Ho Chi Minh City Bets $490M on Smart City Push

Ho Chi Minh City is committing 12,705 billion VND — roughly $490 million — of its 2026 budget to science, technology, innovation, and digital transformation, equal to 4.16% of total city expenditure. The allocation signals a deliberate pivot toward a data-driven urban economy, with city officials aiming for double-digit GDP growth as the payoff.

Budget Breakdown and Progress So Far

The city's steering committee for science and digital transformation held a mid-year review on July 15, reporting that 183 of 290 centrally assigned tasks had been completed in the first half of 2026, with no overdue items. Of the total technology budget, more than 9,538 billion VND is earmarked for recurrent spending and 3,166 billion VND for capital investment. According to Tuoi Tre, 4,880 billion VND has already been distributed, while the remaining tranches are under review or await formal capital assignment.

5G and Physical Digital Infrastructure

The city now operates 8,523 5G base stations, accounting for 22.48% of Vietnam's national total, with coverage exceeding 95% of the urban area. A private 5G network has been piloted at Quang Trung Software City — described as the first such deployment in Vietnam — supporting IoT applications, research activities, and smart-city management systems. The city is also investing approximately 3,017 billion VND to upgrade data centers, shared platforms, an intelligent operations center, and cybersecurity monitoring infrastructure.

Data Economy and the Digital Citizen

Six of thirteen priority databases have been completed, covering land records, civil registration, education, and public finance. More than 8 million national identity cards have been issued, reaching a 98.24% completion rate, and over 7 million electronic identity accounts have been activated. These datasets form the foundation for the data economy the city is trying to build, linking government services to a broader platform economy.

Foreign Capital Flowing Into Tech

Over $1.4 billion in international investment has entered the city's high-technology sector, anchored by hyperscale data center projects from Starmason, Evolution, and Viettel, according to the city government's report. This inflow suggests that global cloud and data infrastructure investors are treating Ho Chi Minh City as a viable Southeast Asian hub, alongside established destinations such as Singapore and Jakarta.

Innovation Ecosystem Rankings

The city ranked second nationally on the local innovation index and, for the first time, entered the global top 100 for dynamic startup ecosystems — jumping 12 places from 2025 and reaching that milestone four years ahead of schedule. The startup ecosystem is valued at approximately $7.5 billion. The city's innovation center has incubated 195 projects with roughly 30 billion VND in support funding, while more than 8,500 intellectual property registration applications were filed, also placing second nationally.

A venture capital fund has been established as a joint-stock company with initial registered capital of 500 billion VND, targeting an eventual 5,000 billion VND. The technology exchange platform in its new version has closed 38 contracts worth around 29 billion VND in aggregate.

Policy Pipeline and Talent Development

The city is preparing a package of incentive policies tied to the Urban Development Law, pending National Assembly passage. The measures include tax preferences for technology companies, scientists, and skilled professionals, along with dedicated support for science-technology urban zones and commercialization of research outputs. A legal framework for the venture fund is also being finalized.

On the human capital side, more than 10,400 civil servants completed digital transformation training in the first half of the year, and 9 in-person AI skills courses reached over 2,500 participants. A community network of 5,947 digital technology teams — totaling roughly 29,000 members — operates across the city's neighborhoods.

Investor Takeaway

For investors tracking Vietnam's technology and real estate sectors, Ho Chi Minh City's scale of commitment is notable: nearly half a billion dollars of annual budget spending, plus $1.4 billion in FDI already secured, is reshaping the city's demand profile for data center capacity, connectivity infrastructure, and skilled labor. The pending policy package — particularly the venture fund framework and tax incentives for tech talent — could lower the cost of entry for foreign technology firms considering Vietnam as a regional base. Execution risk remains, with roughly 37% of the technology budget still pending final allocation, but the directional signal from city leadership is unambiguous.