What should be noted when investing in the data center sector in Vietnam?

Data centers, also known as Data Centers, are becoming one of the key digital infrastructure fields, attracting increasing attention from foreign investors in Vietnam. However, due to the specific nature associated with telecommunications infrastructure, information security and energy planning, the investment and business of data center services in Vietnam are governed by many different layers of law. In this article, we will clarify some important legal considerations that foreign investors need to pay special attention to when considering investing in this very attractive sector.

Viettel's new data center is the first data center in Vietnam to receive green credit financing from HSBC. Source: VnEconomy

1. Conditional business lines under the Law on Investment 2025

Currently, the business of information center services is classified as a list of conditional business lines according to the Law on Investment 2020[1]. However, in the near future, when the Law on Investment 2025 takes effect, data center services will be officially removed from this list[2]. This is not a relaxation of investment conditions but to ensure consistency in legal terminology. Specifically, while the law on telecommunications defines data center services as a type of telecommunications service[3], the Law on Investment 2020 lists both of these industries simultaneously, leading to the phenomenon of overlap and contradiction between regulations. The Law on Investment 2025 only retains telecommunications service businesses in the list of conditional business lines to ensure consistency in terms of terms used in relevant regulations. Therefore, the removal of data center services from the list of conditional business lines of the Law on Investment 2025 does not mean the abolition of business conditions applicable to this activity.

2. Capital ownership ratio of foreign investors in data center projects

According to the Law on Telecommunications 2023, when providing data center services, foreign investors are currently not limited to the percentage of capital ownership in data center service providers in Vietnam[4]. However, the law still places indirect restrictions related to cross-ownership in the telecommunications sector[5].

Specifically, according to Decree 163/2024/ND-CP, capital contributors/shareholders in enterprises that own more than 20% of charter capital or total voting shares will not be allowed to own more than 20% of charter capital or total voting shares of other telecommunications enterprises doing business in a telecommunications service market on the list of telecommunications services applying regulations on ownership in telecommunications service business in accordance with the regulations of the Ministry of Information and Communications (now the Ministry of Science and Technology).

Investors need to carefully review their investment structure, especially in the case of investing in many telecommunications or digital infrastructure enterprises in Vietnam, in order to avoid the risk of violating regulations on cross-ownership when the list of restricted services is issued.

3. Data center locations

From 01/07/2026, the provincial-level People's Committees will prioritize the placement of data centers in high-tech parks, concentrated digital technology parks and areas with favorable conditions for technical infrastructure on the basis of conformity with the information and communication infrastructure planning.  Digital infrastructure strategy and provincial planning[6]. Data center projects implemented outside these priority areas often have to undergo a more rigorous appraisal process for their conformity with information and communication infrastructure planning, digital infrastructure strategy and provincial planning. Therefore, investors need to focus on choosing the location of the data center in suitable locations or planned areas with advantages in terms of technical infrastructure, energy and network connection. In case the investor plans to deploy the data center in a location not in the priority area, it is necessary to prepare a detailed explanation dossier on the conformity of the planning, electricity infrastructure capacity, network connection, terrain safety and the ability to supply human resources. In addition, investors must also actively work with provincial People's Committees and specialized agencies to assess the feasibility of investment locations outside the arranged locations.

4. The obligation to prove financial capacity and conditions on the minimum investment capital

In the process of carrying out the procedures for approving investment guidelines, the foreign investor's enterprise is responsible for proving its financial capacity to ensure the ability to implement the data center project, in accordance with the scale, nature and total investment of the project.

The project needs to have a financial plan, arrange and mobilize capital to implement the project according to schedule and ensure efficiency[7]. The proof of financial capacity is carried out through legal documents and records, including but not limited to financial statements, financial support commitments, letters of guarantee or commitments to ensure the financial capacity of investors and/or related entities. Moreover, when preparing and appraising the construction investment feasibility study report, the enterprise must identify and explain the factors to ensure the feasibility, efficiency, meeting the objectives and nature of the project (including the total investment, investment capital and form of investment).

5. Technical conditions and obligations for declaration of conformity of Data centers

Vietnamese law requires that data centers must meet certain standards and technical regulations on safety, technology, lightning protection, grounding and telecommunications infrastructure before being put into operation[8]. From 01/02/2026, the standards and technical regulations applicable to the data center will be adjusted according to Circular 42/2025/TT-BKHCN.

For technical standards, enterprises are obliged to self-assess the conformity with the standards in Circular 42/2025/TT-BKHCN and are encouraged to carry out procedures for announcing standard conformity[9]. For technical regulations, enterprises are responsible for selecting measurement and testing units designated by the Ministry of Science and Technology, announcing the conformity with compulsory technical regulations, and at the same time reporting and disclosing information as prescribed[10].

Investors should integrate compliance with standards and technical regulations right from the design and construction stage of the data center, and work early with designated measurement units to avoid prolonging the time to put the project into operation.

Images of CMC Telecom Data Center. Source: CMCCloud

6. Requirements for telecommunications service business licenses

Before providing telecommunications services, foreign-invested enterprises are obliged to carry out procedures for registration of provision of telecommunications services[11] and be granted a certificate of registration for provision of telecommunications services by the provincial-level People's Committee of the locality where the enterprise is located[12].

In case an enterprise not only provides data center services but also establishes, owns or operates public telecommunications network infrastructure, it may have to carry out additional procedures for applying for a license to provide telecommunications services with network infrastructure[13], accompanied by strict conditions on charter capital and investment capital[14].

In our opinion, right from the project preparation stage, investors need to clearly define the scope of operation (providing pure data center services or with network infrastructure) to choose the right type of registration or licensing procedures, avoiding additional requirements or adjustments later.

7. Other requirements

The satisfaction of the conditions for acceptance of fire prevention and fighting (Fire Prevention and Fighting) is one of the mandatory conditions for the competent authority to approve the acceptance of construction works. For the data center, the fire protection system is particularly important due to the characteristics of high concentration of electrical equipment,  the server system and power supply are continuous, potentially causing great risk of fire and explosion and serious damage if an incident occurs. Failure to fully meet the requirements for fire protection may lead to the risk of being refused acceptance, not being put into operation, being administratively sanctioned or forced to suspend operations. In addition, the development of data centers must ensure conformity with energy planning. It can be understood that the requirement for conformity with the power planning is to meet the conditions on electricity planning, the ability to arrange, connect and operate the electricity supply infrastructure in the locality where the project is implemented[15]. Therefore, the conformity with the energy planning does not only stop at the fact that the project is not contrary to the energy plans (on electricity) at all levels that are in force, but also includes ensuring that the area where the data center is planned or has the possibility of being arranged with a stable power source.  continuously, meeting the requirements of large capacity and specific operation mode of the data center. At the same time, the arrangement and use of power sources for data centers also need to be considered on the overall load capacity of the existing local power infrastructure system, in order to avoid the risk of overloading or negatively affecting the supply of electricity to other areas and users.

Foreign investors investing in the field of data center are also obliged to comply with the law on cyber security and personal data protection. The investor is responsible for conducting an impact assessment on the processing of personal data and assessing the impact of cross-border personal data transfer (if any) in accordance with the Law on Personal Data Protection 2025. Along with that, it is worth noting the regulations on the responsibilities of the personal data controller, the personal data processor, the personal data controller and processor; and responsibilities for performing cyber security obligations under the Law on Cyber Security 2025 during the operation of the data center.

The legal framework regulating investment in data centers is in the process of being finalized and there is a transition between many legal documents. Therefore, the investment process in this field of investors can face many difficulties. However, with the support and encouragement of the State in the field of high technology as well as the strong development of Vietnam's economy in recent years, we believe that this is a potential field and worth considering for investors to consider setting up this business in Vietnam.