An exemplary light emitting diode includes a substrate and a first undoped GaN layer formed on the substrate. The first undoped GaN layer has ion implanted areas on an upper surface thereof. A plurality of second undoped GaN layers is formed on the first undoped GaN layer. Each of the second undoped GaN layers is island shaped and partly covers at least one corresponding ion implanted area. A Bragg reflective layer is formed on the second undoped GaN layer and on portions of upper surfaces of the ion implanted areas not covered by the second undoped GaN layers. An n-type GaN layer, an active layer and a p-type GaN layer are formed on an upper surface of the Bragg reflective layer in that sequence. A method for manufacturing the light emitting diode is also provided.