have been countered with a National Assembly allocation of VND 122 trillion or US$4.8 billion to the National Target Program on Cultural Development which has also received broad media coverage. However, in the program the term cultural development includes sports and cultural centres and the restoration and maintenance of national monuments alongside developing an annual quota of 10 national artistic works, and it’s not clear how those funds might be divided.

Furthermore, it’s also worth keeping in mind that the Vietnamese government takes a very traditional and narrow view of what culture is and this can be very limiting for modern creative works. Ergo, a lot of creative workers were probably better off under the 5 percent VAT rate.

Provisions were made for a central counterparty clearing house

In another small step forward for the local bourse, an update to the Law on Securities has added a provision for a central counterparty clearing house (CCP) to be established as a subsidiary of the Vietnam Securities Depository and Clearing Corporation.

A central party clearing house essentially acts as an intermediary between traders taking the cash from one and the stocks from the other then swapping them over. A lack of a CCP has been a key challenge with respect to seeing Vietnam’s stock exchange upgraded from a frontier market to a secondary emerging market and therefore this development, once implemented, could give Vietnam’s stock market a nice little boost.

Internet regulations were reformed

Decree 157, which adds verification requirements for social media accounts in Vietnam, was approved, along with a revised Law on Data which essentially codifies data management in Vietnam.

Together these two laws have been couched outside of Vietnam in terms of the government clamping-down further on dissent. Whereas there may be some truth to this, in reality it looks to only give the authorities marginally more power than they already had with most provisions in the Law on Data already in the Personal Data Protection Decree passed last year.

Likewise for social media, it has been argued that verification requirements will make it easier to identify users that post content the government disapproves of. However, the government has had the power to compel social media operators to provide user data for a long time but has done so only very rarely. This is likely because there are much easier ways to do this. With this in mind, there actually seem to be much more relevant reasons for this new requirement like cracking down on fake health claims and financial scams.

See: Vietnam’s New Social Media ID Regulations: Why?

Trade Union Law changes were approved

An updated Law on Trade Unions has also been approved. Changes include allowing foreign workers to join trade unions–though they won’t be able to run for any elected positions–and provisions for establishing independent trade unions intended to meet the requirements of the International Labour Organisation’s Convention 87 which requires labour to be allowed to organise freely and independently of government influence. Vietnam has committed to complying with the convention as part of its CPTPP and EVFTA commitments.

In fact, Vietnam has been out of compliance with the CPTPP since January over the matter which was supposed to be rectified within five years of the agreement coming into force. Incidentally Canada raised this delay as an issue earlier this year.

Of course, local news coverage has been focused on the foreign worker element of the new law far more than the ability to organise freely. This would fit with reports earlier in the year that instructions had been issued that while the reforms might be made on paper efforts should be made to ensure they do not materialise in practice.

That said, if this law does allow free association in the spirit of Convention 87, this would be a very significant reform not just for Vietnam’s labour movement but the country on the whole–very rarely is any mobilisation of any sort permitted outside of the Party structure.

Planes, trains, and nuclear power plants

Shifting gears, an extension of the deadline for phase one of Long Thanh airport was approved. It should now be completed by the end of 2026.

A resolution has also been passed clearing the way for a proposed high-speed rail project between Hanoi and Ho Chi Minh City to move forward. Despite the hype and broad and extensive coverage of the issue, the next step will be a feasibility study and notably it is generally in the land acquisition and financing stages these sorts of bluesky initiatives in Vietnam tend to trip up.

Furthermore it was officially agreed that plans for a nuclear power plant in Ninh Thuan shelved about a decade ago should be put back on the table. There is still a long way to go, however, before this will practically result in nuclear power with Minister of Industry and Trade, Nguyen Hong Dien, acknowledging as much earlier in the week.

“…Nuclear power and new energy sources in the future must definitely exist, but to have them in practice, they must be mentioned in the law right now… Only then will there be a nuclear power project after 10 years,” he is quoted as saying.

In fact, this assessment could further be extrapolated to cover the bulk of the aforementioned developments, with tangible outcomes for most, likely some ways down the road, if at all. That said, that these matters are being discussed, does speak to the thinking among the upper echelons of Vietnam’s political elite and by extension the direction in which the country is being steered.

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