This study examines the role and effectiveness of tax incentives in attracting foreign direct investment (FDI) to Vietnam during the 2015–2025 period, drawing on an analysis of tax and investment policies, legal frameworks, official reports, and international studies. The findings indicate that tax incentives have contributed to enhancing Vietnam’s investment attractiveness, particularly for large-scale and high-technology projects, as well as projects operating in priority sectors and locations. In 2024, Vietnam attracted USD 38.23 billion in registered FDI, while disbursed FDI reached USD 25.35 billion; the FDI sector accounted for approximately 72% of the country’s total exports. However, the scale of FDI has not been accompanied by commensurate spillover effects. The share of foreign value added in exports increased from 36% in 2005 to 48% in 2020, reflecting substantial reliance on imported inputs and persistent limitations in linkages with domestic enterprises. The study argues that the effectiveness of tax incentives depends not only on the generosity of the incentives themselves but also on the quality of institutions, infrastructure, human resources, supporting industries, and the absorptive capacity of domestic firms. In the context of the global minimum tax, Vietnam needs to move beyond the paradigm of “providing incentives to attract FDI” towards “designing incentives to generate domestic value added,” thereby improving the quality of FDI and strengthening the economy’s endogenous capacity.

MA. Nguyen Thi Thanh Huyen, PhD. Tran Viet Tuan, MA. Doan Nhat Duong,"Tax Incentives and FDI Attraction: A Perspective from Institutions, Absorptive Capacity, and The Development of Vietnamese Enterprises 2015-2025 Period" International Journal of Advanced Multidisciplinary Research and Educational Development, V2(5): Page(319-325) September - October 2026. ISSN: 3107-6513. www.ijamred.com. Published by Scientific and Academic Research Publishing.