Vietnam to abolish business license tax in 2026 to support companies

Vietnam will abolish the business license fee for all enterprises and household businesses beginning Jan. 1, 2026, a move aimed at reducing the financial burden on the private sector.

The General Department of Taxation confirmed the policy in Official Dispatch No. 645/CT-CS, issued Jan. 23. The decision follows Resolution No. 198/2025/QH15, which the National Assembly passed in May 2025 to stimulate private economic growth.

The government later finalized the regulations in Decree No. 362/2025/ND-CP, issued in late December 2025. All previous decrees regarding the business license fee have been rendered void.

Under the new guidelines, taxpayers are exempt from paying the fee for 2026 and subsequent years. They are also no longer required to file annual license fee declarations.

While the new policy eliminates future charges, tax authorities noted that any outstanding license fees owed from 2025 or earlier will still be collected. Local tax offices have been directed to launch public awareness campaigns to inform taxpayers of the changes.

Government officials described the move as part of a broader push for administrative reform and a strategy to lower operating costs for Vietnam’s private economy.

HANOI — Vietnam’s decision to abolish its long-standing annual business license fee represents a strategic, albeit largely symbolic, effort to trim the regulatory overhead that has long weighed on the country's private sector.

The fee, essentially a fixed annual levy, has historically been a negligible line item for medium and large-scale enterprises. However, for micro-businesses, sole proprietorships, and the country’s burgeoning startup ecosystem, the repeal—combined with the elimination of its accompanying filing requirements—removes a persistent administrative bottleneck.

The primary dividend of this policy shift is not found in the capital saved, but in the reduction of compliance costs. By stripping away a layer of bureaucracy, the government is effectively mitigating the risk of administrative penalties that often arise from minor filing delays. This move serves as a pragmatic, if incremental, improvement to a business environment frequently criticized for its procedural density.

Set for implementation in 2026 following a 2025 policy pivot, the measure signals a consistent pro-growth stance from Hanoi. It aligns with a broader suite of tax incentives and deregulatory efforts aimed at revitalizing the domestic private sector.

However, viewed through a structural lens, the reform remains a marginal gain. While the removal of the license fee eases the entry point for new businesses, it does not address the more formidable barriers to growth in the Vietnamese market: constrained access to credit, regulatory opacity, and the persistent burden of "informal costs." While the policy makes the act of starting a business slightly more palatable, it is a refinement of the existing framework rather than a transformative catalyst for the broader economy.

For Vietnamese-Americans looking to invest or launch a new venture in Vietnam, this change removes one of the most common administrative hurdles. While the business license fee itself is a minor expense, eliminating the annual filing requirement streamlines operations and cuts through unnecessary red tape, providing much-needed simplicity for those in the critical startup phase.