Vietnam has opened up its data center market, enabling foreign investors to own data centers in the country.

First reported by Nikkei Asia, Vietnam previously limited ownership of data centers in the country to a partial 49 percent ceiling for foreign companies.

GettyImages-1324017792 Ho Chi Minh City Vietnam.jpg
Ho Chi Minh City, Vietnam – Getty

Several other industries still maintain a 49 percent foreign ownership cap, but with the establishment of the Law on Telecommunications, which took effect last week, the data center market is now "exempt from the usual market entry constraints."

This rule had previously disincentivized Big Tech to invest in Vietnam, however, the growing demand has meant that the domestic market is no longer able to fulfill needs.

Vietnam also has a "Cybersecurity Law" which forces companies to store their data in Vietnam.

According to Leif Schneider, counsel at law firm Luther, this increases operational costs for companies. "Additionally, there is the challenge of ensuring that domestic data centers adhere to international standards of data security and privacy."

The Law on Telecommunications also states that while cloud and data providers are "not responsible for the content" stored on customers' behalf, they must block content "at the request of state agencies."

Vietnamese telecoms provider CMC Corporation launched a data center company earlier this month called CMC AI Digital Infrastructure. The company plans to construct and operate hyperscale data centers.

This year so far has seen several companies express an interest in developing in the country.

Last month, Huawei announced that it was considering a cloud region in Vietnam at some point.

In May 2024, STT GDC announced that it was planning a 60MW data center in Tan Thuan, Vietnam, and took over operations of another in Ho Chi Minh City. That month also saw Alibaba share that it would be building a data center in the country.

According to Data Center Map, Vietnam has 22 data centers across three markets: Ho Chi Minh City, Hanoi, and Da Nang. Operators include FPT Telecom, NTT GDC, Telehouse, Global Data Service, VNPT Data, Viettel, and CMC Telecom, among others.