You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

September 8, 2022

What Do Vietnam’s New Data Localization Requirements Mean for Domestic Enterprises?

Subscribe to Updates

While much attention has been paid to the data localization requirements for foreign enterprises under Vietnam’s 2018 Cybersecurity Law (“CSL”) and the recently issued Decree 53 guiding its implementation, the corresponding requirements for domestic enterprises are often overlooked, despite being potentially more troublesome.

Under Decree 53, “domestic enterprises” are defined to mean enterprises established or registered for establishment under Vietnamese law and having their head offices in Vietnam (Article 2.11), so this designation includes not only Vietnamese companies, but foreign-invested enterprises as well.

Background

Before analyzing the stipulations in Articles 26 and 27 of Decree 53 further guiding the data localization/storage requirements, it is worth restating the very problematic Article 26.3 of the CSL, which reads:

“Domestic and foreign enterprises providing services on telecommunication networks or the internet or value-added services in cyberspace in Vietnam with activities of collecting, exploiting, analyzing, and/or* processing personal information data, data on the relationships of service users, or data generated by service users in Vietnam must store such data in Vietnam for the period prescribed by the government. Foreign enterprises mentioned in this clause must open branches or representative offices in Vietnam.”

[* Note: The Vietnamese text simply uses a comma here, without specifying whether this should be “and” or “or,” leading to additional problems in interpretation.]

Because of this very broad and ambiguous wording, Article 26.3 of the CSL required further guidance from the government and remained unenforced for more than three years after the CSL took effect on January 1, 2019. Decree 53 guiding the implementation of the CSL was finally issued on August 15, 2022, and provides additional clarity on this matter. But does Decree 53 provide sufficient guidelines for implementation with regard to domestic enterprises?

Scope of Application

With regard to foreign enterprises, although there remains some ambiguity, Decree 53 provides clearer guidelines by specifying 10 types of services (the “regulated services”) that are subject to the data localization requirements, as well as the triggering conditions that lead to foreign enterprises being required to store regulated data and establish a branch or representative office in Vietnam. Decree 53 even covers cases where a foreign enterprise is unable to comply with a decision of the Ministry of Public Security (MPS) due to force majeure reasons. Please see our previous article for a detailed discussion.

With regard to domestic enterprises, Article 26.2 of Decree 53 simply sets out that “domestic enterprises must store the [regulated data as defined in Article 26.1] in Vietnam,” raising concerns as to what exactly is the true intention of the drafter.

This intention could be interpreted in several ways:

  1. The drafter wishes to cover all domestic enterprises (i.e., every company incorporated in and operating in Vietnam, regardless of industry or sector);
  2. The drafter wishes to cover all domestic enterprises “providing services on telecommunication networks or the internet or value-added services in cyberspace in Vietnam collecting, exploiting, analyzing, and/or processing personal information data, data on the relationships of service users, or data generated by service users in Vietnam,” as provided by Article 26.3 of the CSL, without any triggering conditions; or
  3. The drafter additionally wants to limit the services of domestic enterprises to the 10 regulated service types for foreign enterprises, with the same triggering conditions, to afford equal treatment between domestic enterprises and foreign enterprises. (Obviously, the scope of application in the first two interpretations would lead to differential treatment.)

Interpretation (1) is the broadest coverage and would significantly widen the scope of the CSL. In theory, according to the hierarchy of law and sub-laws in Vietnam, this is not legal. In practice, we have seen the authorities enforce stricter requirements found in subordinate legislation, instead of the broad requirements under the primary law. However, in our opinion, this intention is the least likely.

Interpretation (2) is the strictly “legal” interpretation, and the most likely intention of the drafter because Decree 53 was issued to implement certain articles of the CSL – Article 26.3 in this case. However, if interpretation (2) is the true intention of the drafter, the scope of coverage remains extremely broad and unclear, and may need further clarification from the MPS.

If the intention of the drafter is to treat domestic enterprises and foreign enterprises equally – i.e., interpretation (3) – then the drafting technique is flawed, because by not specifying the 10 regulated types of services and the triggering conditions for domestic enterprises, Article 26 of Decree 53 is not drafted in a way to support this intention.

Without further clarification from the MPS, interpretation (2) is the most likely intention; however, it could be argued that this clause thus covers all types of online services for domestic enterprises that collect, use, analyze, and/or process regulated data. Why would this be so?

Article 26.3 of the CSL specifies three types of services – “services on telecommunication networks”; “services on the internet”; and “value-added services in cyberspace” – without further explanation or definition, leaving it up to Decree 53 to define these services:

  • “Services on telecommunication networks means telecommunication services and telecommunication application services as prescribed by law” (Article 2.6 of Decree 53). Telecom law defines telecommunication application services to mean “services using telecom transmission lines or telecom networks to provide application services in the sectors of information technology, radio, television, commerce, finance, culture, information, medical health, education, and other sectors.” The notable inclusion of “other sectors” could be interpreted as a “catch-all” term, leading to the possibility that it could cover all sectors/services provided on telecom/internet networks. (The internet network is a type of telecom network.)
  • “Services on the internet means internet services and services providing content on the internet as prescribed by law” (Article 2.7 of Decree 53). The concept of “services providing content on the internet” is not defined and is very broad. Arguably, without definition, such services could be interpreted to include online news, online consulting, online advertising, video on demand, OTT television services, online games, social networks, etc., leading to an extremely broad scope of application.
  • “Value-added services in cyberspace means value-added telecommunication services as prescribed by law” (Article 2.8 of Decree 53).

Therefore, with regard to domestic enterprises, it could be said that if there is no further guidance or clarification from the MPS, all online service providers which collect, use, analyze, and/or process regulated data are required to store the regulated data in Vietnam.

Form of Data Storage

Under Article 26.5 of Decree 53, the form of data storage in Vietnam is to be decided by the enterprises. However, what is sufficient to be considered as “storing data in Vietnam” is still very ambiguous.

As technology has evolved, cloud storage has become a very popular method for both domestic and foreign enterprises to store data. Is it sufficient to store data “in the cloud” if the cloud infrastructure is not located in Vietnam but is accessible via a computer in Vietnam? Or does the data need to be stored in a computer/server or cloud infrastructure that is physically located in Vietnam? Does the original regulated data have to be stored in Vietnam, or it sufficient to just store a copy? These practical concerns need further clarification from the MPS.

Duration of Data Storage

The duration for storage of regulated data of domestic enterprises is also unclear. Article 27.1 of Decree 53 stipulates that the data storage period specified in Article 26 of the decree starts from the time the enterprise receives a data storage request and lasts until the end of the request. The minimum storage period is 24 months.

It is unclear whether this data storage period is applicable to both domestic and foreign enterprises. While for foreign enterprises, Decree 53 clearly specifies the authority’s request to store data in Vietnam as a triggering condition, the decree is silent as to any conditions under which the authority will request domestic enterprises to store regulated data. As analyzed above, there might be no such condition to trigger a request for domestic enterprises. This means that, technically, Article 27.1 should only be applicable to foreign enterprises because it requires the enterprise to receive a data storage request from the authority. Therefore, it could be argued that the specified data storage duration is also only applicable to foreign enterprises, and the decree is silent regarding the data storage period for domestic enterprises. Accordingly, it is also unclear whether domestic enterprises have the obligation to continue retaining regulated data after their service users cease the use of their services.

Grace Period for Implementation

Decree 53 is silent on the grace period for domestic enterprises to store data in Vietnam. This could be interpreted to mean that unless there is further guidance from the MPS, domestic enterprises must comply with this requirement from the day Decree 53 takes effect, i.e., October 1, 2022.

Meanwhile, foreign enterprises only need to implement the data localization requirements when the triggering conditions are fulfilled and the MPS has issued a decision requesting them to do so. They also have a grace period of 12 months from the date of the decision to store data in Vietnam. Therefore, compared with foreign enterprises, domestic enterprises would need to be more proactive and act more quickly in storing regulated data in Vietnam.

How Should Domestic Enterprises Move Forward?

Although there has been a long wait for the promulgation of a decree guiding the implementation of the CSL, Decree 53 as issued still poses various ambiguities, uncertainties, and concerns that could prevent it from being implemented effectively. The question put forward is whether the MPS will issue a circular or other official clarification for further guidance of the implementation of Decree 53, especially clarification on the requirements applicable to domestic enterprises.

If there is no further clarification or guidance from the MPS, the strict legal interpretation of Decree 53 would be that all domestic enterprises “providing services on telecommunication networks or the internet or value-added services in cyberspace in Vietnam collecting, exploiting, analyzing, and/or processing personal information data, data on the relationships of service users, or data generated by service users in Vietnam” must store this regulated data in Vietnam. This means that all domestic online service providers which collect, use, analyze, or process regulated data should prepare themselves to comply with this requirement, starting from October 1, 2022.

In addition, if there is no further guidance, domestic enterprises would be well advised to store physically in Vietnam all regulated data they collect, use, analyze, or process. For example, they may store the regulated data in a file which is stored on a computer (their existing system) located in Vietnam, rather than in cloud storage that might be accessible via a computer in Vietnam, but hosted in another country.

Related Professionals

Industries

Technology

Location

RELATED INSIGHTS​ 

March 13, 2026
Vietnam’s Law on Intellectual Property (IP Law) has undergone continuous amendment in recent years, with the latest amendment issued at the end of 2025. Among the amended and supplemented provisions, the regulation that has perhaps attracted the most attention is a provision relating to the use of protected IP objects by artificial intelligence (AI) systems. Specifically, Article 7 of the 2025 IP Law introduces a completely new Clause 5, which reads in full as follows: “Organizations and individuals are permitted to use texts and data relating to intellectual property objects that have been lawfully published, and which the public is allowed to access, for the purposes of scientific research, experimentation, and training of artificial intelligence systems, provided that such use will not unreasonably affect the legitimate rights and interests of the authors and intellectual property rights holders in accordance with this Law. With respect to texts and data that are objects protected by copyright and related rights, the use of the texts and data as set forth herein must also be in accordance with the regulations of the Government.” Analyzing this newly added provision in the context of how it was conceived, as well as the challenges that still lie ahead, can provide some interesting insights. From Aspirations to Flight in Science and Technology From the end of 2024 and throughout 2025—the 50th anniversary of the country’s reunification—Vietnam witnessed numerous sweeping changes in many areas, including legislative development. It could be said that no sessions of the National Assembly have ever adopted as many laws, resolutions, and major policies as this one. The aspirations of the highest-level leadership have been concretized into major law and policy projects, which were drafted, developed, and passed at record speed. All of this was aimed at building a foundation for Vietnam to achieve
Read More
March 12, 2026
Thailand’s AI legislative framework took another step forward when the Office of the Consumer Protection Board (OCPB) issued a notification establishing guidelines for AI-generated advertising that may cause material misunderstanding about products or services. The notification, which is already in effect, was issued under the Consumer Protection Act B.E. 2522 (1979) and its amendments, which prohibit advertising that is unfair to consumers or may cause harm to society, including false or exaggerated statements and statements that may cause material misunderstanding about products or services. The notification addresses emerging advertising practices, including the use of images edited using software or AI to attract consumer interest or build credibility. The OCPB noted that such advertising may result in consumers misunderstanding the essential characteristics, condition, or usage of products, which violates consumer rights and causes damage. Key Requirements on AI-Generated or Digitally Manipulated Advertising Content For advertisements using still images or videos created or edited with software programs or AI tools that may cause the depicted product or service to differ from the actual product sold or service provided—which may cause misunderstanding regarding the condition, quality, quantity, or other essential aspects of the products or services—advertisers and business operators must comply with the following requirements: Prior authorization. Obtain approval from relevant regulatory authorities where required by law. Accurate representation. Ensure that the advertised size, quantity, volume, number, or composition matches the actual product or service being sold, whether in still images or videos. Mandatory AI disclosure labels. Display clear disclosures when AI or software is used to create or edit images, such as: “Real image or simulation edited using AI” “Photo from actual location or simulation edited using AI” “Photo from actual product or edited simulation” “Image created by AI” “Video created by AI” Clarity of disclosure. Ensure disclosures are clearly visible,
Read More
March 10, 2026
Thailand’s Ministry of Finance and Securities and Exchange Commission (SEC) have issued regulations broadening the criteria for determining who qualifies as a “major shareholder” of licensed securities and digital asset business operators. Under relevant SEC regulations, major shareholders of a regulated entity must obtain regulatory approval and undergo screening by the SEC. The revised framework introduces both shareholding-based and control-based tests to determine which shareholders require regulatory approval for a wider range of indirect ownership structures and de facto control. The Ministry of Finance notification took effect on February 21, 2026, while the SEC’s clarifying rules took effect on March 4, 2026. These changes aim to enhance transparency around beneficial ownership and strengthen regulatory oversight of entities operating in Thailand’s capital markets. Expanded Definition Under the revised framework, a “major shareholder” now includes persons who directly or indirectly hold more than 10% of the voting rights in a regulated company, as well as persons who exercise control over the regulated company or its shares. This system of two separate tests, based on both shareholding and control, differs from the prior regime, which focused primarily on shareholding thresholds and applied a more limited method for determining indirect shareholdings. The two tests (detailed below) operate independently of each other, and any person identified by either of the tests will be deemed a major shareholder. Shareholding-Based Test Broadens Indirect Ownership Attribution For the shareholding-based test, the SEC recognizes two existing methods for identifying indirect ownership, together with a new proportional attribution method. Any person captured under these methods, which are described below, will be regarded as a major shareholder of the regulated company and must obtain SEC approval as a major shareholder. First, the existing framework continues to apply to both first-tier and chain ownership structures. Approval is required for (1) first-tier
Read More
March 6, 2026
Thailand’s Legislation Consideration Committee of the Ministry of Interior has ruled that in-game loot boxes in online games do not constitute gambling under the Gambling Act B.E. 2478 (1935). This first-of-its-kind ruling provides useful guidance for online game operators and digital entertainment companies operating in Thailand. Background The ruling came in response to an inquiry concerning an online role-playing game operator that launched a campaign featuring a loot box mechanism. The mechanism allowed players to purchase a token in exchange for the opportunity to receive a virtual loot box containing randomized in-game items. The key features of this were as follows: The items received were digital, noncash items usable only within the game. The items could not be exchanged, redeemed, or converted into cash with the game operator. Items may differ in rarity but remain purely virtual. The central question was whether paying money to obtain randomized in-game items constituted a risk-based activity involving the chance to receive money or property of monetary value, which would constitute gambling under the Gambling Act. Committee Ruling The committee reached the following conclusions regarding the characteristics of the game’s loot-box mechanism: No cash or monetary equivalent: Players did not receive cash or property that could be exchanged for cash. The in-game items were merely usage rights within the online game ecosystem. No real-world monetary valuation: There was no determination of item value in real currency, and no mechanism for redeeming or converting items into money with the game operator. Any off-platform trading of in-game items between players is irrelevant to online game operators, as any value arising from such transactions is determined by the market rather than by the operators themselves. Service fee characterization: Payments made by players purchasing in-game loot boxes constituted fees for online game services. Accordingly, the committee concluded
Read More