A Comprehensive Guide for Foreign Investors on Establishing a Data Center in Vietnam

1. What is a Data Center according to the Law of Vietnam?

As defined under Article 3 of the Law, a Data Center is formally recognized as a telecommunications facility that encompasses the buildings, stations, computer systems, and auxiliary equipment necessary for processing, storing, and managing data. Flowing from this, data center services are defined as telecommunications services that provide these core functionalities to end-users by leasing either a portion or the entirety of a data center.

2. The Licensing and Establishment Process

The path to establishing a data center involves a multi-stage licensing process, beginning with investment and enterprise registration and followed by specific telecommunications approvals.

Phase 1: Investment Registration and Enterprise Establishment

The initial phase requires foreign investors to secure fundamental approvals from the local Department of Planning and Investment (DPI) where the project is to be located. This process culminates in the issuance of two critical documents:

- The Investment Registration Certificate (IRC), which is a prerequisite for all foreign-invested projects.

- The Enterprise Registration Certificate (ERC), which officially establishes the legal entity in Vietnam.

Furthermore, investors should be aware of special conditions that may apply. An In-Principle Investment Approval might be required for projects that involve land allocation or land leases granted without a formal auction process, or those that entail a change in the land's designated use purpose. Additionally, since data center services are classified as a conditional investment sector, any foreign investor planning to acquire shares in an existing data center enterprise must first obtain M&A Approval.

Phase 2: Registration for Telecommunications Service Provision

Once the corporate entity is legally established, the next crucial step is to register as a telecommunications service provider with the Ministry of Information and Communications (MIC). The application dossier must comprehensively include a completed application form, copies of the IRC and ERC, and a detailed technical plan that demonstrates full compliance with all requisite standards for infrastructure, operational safety, and data security.

While the statutory timeline indicates a review period of three working days and certificate issuance within five, investors should note that practical processing times may vary. It is also important to remember that before commencing operations, the enterprise must formally issue a Declaration of Conformity, affirming that the data center meets all national technical standards and regulations.

3. Key Regulations on Land and Construction

The physical establishment of a data center is governed by strict regulations concerning real estate and construction. In terms of land use rights, investors can either lease land within designated Industrial Parks or High-Tech Parks from an infrastructure developer, or they may lease land directly from the provincial-level People's Committee for sites located outside these zones, provided the location aligns with national and local master plans.

The construction phase is also strictly regulated, necessitating a formal Construction Permit from the competent authorities before any work can begin. The facility's design and build must adhere to a suite of non-negotiable technical standards. These include national standards (TCVN) and internationally recognized benchmarks like ANSI/TIA-942-B, as well as specific national technical regulations for fire protection and safety (QCVN 06:2021/BXD), lightning protection (QCVN 32:2020/BTTTT), and facility grounding (QCVN 9:2016/BTTTT).

4. Delineated Rights and Obligations of Service Providers

The legal framework also clearly delineates the rights and obligations of data center service providers to ensure a balanced and responsible operational environment.

Providers are granted several key rights to facilitate their operations, such as the right to build and own their equipment systems, lease transmission lines for network interconnection, and be allocated telecommunications resources. Notably, they are generally not held responsible for the content of user data stored on their systems, unless otherwise stipulated by specific laws.

Conversely, these rights are balanced by a set of stringent obligations designed to protect users and national interests. Providers must formally register their services, comply with all prevailing laws on cybersecurity and personal data protection, and abstain from accessing or using customer data without explicit consent. They are also required to act on requests from competent state authorities to prevent access to certain information and must publicly declare the quality standards of their services.

5. Conclusion

In conclusion, the pathway for establishing a data center in Vietnam is becoming increasingly well-defined, guided by the robust framework of the 2023 Law on Telecommunications. This regulatory landscape is now further sharpened by the landmark Law on Personal Data Protection, which is set to take effect on January 1, 2026.

A critical implication of this new data protection law is its strict governance over the cross-border transfer of personal data. Consequently, establishing a domestic data center in Vietnam is no longer merely a strategic commercial move; it has become an essential component of a robust compliance strategy. For foreign investors, this development transforms a local data center from simply an operational asset into a cornerstone of a sound legal and data governance framework. Proactively navigating the intersection of these telecommunications and data protection laws will be paramount for any investor looking to achieve long-term success in Vietnam’s vibrant digital economy.

The information contained in this article is general and intended only to provide information on legal regulations. DB Legal will not be responsible for any use or application of this information for any business purpose. For in-depth advice on specific cases, please contact us.

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