Illegal trading of personal data has long run rampant across Vietnam’s cyberspace, particularly on underground forums, social media platforms, and encrypted chat groups.

Entire datasets of tens of millions of Vietnamese citizens are being classified and sold - ranging from basic personal details to highly sensitive information such as banking credentials, insurance data, and health records. In 2024 alone, more than 14.5 million Vietnamese accounts were compromised, leading to losses estimated in the tens of millions of dollars.

Lieutenant Colonel Do Thi emphasized that the 2025 law fills critical legal gaps and is a foundational step toward systemic personal data protection in the country.

Fines targeting illicit profits: A new enforcement philosophy

One of the most consequential provisions in the new law is the imposition of fines up to ten times the illegal profit gained from the sale of personal data.

This marks a decisive break from past regulatory approaches, which relied on fixed fines that often failed to reflect the scale or profitability of violations.

Over the years, the illegal data trade has become a full-fledged underground economy, treating personal information as raw material for advertising scams, fraudulent loans, and behavioral manipulation.

Fixed penalties of a few thousand dollars were dismissed by perpetrators as mere “operational costs” in what had become a high-risk, high-reward business model.

By targeting the root cause - economic motivation - lawmakers are betting that no profit is worth risking ruinous fines.

This fine structure also aligns Vietnam’s approach with global standards, treating personal data not as a tradable commodity but as a fundamental asset tied to individual dignity and privacy.

Importantly, the law doesn’t just target small-time data traders. It holds platforms, tech companies, and large-scale data processors accountable for violations across their ecosystems.

As revenue streams from personal data come under tight scrutiny, data-centric ecosystems will be forced to reorganize around transparency and compliance.

5% revenue penalties for unlawful cross-border data transfers

The new law introduces fines of up to 5% of the previous year’s revenue for organizations that violate cross-border data transfer regulations.

If a violator’s revenue is unknown - or if 5% is deemed too lenient - the law allows for direct fines of up to USD 125,000.

This provision reflects a clear policy stance: personal data, especially at scale, is no longer just a privacy issue - it’s now a matter of national security and digital sovereignty.

Cross-border data flows are no longer treated as routine technical or business operations. They are now subject to rigorous legal oversight.

Linking fines to revenue reinforces the principle of proportional responsibility: the larger the organization and the more data it handles, the greater the consequences if it violates the law.

This prevents a scenario where large companies get off lightly while the damage from a breach affects millions.

Crucially, the law also anticipates challenges with enforcement - particularly with cross-border startups, cloud-based platforms, and digital businesses that lack formal legal presence in Vietnam.

By addressing cases where revenue is unverifiable, lawmakers are closing potential loopholes.

Most significantly, the law sends an unambiguous message: Vietnam will not sacrifice personal data rights for digital growth at any cost.

All data-related activities - processing, monetization, and transfers - must be firmly grounded in legal frameworks and respect user rights.

Criminal liability and compensation for victims

Beyond administrative fines, the law paves the way for criminal prosecution in severe cases and mandates compensation for individuals whose data has been violated.

This multi-tiered approach ends the idea that violations can be “resolved” by simply paying a fine. Offenders - both individuals and organizations - must now face comprehensive legal consequences.

At the policy level, the law marks a shift from advisory-based governance to strong legal enforcement.

Personal data handling is no longer a legal grey zone - it’s now a strictly regulated domain, reflecting the central role of data in the modern economy.

Enterprises must now invest early in compliance-first data systems and business models.

In the long run, the law aims to protect citizens and build a transparent, sustainable digital market.

Tech firms face existential choices

For technology companies - especially digital platforms, advertisers, and e-commerce firms - the new law strikes at the very heart of their data-driven models.

With fines up to ten times the illegal profit, the days of “collect first, justify later” are over.

The biggest impact may be on compliance costs. Firms are now required to invest in full-spectrum data governance: user consent mechanisms, lifecycle tracking, classification systems, and opt-out procedures.

Models based on vague data use terms, indiscriminate collection, or third-party sharing are now legal liabilities that could cripple a company after a single breach.

Cross-border platforms are under added pressure. Fines based on global revenue force boards to reconsider their entire data architecture: where servers are located, what can be exported, and who is legally accountable in Vietnam.

This changes compliance from a technical detail to a strategic boardroom issue.

Data law forces fintech and banks to rethink risk across their ecosystem

Cybersecurity experts note that financial institutions - especially banks and fintech companies - are frequent targets for data breaches and must take data protection seriously.

In fintech, personal data is not just a user profile - it underpins credit scoring, e-KYC, fraud prevention, and product customization.

Thus, the law has a dual effect. On one hand, it raises compliance costs, especially for firms relying on third-party data or aggressive cross-platform data sharing.

On the other, it acts as a market filter - favoring those who follow the rules. Transparent, compliant fintech firms stand to gain user and investor trust.

In digital finance, trust is everything. Data compliance could shift from being a regulatory burden to a competitive advantage.

For banks, the law’s impact is even broader. While already familiar with high security standards, they now face ecosystem-wide responsibilities.

With annual revenues in the billions, a 5% fine is no longer symbolic - it could significantly damage profits and reputations.

Banks will now need to audit every data-sharing link - from tech vendors to payment gateways - to ensure compliance.

They must not only avoid violations but also demonstrate the ability to detect and control third-party risk.

Strategically, the law pushes banks to strengthen domestic data infrastructure, centralized processing, and tighter access controls.

While this may slow product rollout, it builds resilient and secure operational foundations.

From loopholes to leadership: Vietnam raises the bar on data governance

Vietnam’s 2025 law doesn’t merely punish violators - it reshapes how tech, fintech, and banking sectors operate.

Data is no longer a cheap fuel for quick growth. It is a regulated asset - and failure to treat it as such could sink a business.

Firms that view compliance as a burden will struggle. Those that treat data governance as a core capability will find themselves leading a market defined by integrity, transparency, and user trust.

Thai Khang