According to Deputy Minister of Science and Technology Bui Hoang Phuong, the Vietnamese government will become the largest customer of digital transformation through state-backed procurement and assigned missions.

On December 11, 2025, the National Assembly passed the Digital Transformation Law, with 433 out of 442 members voting in favor. The law will take effect on July 1, 2026.

The law outlines the principles, policies, coordination mechanisms, and responsibilities of government agencies, organizations, and individuals in digital transformation. It also clearly defines the core areas of digital government, digital economy, and digital society.

While fields such as data, electronic transactions, cybersecurity, telecommunications, and artificial intelligence remain governed by their respective laws, all must conform to the overarching principles and requirements of this law.

During a press conference on December 31, 2025, the Ministry of Science and Technology emphasized that the law establishes a unified legal framework for building a digital nation. It aims to address the challenges of investing in unprecedented technological products, with the government now defined as the main customer driving digital development.

Deputy Minister Phuong highlighted that although digital transformation has long been discussed, legal texts had yet to clearly define the concept.

This law now provides clear legal definitions and a framework for digital transformation activities, enabling the government to develop supportive mechanisms and incentive programs.

A framework law for a digital nation

Tran Quoc Tuan, Head of Investment Management at the National Digital Transformation Department, described the law as a “framework law” or “umbrella law.”

Vietnam already has sectoral laws such as the Electronic Transactions Law, Telecommunications Law, and Cybersecurity Law. The Digital Transformation Law serves to connect these scattered pieces into a cohesive whole, adding missing elements like digital government, digital economy, and digital society, and creating national-level coordination mechanisms.

Spanning 8 chapters and 48 articles, the law avoids repeating specialized regulations. Instead, it focuses on principles, policies, and implementation guarantees.

Significantly, it introduces vital macro-coordination tools, including the National Digital Transformation Strategy, the National Digital Architecture Framework, and the Data Governance Framework.

One major highlight is the financial commitment. The law mandates that no less than 1% of the annual state budget be allocated to digital transformation.

“This is a strong political commitment for the years ahead,” said Mr. Tuan. The law also includes regulations on digital workforce development.

Empowering SMEs to “stand on the shoulders of giants”

The law brings sweeping changes to investment and market support mechanisms.

“One of its key directions is to facilitate digital transformation by positioning the state as the largest customer, through procurement and task assignment,” said Deputy Minister Phuong.

Importantly, the law removes a long-standing bottleneck in technology investment: the lack of a payment mechanism for experimental projects.

Mr. Tuan added that the law allows for experimental development of systems or products “not yet available on the market and without precedent” - items that are hard to price or define in scope.

From a technical perspective, the law mandates a shift in design thinking - from passive, one-way IT systems to smart, proactive digital systems that anticipate and support human needs.

For the business community, especially small and medium enterprises (SMEs), the law creates three major drivers:

First, it reduces compliance costs by restructuring administrative procedures and adopting full-process digital governance and default data-sharing mechanisms.

Second, the law introduces a regulatory sandbox, allowing for controlled testing of new models and solutions.

Third, it provides infrastructure support, enabling businesses - especially SMEs - to connect with and utilize national digital platforms funded by the government.

“This mechanism lets SMEs ‘stand on the shoulders of giants’ and leverage existing infrastructure,” Mr. Tuan said.

Collectively, these provisions aim to build a transparent digital governance framework and create an attractive investment environment for both domestic and international enterprises.

Du Lam