Viet Nam focuses on finalising institutional framework for digital economy

A key driver of growth

To realise the aspiration of transforming Viet Nam into a developed, high-income nation by 2045 and to lay the foundation for the country’s next century of development under the Party’s leadership (2030–2130), the 3rd Plenum of the 14th Party Central Committee issued Resolution No. 19-NQ/TW on innovating Viet Nam’s development model.

Deputy Minister of Justice Nguyen Thanh Tu noted that this is a highly significant resolution, setting a target for Vietnam to build a highly efficient, innovative, green, autonomous, inclusive, and integrated economic model by 2035. Resolution No. 19-NQ/TW affirms that the digital economy is a key pillar of Viet Nam’s future economic development model.

Consequently, it is essential to promptly refine the legal framework for the digital economy, building upon the existing legal system while introducing additional regulations to address the unique characteristics and specific nature of the digital economy.

In reality, the digital economy is already present in most daily activities, such as using QR codes to trace product origins, conducting transactions via social media, receiving test results online, or handling administrative procedures in a digital environment. The digital economy is becoming a key driver of growth, business model innovation, and labour productivity improvements.

By 2025, the value added by Viet Nam’s digital economy is projected to reach 14.02% of GDP — equivalent to approximately 72.1 billion USD — representing a 1.64-fold increase compared to 2020. The average annual growth rate for the 2021–2025 period is estimated at around 12.1%.

These figures demonstrate the rapid development of the digital economy. However, according to economist AssocProf, Dr Ngo Tri Long, there remains a significant gap between the current 14.02% of GDP and the minimum target of 30% by 2030.

“We must establish an institutional environment where data flows are controlled; digital assets are defined and protected; new business models have opportunities for testing; competition is maintained; consumers are protected; and the responsibilities of each stakeholder are clearly defined,” Long analysed.

According to Dr Le Minh Nghia of the Viet Nam Financial Consultants Association, over the past two decades, Vietnam has gradually built a legal framework for the digital economy through various foundational laws. These have played a crucial role in recognising the legal validity of data and electronic transactions, while facilitating the development of digital infrastructure, e-commerce, digital banking, and cashless payments.

However, the legal system’s most significant current limitation is “fragmentation”. Older laws have become outdated, while newer ones lack sufficient time for practical testing. A gap still exists between the formal recognition of “electronic transactions” and “substantive digitalisation”.

According to Dr Le Minh Nghia’s analysis: “While the legal validity of data messages has been recognised, many processes still require physical copies, cross-verification, manual confirmation, or manual handling due to specialised regulations, established management practices, and incompatible information systems. This ‘front-end digitisation, back-end paper processing’ scenario diminishes the law’s effectiveness.”

Furthermore, issues regarding security, safety, and user protection have not kept pace with the market's openness,latent conflicts persist between data exploitation and personal data protection, and gaps remain regarding the digital divide and compliance capabilities.

Legal frameworks must be transparent and adaptable to avoid becoming a hindrance

The value of the digital economy lies not in tangible assets but in data, source code, algorithms, and the like.Consequently, the institutional framework governing this model must differ significantly from that of the traditional economy.

To refine the institutional framework for the digital economy and unlock resources — such as technology, capital, human talent, and innovation — to drive national development in the new era, Assoc Prof, Dr Ngo Tri Long proposes three core requirements.

First, the legal framework must be transparent to foster trust through regulations that are clear and easy for citizens and businesses to comply with. Transparency also necessitates a comprehensive assessment of compliance costs.

When proposing a new obligation, drafting agencies must not only identify the risks the regulation aims to control but also consider the additional time, manpower, and costs required of businesses, as well as whether small enterprises have the capacity to meet these requirements. Concurrently, the law must be flexible enough to manage risks appropriately and adaptable enough to avoid acting as a barrier to progress.

Dr Le Minh Nghia argued that refining the digital economy's institutional framework requires addressing several key questions: How can multiple laws function as a cohesive system? How can data be leveraged without compromising privacy? How can artificial intelligence be regulated without stifling innovation? And how can users be protected in an era of AI-generated fakes?

He proposes that the next phase focus on building an integrated legal architecture for the digital economy,establishing digital compliance portals and “single-declaration” mechanisms, developing trustworthy data infrastructure and responsible data markets, strengthening digital consumer protection and damage allocation mechanisms, creating controlled testing environments to support innovation, and assisting small and medium-sized enterprises (SMEs) with transformation and compliance.

Deputy Minister of Justice Nguyen Thanh Tu emphasisedthe equally important need to enhance the effectiveness of law enforcement and implementation. Even with well-crafted laws, ineffective enforcement and high compliance costs hinder the momentum of digital economic development. Furthermore, without a workforce capable of meeting the demands of the digital economy, it will be difficult to drive growth in this vital sector.