How data center ownership rules are changing

Governments in Asia Pacific are easing regulations on data center ownership to increase domestic capacity and encourage foreign investment.

In July, Vietnam removed a 49% cap on foreign ownership for data centers, mirroring China’s earlier pilot program to relax foreign investment limits in the telecom sector, which encompasses data centers.

Even before these policy changes, Vietnam had attracted significant interest from global data center operators.

Through joint ventures with local partners, Japan’s NTT Corporation and Singapore’s ST Telemedia Global Data Centers (STT GDC) have announced plans to establish large data centers in the country this year. For instance, STT GDC’s second facility in Vietnam will have an IT load of up to 60 megawatts.

Vietnam’s policy change follows the blueprint in leading data center markets across Asia Pacific, namely Australia, India, Japan, Malaysia, and Singapore.

“Most of these hubs have more liberal foreign ownership policies, which have been a key catalyst for their rampant data center growth,” says Duncan.

Despite this positive step, Vietnam still has work to do.

“Its existing infrastructure primarily caters to traditional hyperscaler and enterprise needs,” says Duncan. “A paradigm shift is required as the industry moves towards data centers capable of handling AI workloads.”

Vietnam’s revised policy stance comes amid a growing trend of data sovereignty laws in the region.

“Governments are increasingly restricting data flows and mandating data localization to encourage domestic businesses and promote a thriving digital economy,” says Duncan. “They are also taking steps to safeguard citizen data and ensure personal privacy in a global digital environment with unrelenting cybersecurity threats.”

This shift will create a competitive advantage for data centers located within these countries, as more data will be repatriated and stored locally.