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South Korean firms concern over Vietnam’s high-tech incentives
South Korean companies, including Samsung Electronics, are worried about Vietnam’s plan to change incentives for the high-tech sector, warning it could raise costs for foreign investors and affect new investments.
South Korea is a major investor in Vietnam, with US$92 billion invested by the end of 2024, and Samsung alone accounts for over one-tenth of Vietnam’s exports.
Vietnam’s proposed law would remove some tax, duty, and land incentives for high-tech firms, with the changes up for adoption in December.
Korean business representatives raised these concerns with Vietnam’s prime minister, citing possible negative effects on investment expansion and technology transfer.
Vietnam has already introduced a 15% global minimum tax for large multinationals, impacting companies that previously benefited from lower rates.
Pledged investment from Korean firms rose 15% to US$3.7 billion in the first 10 months of 2024, but Korean officials say future tax burdens could increase if incentives are reduced.
Vietnam has not published recent figures on divestments.
🔗 Source: Reuters
🧠 Food for thought
Implications, context, and why it matters.
Vietnam’s incentive rollback may be more symbolic than substantive for existing investors
- Samsung alongside other Korean firms feels uneasy due to uncertainty, not proven cost hikes, because the draft law text is not public. Grandfathering for current projects remains unclear.
- Vietnam’s 15% global minimum tax (Qualified Domestic Minimum Top-up Tax, or QDMTT) already covers large multinationals. Firms like Samsung already gave up lower corporate tax rates, so the new rules may codify OECD Pillar Two practice.
- Korean investment rose 15% to US$3.7 billion in the first ten months of 2024. With a vote due in December, Hanoi may trade some tax holidays for grant-based incentives that fit global tax rules.
Site selection consultants can capitalize on diverging incentive packages in ASEAN (Association of Southeast Asian Nations)
- If Vietnam trims high-tech perks, some foreign direct investment will shift toward Malaysia or Thailand. Malaysia offers add-on benefits, while Thailand has deep manufacturing supply chains.
- Industrial park developers and site selection firms help companies choose factory or office locations. These advisers can stand out with comparative reviews of 2025 incentives across ASEAN, covering Malaysia’s schemes and Thailand’s special economic zones (areas with preferential policies) plus Indonesia’s domestic market access.
- Multinational chief financial officers (CFOs) want Pillar Two modeling tools to calculate effective tax rates, with subsidies recast as compliant grants or Research and Development (R&D) credits instead of tax holidays. Vendors that partner with industrial parks can earn consulting fees while guiding clients through Vietnam’s shift and similar reforms across the region.
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