Overview
National Focus
The government of Vietnam (GVN) has made developing its Digital Economy a top priority. In June 2020, Vietnam’s Prime Minister approved the National Digital Transformation Program. The initiative sets digital development goals for 2025, with a vision through 2030, focused on efforts including increased electronic payment accounts, expanded broadband fiber optic cable coverage for households and communes, and digital platforms for businesses in industrial parks and export processing zones.
In September 2021, GVN established the Vietnam National Committee on Digital Transformation. This development served to rebrand the National Committee on Electronic Government and establish a cross-ministerial committee chaired by the Prime Minister, Deputy Prime Minister, and Minister of Information and Communications. In 2024, the Vietnam National Committee on Digital Transformation identified four pillars for the development of the country’s Digital Economy—the IT industry, industrial digitization, digital administration, and digital data. As part of the broader National Digital Transformation Plan implementation, GVN ministries have announced various measures focused on public sector digitization and private sector innovation and regulation. In addition to Vietnam’s Ministry of Information and Communications (MIC), other key government stakeholders developing and implementing Vietnam’s digital economy goals and regulations include, but are not limited to, the Ministry of Planning and Investment and Ministry of Public Security.
Projected Digital Economy Growth
Vietnam’s digital economy market is expected to reach approximately $45 billion by 2025, with projections to reach between $90 billion to $200 billion by 2030. According to Vietnam’s General Statistics Office, Vietnam’s digital economy accounted for over 12% of national gross domestic product (GDP) in 2023. In the ASEAN region, this ratio would place Vietnam in a similar range as that of Thailand and behind only those of Singapore and Malaysia. Moreover, the growth rate of Vietnam’s digital economy has outpaced those of other ASEAN member states in recent years, with a compounded annual growth rate (CAGR) of 19% in 2023, according to Bain & Company.
Vietnam’s private sector stakeholders, especially in key sectors including aviation, banking, energy, healthcare, broadcasting, telecommunications, and urban infrastructure management, are increasingly deploying advanced ICT solutions to enhance operational efficiencies and support sustainable growth.
Vietnam is expected to continue importing large quantities of ICT hardware, software, and services, as Vietnamese suppliers cannot yet meet existing demand nor offer the same range of solutions and services offered by foreign suppliers. This trend is expected to continue, creating opportunities for U.S. suppliers.
Key players in the hardware market include suppliers from Taiwan, China, the United States, and Japan. Major players in the software market include suppliers from the United States, Germany, China, Russia, Israel, and Vietnam.
Market Challenges
While Vietnam’s digital economy continues to grow and offer commercial opportunities across sectors, there are several market challenges and barriers to digital trade affecting U.S. companies engaged in the market or considering market entry. U.S. companies should be aware of and monitor developments in the following areas:
Radio and Television Services:
On January 1, 2023, Vietnam’s Ministry of Information and Communications’ (MIC) Authority of Broadcasting and Electronic Information (ABEI) enacted Decree No. 71/2022/ND-CP (Decree 71), which expanded Vietnam’s scope of regulation on Radio and Television Services to include internet-enabled subscription video services. Serving as an amendment and supplement to Decree No. 06/2016/ND-CP (Decree 06), Decree 71 imposes new licensing requirements for online, over-the-top (OTT) radio and television services, including films. Under this decree, foreign platforms are required to establish a local presence or joint venture. These new requirements pose a challenge for foreign platforms seeking to engage the Vietnamese market. For example, ABEI has requested that certain foreign platforms leave the market unless the foreign firms established a local office or submitted a licensing plan.
Artificial Intelligence and Emerging Technologies:
Although Vietnam’s National Digital Transformation Program identifies Artificial Intelligence (AI) as an area of focus and the government of Vietnam issued the National Strategy on Research, Development and Application of Artificial Intelligence in 2021, Vietnam remains in the early stages of crafting regulatory frameworks for the development and deployment of AI technology and other emerging technologies. On July 2, 2024, Vietnam’s Ministry of Information and Communications (MIC) released for public comment a draft Law on Digital Technology Industry (DTI). The draft DTI Law aims to regulate technology subsectors, including AI, cloud computing, big data, IoT, blockchain, and virtual and augmented reality. The draft Law outlines prohibited AI practices, such as social scoring, and stipulates that AI systems are classified according to the level of risk based on their impact on health, the rights and lawful interests of organizations and individuals, human safety or property, the safety of national critical information systems, and critical infrastructure. In addition, under this draft law, digital technology products created by AI must be labeled for identification to ensure that the output of the AI systems is marked in a machine-readable format and can be detected as artificially created or manipulated. While not yet passed, this draft law provides an indication of the Vietnamese government’s current concerns with respect to AI and emerging technologies.
Cybersecurity and Data Localization:
In August 2022, Vietnam’s Ministry of Public Security (MPS) promulgated Decree No. 53/2022/ND-CP (Decree 53), which supplemented the Law on Cybersecurity of Vietnam issued in June 2018. Decree 53 is expected to make the 2018 Cybersecurity Law more enforceable in practice, but the enforcement mechanisms remain unclear. Decree 53 took effect on October 1, 2022.
Decree 53 subjects foreign and domestic enterprises that provide services on telecommunications networks, the Internet, and the value-added service (VAS) in cyberspace in Vietnam to data retention requirements. Accordingly, foreign firms providing cross-border services falling under a list of ten categories enumerated in the decree are required to store the data of service users in Vietnam, if requested by MPS. The decree notes that MPS can formally request that a foreign firm retain data in scenarios where MPS deems the firm’s services have been used to violate Vietnam’s cybersecurity law or the firm has failed to adequately cooperate with MPS to investigate or address violations.
Upon receiving such a request, the decree notes foreign firms would have twelve months to localize the data and establish a branch or representative office in Vietnam. While Decree 53 lacks details for implementation and enforcement, MPS is drafting a Decree on Administrative Sanctions for Cybersecurity Violations that would impose fines and administrative penalties (including “technical measures,” such as bandwidth limits and blocking of sites) for violations of regulations concerning cybersecurity and personal data protection.
These rules lack clarity regarding the scope of specific requirements for businesses, as they apply broadly to domestic and foreign firms that provide services on telecommunications networks or the Internet and firms that provide other value-added services in Vietnam’s cyberspace.
Internet-Based Content Services:
Article 5 of Vietnam’s Ministry of Information and Communications’ (MIC) Decree No. 72/2013/ND-CP (Decree 72) on the management, provision, and use of Internet services and online information prohibits the use of Internet services for purposes including opposing the Socialist Republic of Vietnam and threatening national security, social order, or safety. In March 2018, MIC issued a draft decree—Decree No. 27/2018/ND-CP (Decree 27)—amending and supplementing articles contained within Decree 72. Decree 27 consolidates existing content, server localization, and data retention requirements for social networks and information websites. MIC’s Authority of Broadcasting and Electronic Information (ABEI) has since proposed measures that would impose problematic requirements on a wide range of suppliers of Internet services and content providers. The proposals contain content censorship measures and data localization requirements that are likely to be duplicative with similar measures contained in the government of Vietnams’ Cybersecurity Decree and Personal Data Protection Decree. These proposed updates pose a challenge to foreign internet-based content service providers, as these rules may create a burdensome registration and licensing regime, including for the electronic gaming and social media industries. Decree 27 would also broaden the scope of the regulation to include data centers and cloud services.
Personal Data Protection:
On July 1, 2023, Vietnam’s Ministry of Public Security (MPS) issued the Personal Data Protection (PDP) Decree (Decree No. 13/2023/ND-CP). The decree requires companies to abide by data protection principles including lawfulness, purpose limitation, data minimization, and confidentiality. However, this measure does not provide a clear scope of which industries or businesses will be subject to the regulation. Furthermore, the decree relies on a broad definition of sensitive personal data, to include items such as personal location data, gender, and financial data. The decree also includes registration requirements to process personal data and transfer data across borders, in addition to mandating that companies retain original data. These Personal Data Protection Decree requirements may pose a burdensome compliance and administrative challenge for foreign firms operating in the market. In February 2024, the Ministry of Public Security announced plans to develop a Personal Data Protection Law, in part to address some of the challenges prevalent in the PDP Decree. However, the process of developing and enacting the PDP Law is expected to take several years. In July 2024, MPS also opened a comment period for a draft Data Law that includes requirements related to data processing. The Data Law is expected to come into effect on January 1, 2026, with no transition period.
Electronic Transactions:
On June 22, 2023, the government of Vietnam passed the Law on Electronic Transactions (Law No. 20/2023/QH15). This e-transactions law serves as an update to Vietnam’s 2005 law on electronic transactions, with the goal of ensuring the law is suited to the present digital economy. However, while the law provides definitions for terms related to electronic transactions, some elements of the law remain vague, especially with regard to compliance obligations for digital platforms. The law also creates new restrictions for cross-border electronic signatures, such as requiring identification verification for e-signature certificates and requiring foreign e-signature authentication service providers to have a local presence in Vietnam. Vietnam’s Ministry of Information and Communications (MIC) is in the process of drafting decrees and circulars to implement the law.
Telecommunications:
In November 2023, the government of Vietnam promulgated Law No. 24/2023/QH15 to update and replace the 2009 Telecommunications Law. The “New Telecommunications Law” is broader in scope than the 2009 Telecommunications Law, as it now includes over-the-top (OTT) services, data centers, and cloud computing services. Some provisions of the new law came into effect on July 1, 2024, while other provisions (including for cloud computing, data centers, and OTT services) are set to come into effect on January 1, 2025. Foreign firms operating in these areas will need to monitor how this expanded scope will be applied in practice, as it now includes stricter data protection rules and aims to regulate “non-traditional” services, including service providers without a local presence in Vietnam. Services identified and defined in the law include data centers; services related to data centers such as information processing, storage, and retrieval; cloud computing and cloud computing services; and internet telecommunication businesses, including OTT services. The New Telecommunications Law also includes details regarding licensing, registration, and wholesale telecommunications. The law will be implemented by Vietnam’s Ministry of Information and Communications (MIC).
Digital Trade Opportunities:
With its rapidly growing Digital Economy, Vietnam offers promising commercial opportunities for U.S. digital technology companies. The best prospect areas for U.S. digital solutions suppliers include the following:
5G Telecommunications and Open RAN:
In 2024, Vietnam’s Ministry of Information and Communications (MIC) prioritized the commercialization of 5G services throughout the country, with a long-term goal of achieving nationwide 5G coverage by 2030. Vietnam’s largest mobile networks, namely Viettel, VNPT, and Mobifone, are investing significantly to develop 5G infrastructure. For example, Viettel has reportedly invested approximately $1.2 billion in developing its 5G network nationwide. MIC has also called on these local operators to test open radio access network (ORAN) technologies alongside efforts to deploy 5G networks.
Wi-Fi 6E and Wi-Fi 7 Software and Devices:
While the government of Vietnam has yet to determine how to allocate its 6GHz spectrum band, the ongoing development of Vietnam’s digital economy may create medium-term opportunities for providers of Wi-Fi 6E and Wi-Fi 7 devices and software solutions. Vietnam’s digital economy is expected to witness increased demand for faster speeds, lower latency, and greater reliability to best support bandwidth-intensive applications in sectors including manufacturing, healthcare, and education. If the government of Vietnam opens the full 1200 MHz of the 6GHz band for license-exempt technologies, such as Wi-Fi, there could be considerable commercial opportunities for U.S. providers of devices, software, and services compatible with 6 GHz Wi-Fi. This could include routers, IoT devices, network management software, and cybersecurity solutions.
Digital Payment Solutions:
Vietnam’s digital payment industry is witnessing robust growth. The government of Vietnam has actively promoted the use of digital payments via the establishment and operation of the National Payment Corporation of Vietnam (NAPAS), which facilitates inter-bank payments. Vietnam’s private sector has also played an important role in developing the local digital payment ecosystem, particularly with respect to e-wallet services. Vietnam’s market-leading e-wallet service providers include MoMo and ZaloPay. Vietnam’s growing digital payment market presents significant commercial opportunities for U.S. digital payment solutions, including in E-Know Your Customer (E-KYC) and Anti-Money Laundry (AML) services.
Cybersecurity Solutions:
Digital adoption in the public and private sectors is generating demand for U.S. cybersecurity hardware, software, and services for applications in the financial services, energy, healthcare, transportation, utilities, and public sectors. Furthermore, the government of Vietnam considers cybersecurity a critical component of its digital transformation efforts. Commercial opportunities exist in the areas of advanced threat detection and response; cloud security; data protection and privacy compliance; critical infrastructure; and consulting services.
Health Wearables and Applications:
Vietnam offers potential opportunities for U.S. providers of health devices and applications designed to monitor, track, and improve health and wellness. These products are a growing part of Vietnam’s digital health ecosystem. Best prospects for U.S. firms in health devices include smartwatches and fitness trackers, while prospects for health applications include fitness and wellness applications, sleep tracking applications, chronic disease management applications, telehealth and remote monitoring applications, and mental health and stress management applications.
Digital Solutions for Smart Grid Data Management:
The adoption of smart grid technologies generates large amounts of data that can be used for optimizing grid operations, predictive maintenance, and fault detection. U.S. suppliers of real-time monitoring and control software, data analytics platforms, and AI-driven solutions will be well-position to meet these growing needs. In Vietnam, key end users include EVN, Vietnam’s largest state-owned power company, and EVN’s affiliated entities that manage power distribution and transmission. Other potential end users include renewable energy producers, industrial zones, and commercial enterprises.
Digital Solutions for Environmental Monitoring:
Driven by increasing environmental challenges, regulatory requirements, and private sector sustainability efforts, Vietnam offers strong market potential for U.S. digital solutions for environmental monitoring, including air quality monitoring, water quality monitoring, soil and agricultural monitoring, and ecosystem monitoring.
Digital Economy-related trade events.
- 2nd National Forum on Digital Economy and Digital Society, Binh Duong Province, September 2024
- Vietnam International Digital Week, November 19-23, 2024