FDI ATTRACTION TO VIETNAM IN THE CONTEXT OF THE GLOBAL MINIMUM TAX IMPLEMENTATION
Published
How to Cite
Issue
Section
DOI:
https://doi.org/10.63640/3030-4091/jpd.apd.174Keywords:
Global Minimum Tax; Foreign Direct Investment; Tax Incentives; Institutional Quality; Policy Shock; VietnamAbstract
This paper examines the implications of the global minimum tax (GMT) for Vietnam's attraction to foreign direct investment (FDI) within the context of international financial integration. Drawing upon the extant theoretical framework and identified research gaps, this study proposes an analytical framework comprising three factor groups: (i) tax policies and investment incentive mechanisms; (ii) the institutional and investment environment; and (iii) the strategic responses of FDI enterprises. The findings indicate that while GMT implementation erodes the efficacy of low tax rate incentives – a conventional attraction tool – it simultaneously impels Vietnam to restructure its investment attraction model towards one based on quality, transparency, and sustainability. The paper recommends three primary policy directions: (1) developing a new generation of performance-based incentives; (2) strengthening institutional capacity and enhancing the investment climate; and (3) supporting FDI enterprises in their adaptation while promoting domestic value chain integration. This research contributes to clarifying the multi-faceted impact mechanisms of the GMT and provides policy implications for Vietnam in the emerging "post-tax incentive" era.
References
Blomstrom, M., & Kokko, A. (2003). The Economics of Foreign Direct Investment Incentives. NBER Working Paper Series, 9489. https://doi.org/10.3386/w9489.
Devereux, M. P., & Vella, J. (2023). Implications of the global minimum tax for investment and tax competition. Oxford University Centre for Business Taxation.
Dunning, J. H., & Lundan, S. M. (2008). Multinational enterprises and the global economy (2nd ed.). Edward Elgar Publishing.
EY Vietnam. (2024). Vietnam’s tax readiness under the Global Minimum Tax framework. Hanoi: Ernst & Young Vietnam.
General Statistics Office of Vietnam (GSO). (2026). Socio-economic situation in the fourth quarter of 2025. Retrieved from https://www.nso.gov.vn/en/data-and-statistics/2026/01/socio-economic-situation-in-the-fourth-quarter-and-2025.
Globerman, Steven & Shapiro, Daniel. (2002). Global Foreign Direct Investment Flows: The Role of Governance Infrastructure. World Development. 30(11). 1899-1919. https://doi.org/10.1016/S0305-750X(02)00110-9.
Government of Vietnam. (2025). Decree No. 236/2025/NĐ-CP of the Government: Detailing several articles of the National Assembly's Resolution No. 107/2023/QH15 dated November 29, 2023, on the application of supplementary corporate income tax in accordance with the Global Anti-Base Erosion rules. Hanoi.
International Monetary Fund (IMF). (2024). Global fiscal policy monitor: Implementing the global minimum tax in developing economies. Washington, DC: IMF.
Kaufmann, D., Kraay, A., & Mastruzzi, M. (2010). The Worldwide Governance Indicators: Methodology and analytical issues. Washington, DC: World Bank Group.
Klemm, A., & Van Parys, S. Empirical evidence on the effects of tax incentives. International Tax Public Finance 19, 393–423 (2012). https://doi.org/10.1007/s10797-011-9194-8.
KPMG. (2024). Pillar Two readiness in Asia: Policy responses and incentive shifts. https://assets.kpmg.com/content/dam/kpmgsites/xx/pdf/2025/06/pillar-two-and-tax-incentives-may-2025.pdf.
Le Quoc Hoi et al. (2024). The impact of the Global Minimum Tax on Vietnam's foreign investment attraction policy. Journal of Economics and Development, (322), 45–56. https://doi.org/10.1016/j.aglobe.2024.100090.
Ministry of Finance (Vietnam). (2024). Report on the status of foreign direct investment attraction in 2024. Retrieved from: https://www.mpi.gov.vn/portal/Pages/2025-1-6/Tinh-hinh-thu-hut-dau-tu-nuoc-ngoai-nam-2024-5ihdt0.aspx.
Morisset, J., & Pirnia, N. (2000). How tax policy and incentives affect foreign direct investment: A review (Policy Research Working Paper No. 2509). Washington, DC: World Bank. http://hdl.handle.net/10986/19742.
Nguyen Van Phung. (2023). Impact of the Global Minimum Tax on Vietnamese enterprises. Finance Journal, (6), 15–20.
North, D. C. (1990). Institutions, institutional change, and economic performance. Cambridge University Press.
OECD. (2015). Policy framework for investment 2015 edition. Paris: OECD Publishing.
OECD. (2023). OECD Economic Surveys: Viet Nam 2023. Retrieved from https://www.oecd.org/content/dam/oecd/vi/publications/reports/2023/04/oecd-economic-surveys-viet-nam-2023_8d886a88/7f5fe56b-vi.pdf.
OECD. (2024). Global Anti-Base Erosion (GloBE) Rules: Implementation handbook. Paris: OECD Publishing. https://www.oecd.org/en/topics/sub-issues/global-minimum-tax/global-anti-base-erosion-model-rules-pillar-two.html.
OECD. (2025). Peer review report on transitional Qualified Domestic Minimum Top-up Taxes. Paris: OECD Publishing.
The National Assembly. (2013). Law No. 32/2013/QH13: Law amending and supplementing several articles of the Law on Corporate Income Tax, dated June 19, 2013.
