Digital Transformation in Vietnam: A Remarkable Leap Towards Innovation and Intellectual Property Protection in 2025

 This article provides a comprehensive overview of key developments shaping digital transformation in Vietnam and its impact on foreign businesses, technology companies, and e-commerce players.

Vietnam’s Rise in the Global Innovation Index 2024

Vietnam’s commitment to fostering innovation and intellectual property protection is reflected in its steady rise in the Global Innovation Index (GII) 2024, published by the World Intellectual Property Organization (WIPO) in September 2024. The country moved up two places to 46th out of 132 economies, solidifying its position as one of the most innovation-driven developing nations showcasing progress of digital transformation in Vietnam.

Why Vietnam’s GII Ranking Matters for Foreign Investors

The GII evaluates economies based on key indicators such as:

- Research and development (R&D) investment

- University-industry collaboration

- Technology exports

- Intellectual property filings

- Digital transformation and knowledge-based industries

Vietnam has made substantial improvements in these areas, particularly in technology and science-driven sectors. The country’s rising innovation capabilities signal a more favorable business climate for foreign companies looking to invest in digital infrastructure, AI, fintech, and smart manufacturing.

Resolution No. 57: A Game Changer for Vietnam’s Science, Technology, and Digital Transformation

To reinforce its commitment to technology-driven economic growth, Vietnam’s government issued Resolution No. 57-NQ/TW in June 2024. This policy focuses on accelerating digital transformation in Vietnam, enhancing science and technology development, and strengthening intellectual property rights.

Key Objectives of Resolution No. 57:

- Encouraging R&D and innovation by offering tax incentives and grants for technology startups, AI research, and green energy solutions.

- Strengthening the role of science and technology enterprises in economic development.

- Integrating digital transformation into public and private sectors, including blockchain, cloud computing, and IoT (Internet of Things).

- Creating an investor-friendly legal framework to attract foreign direct investment (FDI) in high-tech industries.

By aligning with global digital transformation trends, Vietnam aims to become a regional leader in technological innovation. This policy presents immense opportunities for foreign businesses specializing in AI, big data, cyber security, and automation.

Copyright Protection in Vietnam’s Digital Economy

As digital transformation in Vietnam accelerates, concerns about copyright infringement and IP violations have grown, especially in the e-commerce and media industries. To strengthen copyright protection, the Vietnamese government has introduced stricter IP laws and enforcement mechanisms.

Key Measures to Enhance Copyright Protection:

- Amendments to Vietnam’s Intellectual Property Law, effective January 2025, include stricter penalties for online copyright violations.

- New regulations requiring digital platforms to implement stronger anti-piracy measures.

- Increased cooperation with global organizations like WIPO and ASEAN IP authorities to combat IP theft.

- Expansion of Vietnam’s IP enforcement teams to monitor online infringement cases.

For foreign companies in the digital content, entertainment, and software industries, these initiatives offer greater security in protecting copyrighted works, patents, and trademarks.

Counterfeit Goods: A Persistent Challenge in Vietnam’s E-Commerce Market

Vietnam’s e-commerce market, valued at over $26 billion in 2024, has become one of the fastest-growing digital economies in Southeast Asia. However, this growth has also led to an alarming increase in counterfeit goods, particularly on major online platforms like Shopee, Lazada, and TikTok Shop.

1.The Scope of Counterfeit Goods in Vietnam:

Reports indicate that fake luxury goods, pharmaceuticals, cosmetics, and electronics are widely available on social media marketplaces and e-commerce websites. This poses a significant threat to consumer safety and brand reputation, particularly for foreign businesses expanding into Vietnam’s online retail sector.

2.Government Efforts to Curb Counterfeit Products:

To address this issue, Vietnam’s Ministry of Industry and Trade (MoIT) has:

- Implemented stricter regulations requiring e-commerce platforms to verify sellers’ identities.

- Increased fines and criminal charges for selling counterfeit goods online.

- Strengthened cross-border cooperation with international brands to take down counterfeit listings.

- Launched public awareness campaigns to educate consumers about the risks of fake products.

For foreign companies operating in Vietnam, brand protection strategies such as trademark registration, digital monitoring, and legal action are essential to safeguard business interests.

Digital Transformation in Vietnam: A Gateway for Foreign Businesses

The ambitious initiatives of digital transformation in Vietnam have positioned the country as a leading investment destination for global technology firms and startups. The government’s focus on enhancing digital infrastructure, cybersecurity, and artificial intelligence (AI) presents lucrative business opportunities.

Key Investment Sectors Enjoying digital transformation in Vietnam for Foreign Businesses:

1. Fintech and Digital Banking – With cashless transactions growing by 35% annually, Vietnam is a high-potential market for fintech startups, mobile payment providers, and blockchain developers.

2. Artificial Intelligence (AI) and Automation – Resolution No. 57 prioritizes AI development, creating demand for AI-driven solutions in healthcare, logistics, and smart cities.

3. E-commerce and Logistics – Vietnam’s e-commerce boom has increased demand for digital payment solutions, supply chain optimization, and warehouse automation.

4. Cybersecurity and Data Protection – As businesses transition to cloud-based operations, investment in cybersecurity services, fraud detection, and AI-driven risk management is essential.

Why Foreign Investors Should Consider Initiatives of Digital Transformation in Vietnam

1.Strong Economic Growth and FDI-Friendly Policies

Vietnam’s GDP is expected to grow by 6.5% in 2025, making it one of the most resilient economies in Asia. The government’s pro-business reforms include:

- Tax incentives for technology firms

- Favorable regulations for foreign ownership

- Trade agreements such as CPTPP, RCEP, and EU-Vietnam FTA

2.Skilled Workforce and Competitive Labor Costs

Vietnam boasts a young, tech-savvy workforce, with highly skilled engineers in AI, data science, and software development. Compared to neighboring countries, Vietnam offers lower operational costs, making it an attractive location for setting up R&D centers.

3.Strategic Location for Regional Expansion

Vietnam serves as a gateway to ASEAN markets, providing seamless access to Singapore, Thailand, Indonesia, and China. For foreign tech firms and e-commerce companies, Vietnam is an ideal hub for regional expansion.

Conclusion: Digital Transformation in Vietnam, The Future is Bright

The progress of digital transformation in Vietnam, intellectual property protection, and e-commerce regulation demonstrates its commitment to creating a world-class business environment. With the implementation of Resolution No. 57, stronger copyright enforcement, and a crackdown on counterfeit goods, Vietnam is evolving into a secure and innovation-driven economy.

For foreign investors and businesses looking to expand in Southeast Asia, Vietnam presents unmatched opportunities in technology, e-commerce, and high-growth digital sectors. By leveraging Vietnam’s pro-innovation policies and initiatives of digital transformation in Vietnam, companies can capitalize on the country’s dynamic growth and investment potential.

Final Thought

As Vietnam continues to enhance its intellectual property framework and digital infrastructure, foreign businesses must stay informed and engage with local experts to navigate the evolving legal landscape effectively. Investing in digital transformation in Vietnam journey today will ensure long-term success in one of the most promising markets in Asia.

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Vietnam Company Formation. How to proceed?

 Foreign investors may invest in the form of 100% capital to establish company in Vietnam, being limited liability company, joint stock company, partnership company.  Vietnam company formation has been getting easier due to the openness policy of Vietnam government in the recent years. 

Foreign investors that invest in Vietnam for the first time must have investment projects and fill in investment registration or examination procedures at state agencies in charge of investment in order to be granted investment registration certificates.

Company with 100% foreign capital has founded and operated from the date of issuance of the investment certificate and enterprise registration certificate.

Vietnam company formation dossiers

A dossier to establish company in Vietnam shall comprise more than 10 types of documents to name below:

-Registration/Request for issuance of Investment Certificate;

-A report on financial capability of the investor;

-Draft of the company’s charter;

-List of members of company;

-Copy of the people’s identity card, passport or other lawful personal certification, for individual members;

-Copy of the establishment decision, business registration certificate or other equivalent document, for member organizations;

-Copies of the authorization document, the people’s identity card, passport or other lawful personal certification, for authorized representatives.

-Copies of the business registration certificates of the foreign member organizations must be authenticated within three months before the date of submission of the business registration dossier by agencies where such organizations are registered;

-Written authorization of the investor in case investor is organization and valid copy of the lawful personal certification of the authorized representative. Documents in foreign languages must be translated into Vietnamese, notarized and legalized;

-The joint-venture contract or Business Cooperation Contract (BCC);

-Other documents required by Vietnam law.

The Vietnam company formation at investment registration process would take around 30 days. The extra time might be needed in case the investment area is conditional or the State government needs to examine the investment project.

Minimum capital, special licenses or other conditions might be required in certain investment projects.

5 Steps Guide to Register Company in Vietnam

How a law firm in Vietnam would help with Vietnam company formation?

With professional English speaking staff and experience in foreign investment, diligent lawyers would be able to support clients with Vietnam company formation.

While the process of Vietnam company formation is straight forward most of the time, there are many situations which it would be better that the client engages a law firm in Vietnam to assist with document preparation, legal translation, notarization, and authentication of application dossiers.  

The lawyers at law firm in Vietnam could also assist with market entry legal advice for strategic decision since the rental of office, work site might impact the business. Employment matters of the company also requires compliance from the beginning. Mandatory submissions of report are also part of the compliance process to follow.  Tax declaration should be done and other investment reporting should be correct at the start of the business. 

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How a Foreign Company Apply for Certificate of Origin in Vietnam?

 

Benefits to Apply for Certificate of Origin in Vietnam with Vietnam Origin

Vietnam has growing fast due to the opening policy of the government, and been signing a number of free trade agreements with EU, ASEAN, China, Korea, Japan, India, Australia, New Zealand, Chile, Russia, Belarus… with effectiveness. Having said that, Vietnam has become a destination for foreign investors to set up factory and set up company in Vietnam to undertake manufacturing for export, meet the conditions, follow the follow to apply for Certificate of Origin in Vietnam and enjoy tax preference because of Vietnam origin.

Requirements to apply for Certificate of Origin in Vietnam

The applicant wishing to be apply for Certificate of Origin in Vietnam (“C/O”) needs to register the trader profile under Vietnam regulations before submitting the dossier to apply for Certificate of Origin in Vietnam (“C/O”).

There are steps to be followed at the State authorities to check the trader profile, its legal registration in Vietnam, manufacturing facilities that produce the goods which are subject of C/O to apply for Certificate of Origin in Vietnam.

Further, additional information and proof will be required for verification at Vietnam State Authorities including the declaration of origin provided by manufacturer or supplier of originating materials or locally produced originating goods if such material is used in subsequent stage to produce another good, good manufacturing process.

Not only checking the documents, the authority could undertake an inspection visit to the manufacturing facility of trader and request the applicant to submit evidence of customs declaration of materials imported and used in production of exported goods (if imported materials are used in the production process); a sale contract or VAT invoice of locally purchased materials (if locally purchased materials are used in the production process) and other documents as deemed necessary to apply for Certificate of Origin in Vietnam.

If the documents, the process, and the conditions are met, the Vietnam Certificate of Origin (“C/O”) will be issued.

Requirements to qualify for non-preferential goods

In general, an originating good is a good which is originating in a country, group of countries, or territory where the last processing operation is performed and substantially transforms such good. To qualify for non-preferential goods, there will be requirement of:

1.“Change in tariff classification” (hereinafter referred to as CTC):

CTC means a change in two-digit, four-digit, or six-digit HS heading of a good as compared with the HS heading of non-originating materials (including imported materials and materials of undetermined origin) used for the production of such good.

2.“Local value content” (hereinafter referred to as LVC)

The applicant for C/O shall choose either direct formula or indirect formula at their own discretion to calculate LVC and apply the chosen formula throughout such financial year. The verification and identification of LVC criteria for exported goods of Vietnam shall be based on the aforesaid formula.

In order to calculate LVC according to the formula, value of materials and cost incurred in the production process of goods shall be determined as follows:

a) “Value of materials originating in a country, group of countries, or territory of production” is inclusive of CIF value of materials acquired or locally produced that are originating in a country, group of countries, or territory; direct labor cost, overhead cost, other costs and profits.

b) “Value of materials originating in a country, group of countries, or territory of production” is CIF value of materials imported that are originating in a country, group of countries, or territory; or the earliest ascertained price stated in the VAT invoices associated with materials of unidentifiable origin used for the production, processing of ultimate product.

c) “FOB” is the value stated in the export contract which is calculated as follows: “FOB = Ex-workshop price + other costs”.

-“Ex-workshop price” = Production cost + profit;

-“Production cost” = material cost + direct labor cost + overhead cost;

-“Material cost” covers expenses associated with purchase of materials, their cost of freight and insurance;

-“Direct labor cost” covers wages, bonuses and other welfare amounts related to the production process;

-“Overhead cost” covers:

Overhead cost relates to production process (insurance for buildings, factory rents and hire-purchase cost, depreciation of buildings, repairs, taxes, collateral interests);

hire-purchase cost and interests of factories and equipment;

factory security;

insurance (for factories and equipments used in the production process);

expenses for essentials for production process (energy, electricity and other essentials to be used directly in the production process);

research, development, design and workmanship; pressing molds, moulds, devices and amortization, maintenance and repairs of factories and equipment;

patent royalties (in respect of patented machines or use of patented machines in production process or goods production licenses);

testing of materials and goods; storage in factories; waste treatment;

cost factors in calculating value of materials, such as port-related cost, good clearance and import duties on taxable components;

-“Other costs” are the costs incurred in placing the good in the ship or other means of transport for export including, but not limited to, domestic transport costs, storage and warehousing, port handling, brokerage fees, service charges and relevant costs incurred when loading goods onboard ships for export.

The applicant shall follow the procedures and provide the proof of meeting conditions to apply for Certificate of Origin in Vietnam.  If the goods that do not qualify to be issued Certificate of Origin in Vietnam, it can not be granted Vietnam C/O. Any violations of laws will be punished by the government.

It appears that many manufacturers are in the process to relocate significant manufacturing process to Vietnam to enjoy “Made-in-Vietnam” and apply for Certificate of Origin in Vietnam.

In the meantime, alarmingly, there are equal number of other manufactures whom wish to only transfer a small portion of manufacturing process to Vietnam i.e re-packaging, re-labeling which does not meed to qualifications above to apply for Certificate of Origin in Vietnam.

It is important that Vietnam authorities to alert and constantly monitor the process to apply for Certificate of Origin in Vietnam to ensure all responsible departments, officers to follow the rule as set by law to evaluate the C/O application documents, and proof given by trader, manufacturer carefully.

By doing that, Vietnam government will encourage the “real” transition of manufacturing from China to Vietnam, therefore increasing FDI, boosting the economy through encouraging manufacturing sectors.  

By urging customs authority to investigate and punish violators, the Vietnam government is sending strong message to US that Vietnam is not standing to support unfair trade, and in the meantime take advantage of the situation to attract quality manufacturing projects to set up factory in Vietnam and such quality exporters could apply for Certificate of Origin in Vietnam with Vietnam origin and enjoy tax preference. 

How can we help clients to apply for Certificate of Origin in Vietnam?

As a law firm in Vietnam in international trade, we have been actively providing legal services through advisory to manufacturers on the C/O matters in particular the process to apply for Certificate of Origin in Vietnam, and assisting a number of investor to set up manufacturing company, review leasing contract at industrial zone as part of the process to transition manufacturing into Vietnam to seriously invest and do business taking advantage of origin, labour, opening policy of Vietnam government.

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