Summary Of New Regulations Officially Taking Effect From January 2026 In Vietnam

As Vietnam enters 2026, the legal landscape will undergo significant changes that directly impact both workers and businesses. ALTAS presents this update to highlight key new regulations that affect employee rights and obligations, as well as business costs, governance, and compliance. This report summarizes the most notable changes effective from January 2026, including: (1) regional minimum wage increases, (2) the 2025 Personal Data Protection Law, (3) higher personal income tax exemptions, and (4) other legal updates related to labor, taxation, social insurance, and corporate management.

1. Regional Minimum Wage Increase Effective from January 1, 2026

On November 10, 2025, the Government issued Decree No. 293/2025/NĐ-CP stipulating minimum wage levels for employees working under labor contracts. This decree replaces Decree No. 74/2024/NĐ-CP and will take effect from January 1, 2026. It establishes monthly and hourly minimum wage rates across four geographic regions, while clearly defining the principles of application, the scope of regulation, and the responsibilities of employers.

Specifically, regional minimum wages will increase by VND 250,000 to VND 350,000 per month, equivalent to an average rise of 7.2% compared to current levels. This adjustment was recommended by the National Wage Council to ensure a minimum standard of living for workers, while balancing the interests of both employees and businesses in the socio-economic context of 2026.

1.1. Comparison of regional minimum wage levels before and after January 1, 2026

The table shows a relatively uniform increase across all regions, with Region I (including Hanoi, Ho Chi Minh City, and other major urban areas) seeing the highest absolute rise. The hourly minimum wage has also been adjusted accordingly, providing greater flexibility for various wage payment methods.

1.2. List of areas applying to regional minimum wage

Decree No. 293/2025/NĐ-CP includes a detailed appendix listing the specific localities assigned to each wage region. For example:

Hanoi City:
Region I: Central wards such as Hoan Kiem, Ba Dinh, Hai Ba Trung, Dong Da, Cau Giay, Tay Ho, Long Bien, Ha Dong, Thanh Xuan, Hoang Mai, Tu Liem, Gia Lam, Dong Anh, Soc Son, Son Tay, Chuong My, Quoc Oai, Hoai Duc, Thach That, Thanh Tri, Thuong Tin, Phu Xuyen, Thanh Oai, etc.
Region II: All remaining wards and communes.

Ho Chi Minh City:
Region I: Wards such as Saigon, Tan Dinh, Ben Thanh, Binh Thanh, Go Vap, Tan Binh, Tan Phu, Thu Duc, etc.
Regions II & III: Other areas, classified based on socio-economic development levels.

Provinces such as Quang Ninh, Dong Nai, Tay Ninh: Apply all four regions; specific localities are detailed in the decree's appendix.

1.3. Principles of Application and Employer Responsibilities

• The monthly minimum wage is the lowest base used to negotiate and pay employees who work full standard hours and meet agreed performance or job requirements.

• The hourly minimum wage applies to hourly wage arrangements and must not fall below the regulated level.

• For wage payments based on week, day, product, or contract, the converted wage must not be lower than the monthly or hourly minimum.

• Employers must review and adjust labor contracts, collective agreements, and internal policies to ensure no reduction of previously agreed benefits that are more favorable to employees.

• The wage used to calculate mandatory social insurance contributions must not be lower than the regional minimum wage applicable at the time of payment for the simplest job under normal working conditions.

1.4. Financial Impact and Cost Implications for Businesses

According to estimates by the Ministry of Home Affairs, the 7.2% increase in regional minimum wages is expected to raise average production costs by approximately 0.5–0.6%, mainly due to higher mandatory insurance contributions. For labor-intensive sectors such as textiles and footwear, cost increases may reach 1.1–1.2%. However, since most businesses already pay above the minimum wage, the main impact will be on insurance costs and wage adjustments for low-income workers.

2. Law on Personal Data Protection 2025 (Law No. 91/2025/QH15)

2.1. Overview and scope of regulation

The Personal Data Protection Law 2025 was passed by the National Assembly on June 26, 2025, and will take effect on January 1, 2026. The law governs personal data, the protection of personal data, and the rights, obligations, and responsibilities of relevant agencies, organizations, and individuals. It applies to both Vietnamese and foreign entities and individuals that process the personal data of Vietnamese citizens. Personal data subjects are entitled to fundamental rights, including: the right to be informed about data processing activities; the right to consent, refuse consent, and withdraw consent; the right to access, edit, request correction, obtain, delete, or restrict the processing of personal data; the right to file complaints, denunciations, lawsuits, and claims for compensation; and the right to request the implementation of data protection measures. In addition, personal data subjects have obligations to protect their own data, respect the personal data of others, provide accurate and complete information, and comply with legal regulations on personal data protection.

2.2. Prohibited acts and sanctions

The law strictly prohibits acts such as buying or selling personal data (unless otherwise provided by law), unlawful processing of personal data, appropriation, intentional disclosure or loss of personal data, and abusing personal data protection activities to violate the law. Penalties are severe: up to 5% of the previous year’s revenue for violations involving cross-border data transfers; up to 10 times the revenue gained from trading personal data; and up to VND 3 billion for other violations related to personal data protection.

2.3. Special regulations for businesses and employees

Regarding recruitment and labor management, enterprises may only request personal information from job applicants for recruitment purposes, and such data must be processed in accordance with legal regulations and with the applicant’s consent. If the applicant is not hired, the enterprise must delete or destroy their personal data, unless otherwise agreed. Upon termination of an employment contract, the employer must also delete or destroy the employee’s personal data, except where otherwise agreed or required by law, such as for insurance or tax record retention. In applying technology to workforce management, tools such as GPS, cameras, and timekeeping software may only be used when employees are fully informed and have given consent; data collected from these tools must not be used for other purposes without the employee’s approval. In the fields of finance, banking, and credit, credit information must not be used to assess creditworthiness without the data subject’s consent; only necessary data may be collected from lawful sources, and individuals must be notified in the event of a financial or credit data breach or loss. For data management on digital platforms, social networks and online communication services must not require users to submit images or videos of identity documents for account verification; they must offer options to refuse cookie collection and sharing, provide “do not track” settings, and must not eavesdrop, record, or read messages without user consent. Privacy policies must be publicly disclosed, and mechanisms must be provided for users to access, edit, delete their data, configure privacy settings, and report violations.

Regarding transitional provisions and incentives, small and startup enterprises may choose whether to comply with certain personal data processing impact assessment requirements during their first five years, except when engaging in personal data processing services, sensitive data, or large-scale data processing. Household businesses and micro-enterprises are exempt from these requirements, except in special cases.

2.4. Impact and Compliance Guidance for Enterprises

The Personal Data Protection Law 2025 sets high standards for data governance and information security, especially in recruitment, human resource management, and IT system operations. To ensure compliance, enterprises should review and update recruitment procedures, HR file management, and data storage and deletion practices. They must also train employees on their rights and obligations regarding personal data protection, establish clear privacy policies, and implement effective procedures for handling violations. IT systems must meet data protection requirements, particularly when transferring data abroad. Additionally, enterprises should proactively cooperate with competent authorities when requested to provide information or respond to data-related incidents.

3. Increase in Personal Income Tax Exemption and the Draft Personal Income Tax Law 2025

Effective from January 1, 2026, under Resolution No. 110/2025/UBTVQH15, the family circumstance deduction for personal income tax calculation will be significantly increased. Specifically, the deduction for taxpayers will rise to VND 15.5 million per month (equivalent to VND 186 million per year), and the deduction for each dependent will be VND 6.2 million per month. This marks a substantial increase compared to the previous levels of VND 11 million per month for the taxpayer and VND 4.4 million per month per dependent, reflecting changes in prices and income, and ensuring a minimum standard of living for taxpayers.

3.1. List of 21 Types of Personal Income Tax-Exempt Income

• Income from the transfer, inheritance, or gifting of real estate among family members (spouses, parents–children, grandparents–grandchildren, siblings).

• Income from the transfer of residential property or land use rights by individuals owning only one house or piece of land.

• Income from the value of land use rights allocated by the State.

• Income of households or individuals directly engaged in agriculture, forestry, fishery, salt production, or participating in cooperatives, large-scale farming, afforestation, or aquaculture.

• Income from the conversion of agricultural land allocated by the State for production.

• Income from interest on government bonds, bank deposits, and life insurance contracts.

• Income from remittances.

• The portion of wages for night shifts or overtime paid at a higher rate than daytime work; wages paid for unused leave days.

• Retirement pensions paid by the Social Insurance Fund, and income from supplementary or voluntary pension funds.

• Income from scholarships funded by the state budget or domestic/foreign organizations under educational promotion programs.

• Income from compensation under insurance contracts, work-related accidents, state compensation, and other compensations.

• Income received from recognized charitable or humanitarian organizations operating on a non-profit basis.

• Income from foreign aid for charitable or humanitarian purposes.

• Wages of Vietnamese seafarers working for foreign shipping companies or Vietnamese companies engaged in international transport.

• Income of shipowners, users, and crew members from providing goods and services for offshore fishing activities.

• Income from the first transfer of greenhouse gas emission reductions, carbon credits, and interest or transfer of green bonds.

• Wages from performing scientific, technological, or innovation-related tasks.

• Income from intellectual property rights of scientific or technological projects when commercialized.

• Income of individual investors, experts, and founders involved in innovative startups or venture capital funds.

• Wages of foreign experts working on non-refundable ODA projects, UN agencies in Vietnam, or UN peacekeeping forces.

• Post-corporate income tax profits of private business owners or single-member limited liability company owners.

3.2. Changes to the Progressive Tax Brackets

Under the Draft Personal Income Tax Law 2025, the progressive tax schedule for income from wages and salaries will be reduced from 7 brackets to 5. The income thresholds between brackets will be widened to simplify tax calculations and reduce the “bracket jump” effect, which can cause sudden increases in tax liability.

Compared to the current progressive tax schedule (7 brackets, with the highest rate applied to income over VND 80 million/month), the new structure reduces the number of brackets and widens the income thresholds, making it more favorable for taxpayers—especially those in the middle and upper-middle income groups.

3.3. Family deductions and dependents regulations

The family circumstance deduction will be increased to VND 15.5 million/month for the taxpayer and VND 6.2 million/month for each dependent, effective from the 2026 tax year. Dependents include minor children, children with disabilities who are unable to work, and individuals with no income or income below the threshold set by the Ministry of Finance—such as adult children pursuing higher education or vocational training, spouses unable to work, parents beyond working age or unable to work, and other individuals without support whom the taxpayer directly cares for.

3.4. Personal income tax on business income

Individuals with annual business revenue of VND 200 million or less will be exempt from personal income tax. For revenue between VND 200 million and VND 3 billion, tax rates will vary by industry, ranging from 0.5% to 5%. Revenue between VND 3 billion and VND 50 billion will be taxed at 17%, and revenue exceeding VND 50 billion will be subject to a 20% tax rate.

3.5. Other proposals and new points

The draft also proposes additional deductions for healthcare and education expenses incurred by taxpayers and their dependents. It recommends raising the personal income tax exemption for voluntary pension contributions to match the dependent deduction level, encouraging workers to participate in retirement savings independently and reduce reliance on the social insurance system. Other legal provisions related to labor, taxation, social insurance, and enterprise management are also included.

4. Amended Enterprise Law 2025 (Law No. 76/2025/QH15, effective from July 1, 2025)

The Amended Enterprise Law 2025 introduces and refines several key provisions to enhance corporate transparency, protect investor rights, and reduce administrative procedures for businesses.

A notable addition is the introduction of the concept of a “beneficial owner” — an individual who has actual ownership of charter capital or controlling rights over the enterprise. Businesses are required to collect, update, and retain information about beneficial owners and provide it to competent state authorities upon request. The list of beneficial owners must be declared in the enterprise registration dossier, in any amendments to registration details, and retained for at least five years after the enterprise is dissolved or declared bankrupt.

The law also clarifies definitions related to dividends, the market value of contributed capital or shares, and legal personal documents, ensuring consistency and transparency in business transactions and governance.

In terms of administrative procedures, several outdated requirements have been eliminated to reduce costs and processing time for businesses, thereby improving the investment and business environment.

Additionally, the law expands the scope of governance over civil servants and public employees working in state-owned enterprises, providing clearer definitions of their rights, obligations, and responsibilities in the performance of their duties.

5. Value Added Tax Law 2024 (effective from July 1, 2025)

The 2024 VAT Law introduces several key changes that directly affect businesses and household enterprises, especially in areas such as imports, promotional activities, e-commerce, and invoice management.

Regarding non-taxable items, the law removes certain goods such as fertilizers, agricultural machinery, and offshore fishing vessels from the exemption list. It also adds imported goods donated or sponsored for disaster relief, epidemic control, and wartime support to the non-taxable category.

The taxable value of imported goods is revised to include the customs value plus related taxes such as import duty, special consumption tax, and environmental protection tax.

For goods and services used for promotional purposes under commercial law, the taxable value is set at zero.

VAT rates for certain goods and services are adjusted. Some items such as fertilizers and fishing vessels move from non-taxable to a 5% tax rate. Others, including unprocessed forest products, sugar, and teaching equipment, shift from 5% to 10%.

The scope of the 0% VAT rate is expanded to include international transportation, overseas construction projects, goods sold in quarantine zones, and export services.

For VAT deduction eligibility, all purchased goods and services must be accompanied by non-cash payment documents, except for specific cases.

The law adds a provision for VAT refunds for businesses producing goods or providing services subject to the 5% rate, if their uncredited input VAT reaches VND 300 million or more after 12 months or 4 quarters.

Finally, the law clarifies tax obligations for foreign suppliers without a permanent establishment in Vietnam, digital platforms, and e-commerce marketplaces. These entities must withhold and remit taxes on behalf of sellers.

6. Abolishment of Construction Capacity Certificates

Starting from July 1, 2025, under new legal provisions, enterprises and organizations operating in the construction sector will no longer be required to obtain or renew construction capacity certificates. Instead, they must publicly disclose their actual capabilities and will be subject to post-inspection by state authorities.

This change marks a significant step in administrative reform, removing market entry barriers and reducing costs and time for businesses. Construction entities will no longer rely on administrative certificates to participate in bidding or project execution. Instead, they must demonstrate their competence through actual performance, professional reputation, and technical capacity.

Additionally, information about a company’s construction capacity will be made publicly available, enabling investors, regulators, and stakeholders to assess and select contractors more transparently and effectively.

7. Abolishment of Business License Tax

Starting from January 1, 2026, Vietnam will officially abolish the business license tax under Resolution No. 198/2025/QH15 passed by the National Assembly. This policy aims to reduce financial burdens on enterprises, especially small and medium-sized businesses, and to foster a more favorable business environment.

The removal of the license tax helps businesses save on fixed annual costs—particularly meaningful for micro and newly established enterprises. Previously, the license tax ranged from VND 1 to 3 million per year depending on charter capital or revenue, which posed a financial strain during the early stages of operation.

In addition, Resolution No. 68-NQ/TW also provides for a corporate income tax exemption for the first three years of operation for small and medium-sized enterprises, further encouraging entrepreneurship and private sector development.

Conclusion

The upcoming legal changes effective from 2026 mark a significant shift in Vietnam's business landscape, presenting both opportunities and challenges for enterprises. The regional minimum wage increase, the implementation of the Personal Data Protection Law, adjustments to personal income tax policies, along with a series of reforms in VAT, enterprise law, and administrative procedures, will profoundly impact management strategies, operations, and budgeting.

To maintain stable operations and ensure sustainable development, it is essential for Your Enterprise to proactively grasp this information, comprehensively assess potential impacts, and promptly implement appropriate internal adjustments. Thorough preparation starting now will not only ensure legal compliance but also help optimize costs, enhance competitive capacity, and effectively leverage incentive policies.

ALTAS's team of experts is always ready to support Your Enterprise in analyzing, providing detailed advice, and building an effective legal compliance roadmap, turning these changes into opportunities for outstanding growth.