Innovation boost for companies: State R&D funding of up to 80%!

Innovation boost for companies: State R&D funding of up to 80%!

As part of his speech during the 9th session of the 15th National Assembly on May 13, 2025, Vietnamese Science and Technology Minister Nguyen Manh Hung presented clear guidelines on the future of research and development (R&D) in companies. The focus of technology development is increasingly being placed on companies, with a new draft law on science, technology and innovation including policy measures to promote R&D and innovation in the corporate landscape for the first time. The aim is to significantly increase investments in these areas.

Government support for companies' R&D activities is to increase from the current 10% to 70 to 80%. Companies are encouraged to invest their own resources in R&D, which is made even easier by government support. Minister Nguyen Manh Hung explained that for every VND spent, the state collects VND 3 to 4 from companies, highlighting the need to increase the R&D share of sales from currently only 1%. In addition, companies whose R&D expenses are deductible without a maximum limit are allowed to claim these as production and operating costs.

Latest initiatives to support businesses

In connection with the legal situation, a proposal was also formulated to supplement Article 66 with special incentives. One of the central ideas is exemption from loan interest for the first three to five years. It is also planned to introduce a mechanism for innovation vouchers to make it easier for companies to use the services of research institutes and universities. Meanwhile, delegate Tran Thi Nhi Ha criticized the Science and Technology Development Fund's maximum deduction of just 5% and advocated for an increase to up to 15% of taxable income.

Small and medium-sized enterprises (SMEs) play a crucial role in the innovation landscape. As explained in a new guide to research and innovation funding in the Federal Republic of Germany, SMEs often have difficulties financing their own research projects. This significantly limits their ability to innovate. The guide offers comprehensive information as well as funding tips and a checklist for support in these areas. It is based on the experiences of the federal government's “Research and Innovation” funding advisory service and is 16 pages long.

The importance of R&D financing

Other proposals include the need for specific financing mechanisms for SMEs, including flexible financing instruments such as guarantees, start-up capital loans or preferential interest rates. Delegate Sung A Lenh emphasized the urgency of taking measures to support the training of internal professionals and the recruitment of talent. It is clear that consistent support for R&D development is urgently needed to meet the challenges of technological advancement.

The incentives and policies created in Vietnam to promote companies' R&D activities could play a crucial role in transforming the national innovation landscape. With the right financial support and a clear strategy, Vietnam may be able to make the leap to an increasingly innovation-driven economic model.

For further information on research and innovation funding in Germany, visit the BMBF website here. Additional details about the innovation-promoting measures in Vietnam can be found at this page.