Corporate income tax incentives for businesses investing in new projects in industrial clusters

Do businesses investing in new projects in industrial clusters enjoy corporate income tax incentives? What size area must an industrial cluster have?

1. Will an enterprise investing in a new project in an industrial cluster enjoy corporate income tax incentives?

Can an enterprise investing in a new project in an industrial cluster enjoy corporate income tax incentives? Yes. Under point b, Clause 2, Article 15 of the Law on Investment 2025 (No. 143/2025/QH15, effective from 01/03/2026), industrial clusters are listed among incentivized investment locations (alongside industrial parks, export processing zones, hi-tech parks, economic zones…). The specific corporate income tax incentives follow the Law on Corporate Income Tax 2025 (No. 67/2025/QH15) and Decree 320/2025/ND-CP (issued 15/12/2025, guiding the Law on Corporate Income Tax 2025, applicable from the 2025 tax year).

Under Decree 320/2025/ND-CP, the following key incentives apply to new investment projects in incentivized industries and areas:

Preferential tax rates

Under Clause 4, Article 19 of Decree 320/2025/ND-CP, a preferential tax rate of 17% for 10 years applies to: (a) new investment projects in incentivized industries; (b) new investment projects implemented in areas with difficult socio-economic conditions; (c) new investment projects in economic zones not located in preferred tax areas.

Tax exemption and tax reduction periods

Under Clause 2, Article 20 of Decree 320/2025/ND-CP, enterprises falling under Clause 4, Article 19 of the Decree enjoy tax exemption for 2 years and a 50% reduction of tax payable in the next 4 years. The exemption/reduction period is counted from the first year the project has taxable income; where there is no taxable income in the first 3 years, it is counted from the 4th year from the first year of revenue (Clause 4, Article 20).

Accordingly, an enterprise investing in a new project in an industrial cluster may enjoy tax incentives where the project is in an incentivized industry or the cluster is located in an area with difficult socio-economic conditions — the exact incentive depends on the industry, the location of the cluster, and the investor’s eligibility conditions. The former provisions (Decree 31/2021/ND-CP, the old Appendix III classification, and the 20%-for-10-years regime under the repealed Decree 218/2013/ND-CP) no longer apply.

2. What size area must an industrial cluster have?

According to Clause 1, Article 2 of Decree 68/2017/ND-CP, it is stipulated:

An industrial cluster is a place of production and provision of services for industrial production and handicrafts, has a defined geographical boundary, has no living population, and is invested and built to attract, Relocating small and medium-sized enterprises, cooperatives, and cooperative groups to invest in production and business.

Industrial clusters with an area of not more than 75 hectares and not less than 10 hectares. Particularly for industrial clusters in mountainous districts and craft village industrial clusters with an area of ​​not more than 75 hectares and not less than 5 hectares.

3. Which industries are encouraged to invest in industrial clusters?

Professions that are encouraged to invest and relocate to industrial clusters as stipulated in Article 3 of Decree 68/2017/ND-CP include:

– Production and business establishments that pollute or have the risk of polluting in craft villages, residential areas, urban areas and production establishments Other production needs to be relocated to industrial clusters;

– Manufacturing products, spare parts, assembling and repairing machinery and equipment for agricultural and rural production;

– Producing supporting industrial products on the List of supporting industrial products prioritized for development issued by the Government;

– Producing consumer products, using local raw materials and local labor;

– Potentially strong industries, occupations, and products of the locality, region, and other fields, industries, and occupations consistent with the development planning Development of local industries and handicrafts;

– Agricultural, forestry and fishery processing industry.

Organizations and individuals investing in production and business in industrial clusters in the fields, industries, occupations, production and business establishments that are encouraged to invest and relocate to the above-mentioned industrial clusters will be given priority consideration for investment incentives and support.

This article was reviewed by ANT Legal’s AI Legal Council under a 7-step internal process (cross-checked against current law — the Law on Corporate Income Tax 2025 and Decree 320/2025/ND-CP, applicable from the 2025 tax year, and the Law on Investment 2025, effective 01/3/2026). This is not confirmation that a human lawyer has reviewed your specific case.