WHAT HAPPENED
Vietnam’s Ministry of Finance has put forward a significant initiative capable of substantially changing the landscape for small and medium-sized businesses, including foreign players operating in the local market. According to the latest proposal, individual entrepreneurs and family businesses whose annual income does not exceed 10 billion VND (equivalent to approximately 381,000 USD at the 2026 exchange rate) will be eligible for a 30% reduction in Personal Income Tax (PIT). This relief will be effective throughout 2026 and 2027, providing significant incentives for growth and development.
The initiative aims to support entrepreneurial activity and reduce the administrative burden on micro and small businesses, which form the backbone of the Vietnamese economy. The increase in the tax threshold and the accompanying reduction in the tax rate demonstrate the government's commitment to creating more favorable conditions for the development of the domestic market, as well as attracting foreign investment and expertise, especially in the fast-growing e-commerce sector.
Thus, Vietnam continues its policy of economic liberalization and creating a competitive environment where entrepreneurs can count on state support. For Russian companies considering expansion opportunities, this creates new, highly attractive conditions for entering and establishing themselves in one of Southeast Asia's most dynamic markets.
WHAT THIS MEANS
For Russian manufacturers and online sellers aiming to diversify supply chains and scale their businesses, the change in Vietnam's tax threshold opens a window of unique opportunities. The reduction in the tax burden for businesses with a turnover of up to $381,000 makes the Vietnamese market significantly more attractive for companies at the entry or active growth stage. This directly impacts pricing, allowing them to offer more competitive prices or maintain higher margins at current prices.
Simplifying the tax regime can significantly lower market entry barriers. Russian e-commerce players offering a wide range of goods—from consumer products to specialized electronics or food—can now more confidently consider Vietnam as a key hub for regional expansion. This is especially relevant for those planning to start with relatively small volumes, testing the market and gradually building their presence.
The impact on logistics should also not be underestimated. A reduction in local tax burden frees up funds that can be reinvested in optimizing supply chains, establishing local warehouses, or partnering with local fulfillment centers. This is critically important for ensuring fast and efficient delivery, which is one of the main success factors in e-commerce. Moreover, it can incentivize Russian manufacturers to localize part of their production or assembly in Vietnam to further reduce logistics costs and lead times.
Furthermore, this measure fosters increased competition in the Vietnamese e-commerce market, which ultimately benefits consumers. Russian companies, known for their high-quality products and efficient business models, now gain an additional advantage that will help them stand out among local and international competitors. This also creates conditions for closer economic cooperation between Russia and Vietnam, opening new channels for bilateral trade and investment.
VIETSMART EXPERT COMMENTARY
The change in Vietnam’s tax policy is not just a minor amendment; it is a strategic step that Russian entrepreneurs should carefully analyze. At VietSmart, we view this as a direct invitation for companies ready to flexibly respond to changing economic realities and seek new growth points. This is an ideal moment for pilot projects and testing new product categories in the Vietnamese market. However, it is crucial to approach this with a clear strategy, understanding not only the tax benefits but also the cultural, regulatory, and logistical specifics of the market.
Our advice: use this period to actively study local demand, form partnerships, and build an efficient logistics infrastructure. This will not only allow you to maximize the benefits of current tax incentives but also lay the groundwork for a long-term and sustainable market presence. Do not view this opportunity as a short-term gain; rather, it is a springboard for strategic scaling.
CONCLUSIONS AND WHAT TO DO
- Study the market and demand: Conduct in-depth research into consumer preferences in Vietnam. Identify niche products or product categories that may be in high demand but currently lack sufficient supply. Consider cultural specifics and price sensitivity.
- Develop an entry strategy: Determine whether you will enter the market through your own online platforms, local marketplaces (e.g., Shopee, Lazada), or partnership with local distributors. Keep in mind that partnership can help you adapt faster to local conditions and leverage tax advantages.
- Optimize logistics: Given the potential tax savings, invest in logistics solutions. Consider establishing mini-warehouses or collaborating with local fulfillment centers to reduce delivery times and improve customer satisfaction.
- Adapt pricing policy: Use the reduced tax burden to adjust your pricing strategy. This could involve lowering prices to increase market share, or maintaining current prices to boost profitability and reinvest in development.
- Examine legal aspects: Be sure to consult with lawyers regarding local legislation, e-commerce regulations, and tax obligations. While the proposed PIT reduction is favorable, it is important to understand all the nuances of doing business in Vietnam to avoid unforeseen risks.
Source: VnEconomy EN — Business from August 9, 2026