US groups warn Vietnam data rules may threaten investment

U.S. business groups warned on Friday a new regulation in Vietnam that will make technology firms store data locally and set up a local office was creating uncertainty and could have a “considerable impact” on investment.

In a joint letter to Prime Minister Pham Minh Chinh, the U.S. Chamber of Commerce, the American Chamber of Commerce Hanoi and the Asia Internet Coalition, said the new regulation would make it impossible for companies to accurately assess the cost of doing business in Vietnam.

“The wording of certain articles/clauses…is ambiguous and creates uncertainty as to what compliance actions are necessary,” according to the letter.

The business associations requested in the letter that the government provide more detailed guidance on the interpretation of the regulation.

The new rules, announced last month, are expected to take effect on Oct. 1 and apply to technology companies as well as telecommunication operators and data storage providers.

Once the rules are implemented, companies will have to store personal data in the country for at least two years and set up local data storage and a representative office within a year.

Vietnam is run by the Communist Party, which maintains tight media censorship and tolerates little dissent.

It has tightened internet rules over the past few years, culminating in a cybersecurity law that came into effect in 2019 and national guidelines on social media behaviour introduced in June last year.

Two tech firms contacted by Reuters, Alphabet Inc’s Google and Meta, also did not immediately respond. Reuters