On 19 August 2025, the Ministry of Science and Technology (“MOST”) unveiled the second draft of the Law on Digital Transition (“Draft Law”) for public consultation. This marks a bold step in Vietnam’s ambition to position itself as a regional digital powerhouse, laying the groundwork for widespread adoption of AI, big data, IoT, cloud computing, and blockchain.
If adopted, the Draft Law will not only reshape how organizations operate in Vietnam but also redefine the country’s digital economy and governance model.
Key Takeaways
- Three digital pillars: Data, infrastructure, and platforms form the foundation for nationwide digital transformation.
- Strict prohibitions: Misuse of data, AI, or platforms that threaten security, spread misinformation, or undermine competition will be outlawed.
- Public sector leadership: State agencies must deliver secure, transparent, and citizen-focused digital services.
- Expansive digital economy: Covering platforms, sector-specific applications, and the data economy – with sandboxing and incentives to drive growth.
- Platform obligations: New rules for administrators, business users, and consumers, including transparency around algorithms and oversight of dominant players.
1. A National Digital Framework
The Draft Law defines Vietnam’s digital transformation through three core pillars: digital data, digital infrastructure, and digital platforms. Together, they form the backbone of the nation’s digital journey. Telecoms networks, data centers, cloud facilities, and IoT connectivity are prioritized for fast-track investment, with preferential policies on tax, land, and industry support to attract private capital and fuel innovation.
2. Drawing the Red Lines
Article 5 sets out a hard list of prohibitions, signalling Vietnam’s determination to guard its digital sovereignty. Banned activities include:
- Exploiting digital transformation to threaten national security or disrupt order;
- Unauthorized data use and sabotage of digital infrastructure;
- Misuse of AI for deception or deepfakes, or embedding state secrets into AI systems; and
- Unfair competition on digital platforms.
These prohibitions underline a central theme: innovation yes, abuse no.
3. Government as the Digital Trailblazer
State agencies are tasked with leading by example. They must:
- Build citizen- and business-centric digital services;
- Keep data systems secure, resilient, and transparent; and
- Deploy AI responsibly, ensuring compliance with personal data, cybersecurity, and state secrecy rules.
This push aims to reinforce trust in digital governance while unlocking efficiency gains across the public sector.
4. Defining the Digital Economy
The Draft Law casts a wide net:
- Platform economy: Digital platforms connecting buyers, sellers, and users;
- Sectoral economy: Industry-specific platforms boosting productivity and reshaping business models;
- Data economy: Treating data itself as a tradable commodity – from collection and processing to monetization.
To catalyse growth, the Government promises tax and credit incentives, advisory programs, and controlled “sandbox” pilots to safely test new digital business models.
5. Clear Duties for Digital Actors
The Draft Law assigns obligations across the ecosystem:
- Platform administrators: Must disclose terms, safeguard users, moderate content, and establish transparency around the “black box” of algorithms, explain how they work and ensure they do not stifle competition.
- Business users: Ensure goods and services are legal, protect consumers, and respect IP and competition rules.
- Consumers: Provide accurate information and comply with platform terms.
- Dominant platforms: Face stricter oversight, including interoperability requirements and regular reporting.
Vietnam’s Draft Law on Digital Transition signals a new era for the country’s digital economy. With strong guardrails, incentives for growth, and a focus on trust and transparency, the law aims to create an ecosystem where innovation thrives within clear boundaries.
The consultation period offers stakeholders a valuable opportunity to shape the rules that will define Vietnam’s digital future. For further insights on the Draft Law on Digital Transition or other regulatory developments in Vietnam, please contact DFDL.
The information provided here is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.
