Vietnam has long been recognized as one of Southeast Asia's most attractive investment destinations. Competitive labor costs, strong manufacturing capabilities, strategic trade agreements, and investment incentives have helped attract multinational companies from around the world.

However, the introduction of the Global Minimum Tax (GMT) has sparked a new question among investors:

Is Vietnam losing its tax advantage?

The answer is more nuanced than many headlines suggest.

Understanding Vietnam's Global Minimum Tax

Vietnam officially implemented the Global Minimum Tax framework under Resolution No. 107/2023/QH15, effective from January 1, 2024.

The regulation aligns with the OECD's Pillar Two initiative, which aims to ensure that large multinational enterprise (MNE) groups pay a minimum effective tax rate of 15%, regardless of where they operate.

The rules generally apply to multinational groups with consolidated annual revenue of at least EUR 750 million in two of the previous four fiscal years.

Importantly, the Global Minimum Tax does not affect all businesses operating in Vietnam. Small and medium-sized enterprises, as well as many foreign-invested companies, remain outside its scope.

What Has Changed for Large Multinational Groups?

Historically, some multinational companies benefited from investment incentives that significantly reduced their effective corporate tax burden.

With the implementation of the Global Minimum Tax, qualifying multinational groups may now be required to meet a minimum effective tax rate of 15%.

As a result, tax incentives alone may no longer provide the same level of competitive advantage for large global corporations as they once did.

This development has led some investors to question whether Vietnam will remain an attractive destination for expansion.

Why Vietnam Remains Competitive

While tax incentives have traditionally played an important role in investment decisions, they represent only one part of a much larger picture.

Vietnam continues to offer several strategic advantages that remain highly attractive to global businesses.

1. Strong Manufacturing Ecosystem

Vietnam has established itself as a key manufacturing hub in Southeast Asia, particularly in electronics, consumer goods, and industrial production.

A mature supplier network and growing industrial infrastructure continue to support large-scale operations.

2. Strategic Regional Location

Situated at the heart of Asia-Pacific supply chains, Vietnam offers convenient access to major regional and global markets.

This geographic advantage remains a significant factor for companies seeking supply chain diversification.

3. Skilled and Growing Workforce

Vietnam's workforce continues to expand, supported by increasing levels of education and technical training.

For many employers, talent availability is just as important as tax considerations.

4. Extensive Trade Agreements

Vietnam maintains one of the most comprehensive networks of free trade agreements in the region, providing businesses with improved market access and export opportunities.

5. Continued Support for Diversification Strategies

As companies pursue broader regional diversification and resilience strategies, Vietnam remains a key destination for manufacturing and operational expansion.

The Real Question Investors Should Ask

The conversation surrounding Vietnam is gradually shifting.

Instead of asking:

"How low can the tax rate go?"

Many companies are now asking:

"How strong is the overall business ecosystem?"

Factors such as talent availability, infrastructure, supply chain maturity, regulatory stability, and market access are becoming increasingly important in long-term investment decisions.

Final Thoughts

The introduction of the Global Minimum Tax marks an important change in the international tax landscape.

However, it would be inaccurate to conclude that Vietnam has suddenly become less attractive for foreign investment.

For many global companies, Vietnam's value proposition extends far beyond tax incentives.

As investment decisions become more strategic and long-term focused, the country's manufacturing capabilities, workforce, and regional connectivity continue to make it a compelling destination for expansion in 2026 and beyond.