Scenario: a digital infrastructure fund is choosing between Batam (Indonesia) and a Ho Chi Minh City high-tech park for a 40 MW data centre (DC) serving the whole region. Indonesia has ASEAN’s largest market — 270 million people — but pairs it with hard data-localization rules for the public sector. Vietnam is smaller, yet more flexible on data and cheaper to build in. The deciding factor will not be land price.
Data rules: the single biggest difference
Indonesia applies Government Regulation GR 71/2019: public-sector electronic system operators (ESOs) must keep their systems and data in Indonesia, while private ESOs have more flexibility but still face registration duties and access requests. Vietnam takes a classification approach instead of a blanket ban: the Data Law 60/2024/QH15 (effective 1 July 2025) divides data into core data, important data and ordinary data — only the first two face strict cross-border transfer controls; Decree 53/2022/ND-CP spells out in-country storage duties for certain user data. In practice, a DC serving Indonesian government and banking customers is almost forced to sit in that country, whereas in Vietnam, classifying the customers’ data correctly from day one determines the compliance architecture.
Investment and infrastructure framework in Vietnam
A DC project in Vietnam needs an IRC under the Investment Law 143/2025/QH15 and Decree 96/2026/ND-CP, leasing land in a high-tech park or industrial park under Decree 35/2022/ND-CP. Competing locations include the Saigon Hi-Tech Park, Hoa Lac in Hanoi and industrial parks in Bac Ninh and Hai Phong. The shared challenge is power: a DC needs dual feeds, long-term capacity commitments and — increasingly demanded by international customers — a renewable share, all of which must be negotiated with the park developer upfront rather than after construction.
Indonesia at framework level
On the Indonesian side, Batam benefits from proximity to Singapore and special economic zone incentives, while Jakarta concentrates domestic demand. But investors must also price in the risk that localization policy could widen in scope, plus licensing through the risk-based OSS system. This is framework information for shortlisting; land, power and incentive specifics in Batam or Jakarta must be confirmed by Indonesian counsel.
Tax and the customer equation
On tax, a DC in a Vietnamese high-tech park can access high-tech project incentives under the CIT Law 67/2025/QH15; Indonesia offers tax holidays for pioneer sectors but with higher capital thresholds and stricter conditions. The real difference is the target customer: selling capacity to Indonesian businesses means being in Indonesia; serving regional and Vietnamese customers means a Vietnamese site with lower cost per MW and a lighter data-compliance load. Equipment tariffs in both countries follow their own FTA schedules and are not the deciding factor.
Conclusion
Choose Indonesia when expected revenue comes mainly from that domestic market and public-sector customers. Choose Vietnam when the DC serves multinational regional customers, when the operations team needs low costs, and when the investor wants to avoid widening data-localization risk. Many infrastructure funds end up choosing both: Batam for the Indonesian market, Vietnam for the rest of ASEAN.
Frequently Asked Questions
1. Indonesia mandates local data storage — what is the DC opportunity in each country?
GR 71/2019 forces Indonesian public-sector ESOs to keep systems and data in-country, creating huge domestic DC demand but also locking investors into that market. Vietnam does not impose a blanket rule: the Data Law 60/2024/QH15 strictly controls only core and important data, leaving the rest flexible. Vietnam’s opportunity is DCs serving regional customers; Indonesia’s is DCs serving its own 270-million market.
2. How deep is the data centre supply chain in each country?
Both countries import most specialised equipment (UPS, generators, precision cooling). Indonesia is slightly ahead on contractors around Jakarta and Batam thanks to a DC wave that started a few years earlier; Vietnam is strong in construction, cabling and low-cost IT labour. In both countries, internationally certified operations teams are scarce and must be trained or outsourced in the early phase.
3. What do tax and land incentives for data centres look like in each country, at framework level?
Vietnam: high-tech project incentives in high-tech parks under the CIT Law 67/2025/QH15, with low land rent and power prices. Indonesia: tax holidays for pioneer sectors via the Ministry of Finance with high capital thresholds, plus special economic zone incentives in Batam. Indonesian specifics vary by file and must be confirmed by local counsel before capital is committed.
4. How does tariff risk differ when “exporting” from each country?
For a DC, the main risk is not goods tariffs but cross-border data compliance and digital services taxes in customer countries. Equipment imported into both countries enjoys preferences under their respective FTAs (Vietnam has the EVFTA/CPTPP for EU and Japanese goods). This article presents Indonesian law at framework level only — check with local counsel for details before deciding, as the topic file itself advises.
