A local office would make Netflix the first major U.S. tech firm with a direct presence in the fast-growing Southeast Asian country of 100 million, increasingly seen as too lucrative to ignore despite wariness over its stringent internet rules.
Netflix declined to comment in response to Reuters questions about its plans and its current operations in Vietnam.
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| Photo: Reuters |
The company is in the early stage of planning for a local entity in Vietnam after completing an assessment in late 2022 that evaluated the security and political risks of operating an office in Vietnam and the handling of user data and sensitive content, the sources said.
The people declined to be identified because the preparations are confidential.
Although Vietnam’s cybersecurity law of 2018 requires all foreign businesses earning income from online activities in Vietnam to open a local office, only TikTok owner ByteDance has so far complied, even though several other social media providers count Vietnam as one of their top 10 global markets.
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| Photo: nld.com.vn |
Netflix told senior Vietnamese government officials it was studying the possibility of opening a local representative office during a December 2022 meeting with the firm’s Asia business strategy vice president, according to a statement posted on the Ministry of Planning and Investment’s website.
Nguyen Van Doan, a senior official at the ministry, “expressed his hope that Netflix soon establishes a legal entity in Vietnam and contribute to the development of the Vietnamese economy,” the statement said.
With the fastest-growing middle class in Southeast Asia, Vietnam has become a key market for tech giants.
Its digital economy including fintech, e-commerce, and online entertainment is on track to grow to nearly $50 billion in total transactions per year by 2025, more than double last year’s figure, according to a report by Google, Temasek Holdings, and Bain & Company.
The authorities announced last month that they had collected 1.8 trillion dongs ($78 million) in taxes from Google, Meta, Netflix, and TikTok in 2022.
The Vietnamese government had for years been demanding tax payments by tech giants, including Netflix, that were operating without local offices, according to sources familiar with the matter.
Companies had said they lacked a proper mechanism to pay tax in Vietnam, although this was addressed last year with the creation of an online portal for that purpose.
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