More tech-related legislation sought for foreign businesses

July 01, 2022 | 11:48
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While ministries in Vietnam are working on legal amendments to promote digital transformation, foreign-invested enterprises are looking for more reform of legal and policy in conjunction with other areas such as intellectual property and customs tax to facilitate their next steps.
More tech-related legislation sought for foreign businesses
Businesses from abroad hope the government can create a strong roadmap for digital transformation in manufacturing, processing, and more - Le Toan

After a decade in Vietnam, Israeli CEO of Renova Cloud Doron Shachar now sees high demand for cloud and big data analytics in the Vietnamese market, and is making plans to tap into this growth potential, including an increase in headcounts.

He told VIR, “We already foresee a big gap in those skills. We look forward to contributing to the market’s growth with our abilities, experience, and building skills while supporting enterprises and small- and medium-sized enterprises in their cloud journey.”

Cloud adoption is increasing in Vietnam – together with food and beverage manufacturers, many others in sectors like manufacturing and supply chain have begun to explore cloud opportunities, and the ecosystem has grown and expanded significantly, along different verticals and in different sectors.

According to the Ministry of Information and Communications, digital transformation comprises both physical and soft infrastructure. Basic and traditional physical infrastructure includes telecommunications infrastructure, 4G/5G networks, fiber optic internet, and more. Now the market has new physical infrastructure, that being data centres and cloud computing.

The Vietnamese government understands the cloud and digital transformation trends, and relevant authorities are working closely with public cloud vendors. The country is also developing infrastructure to accelerate national digital transformation, with cloud computing being among the attention by making legal amendments and developing new rules.

Opening new doors

The amendment of the Law on Radiofrequency and completion of a draft law on the digital technology industry are underway to implement the government’s orientation and policies on Industry 4.0. Several key pieces of legislation related to data localisation and data privacy currently in the pipeline are attracting interest among foreign-invested enterprises (see box), especially from Europe.

Shachar added that the Law on Radiofrequency amendment is mostly related to the telcos industry and mobile providers, and it seems that the government is opening up more opportunities for foreign investments which were only meant in the past for the public sector.

“We can see this trend in various sectors including data centres, solar panels, advanced agriculture, and manufacturing,” he said. “There are specific sectors such as agriculture and manufacturing 4.0 in which we can see great synergies with overseas technology. These recent changes will definitely enable these synergies to happen.”

Similarly, Eunjung Han, vice chairwoman of the European Chamber of Commerce’s (EuroCham) Digital Sector Committee, said, “We greatly appreciate the support of various ministries and believe that adherence to European data privacy laws will benefit our dialogue. A clear legal framework that ensures safety, transparency, and effectiveness will ensure that more EU investments are attracted to Vietnam in the future. We look forward to seeing laws that facilitate free data flow and cross-border information exchanges between Vietnam and the EU.”

Roadmap efficiency

According to the committee, in the digital age of cyberattacks, the development of these regulations illustrates the government’s efforts to ensure national security, enhance data security, and serve the public interest. During the public commenting phase, EuroCham members and businesses using digital technologies such as cloud computing, social media, and e-payments asserted that provisions around data localisation and cross-border transfer could impede the free flow of data within the supply chain.

In spite of these, the committee is encouraging the Vietnamese government to consider efforts in reforming its legal and policy framework in order to promote digital transformation in manufacturing activities in conjunction with other areas such as intellectual property, customs tax, digital infrastructure, non-cash payment and fintech, and logistics; while investing in e-government and digitally delivered services, including the use of AI, blockchain, robotics, and sensor networks.

Foreign businesses hope the government can create an effective roadmap for digital transformation in manufacturing, focusing on ensuring data privacy and cybersecurity, developing competition and intellectual property policy, and improving the skills of the workforce, especially in the digital space, the committee added.

Providing favourable conditions for the development of technology companies and providing incentives to encourage and support startups in digital transformation is also being looked at.

Like Renova Cloud, other cloud service providers like Amazon Web Services (AWS) and Alibaba Cloud are venturing further into sectors and industries in Vietnam. For instance, after years of approaching enterprises here, AWS has recently increased its approach to the public sector when it became a partner of Vietnamese tech giant VNPT in June, for developing digital transformation solutions for government agencies and businesses.

Elsewhere, international tech titans like Ericsson, Huawei, VMware, Keysight Technologies, Lenovo, and Qualcomm are also working to tap into this trend.

According to the EuroCham Digital Sector Committee, which represents the voice of tech brands such as AWS, Archetype Group, Ozitem Group, Sunbytes, TekID, WS Interactive, and others, technological adoption and dissemination will continue to accelerate, and its members will continue to monitor and take full advantage of these trends.

Key legislation in pipeline for data localisation and privacy

- Draft decree guiding the implementation of the Law on Cybersecurity: Among other things, it will provide guidance on data localisation requirements.

- Draft personal data protection decree: To be the primary and consolidated regulation governing personal data protection. Having a wide and cross-jurisdictional reach, the draft decree would apply to every government agency, organisation, and individual dealing with personal data.

- Draft decree on sanctions against cybersecurity and personal data protection violations: The draft defines acts constituting administrative violations, relevant sanctions, and remedial measures in relation to violations involving personal data protection, cybersecurity, and information security. The proposed extra-jurisdictional scope is expected to impact both domestic and offshore entities.

- Draft amending the Law on Electronic Transactions: Governing the obligations of digital platforms to protect users’ data by making reference to relevant laws on personal data. The draft will be applicable to agencies, organisations, and individuals engaged in or related to electronic transactions in Vietnam.

Outstanding legal reforms in the information and communications industry in the second quarter of 2022

- The issuance of Decree No.25/2022/ND-CP dated April 12, 2022 about amending and supplementing some regulations of Decree No.47/2011/ND governing the implementation of the Law on Posts.

- The issuance of Circular No.02/2022/TT-BTTTT dated May 16 regulating the list of products, commodities possibly cause safety risks under the MIC’s management

- The promulgation of Decision No.654/QD-TTg dated May 30 approving the national strategy on post development by 2025, with a vision towards 2030.

- The National Assembly Standing Committee approved the proposal to amend the Law on Communications, and submitted to the National Assembly the draft Law on Frequency.Source: The Ministry of Information and Communications

By Bich Thuy

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