Vietnam to allow Elon Musk’s Starlink under new satellite internet rules

Vietnam’s proposed regulations would permit Starlink’s entry while maintaining full local subsidiary ownership.

A SpaceX Falcon 9 rocket lifts off with 53 Starlink internet satellites from Kennedy Space Center in Cape Canaveral, Florida, on May 18, 2022. Photo by Joe Skipper/Reuters

By Alana Salsabila and Laila Azzahra

Vietnam is preparing to introduce new regulations that would allow Elon Musk’s Starlink to provide satellite internet services in the country while ensuring that any local subsidiary remains fully owned by SpaceX, according to a draft resolution seen by Reuters.

The move marks a significant shift in Vietnam’s stance and follows lengthy negotiations with SpaceX, the parent company of Starlink. A Vietnamese government official confirmed the regulatory changes, which could soon open the Vietnamese market—a nation of nearly 100 million people—to low-orbit satellite internet services.

Vietnam signals policy shift amid U.S. tariff concerns

The decision to allow Starlink’s entry into Vietnam comes at a time when the country is increasingly concerned about tariff threats from U.S. President Donald Trump. A source familiar with the matter described the move as “an olive branch” to SpaceX, signaling that Vietnam is open to transactional diplomacy in response to Trump’s trade policies.

“This is a demonstration from the Vietnamese side that they can play the transactional diplomacy game if the Trump administration wants that,” said the person, who declined to be identified due to the sensitivity of the discussions.

Previously, Vietnam had stalled SpaceX’s attempts to enter the market in late 2023, refusing to lift a ban on foreign ownership of satellite internet providers—a key condition set by Musk. However, the upcoming regulatory changes now suggest that the Vietnamese government is reconsidering its position.

Draft rules set for parliamentary approval

Vietnam’s parliament is set to approve the new regulations in an extraordinary session on Wednesday. Under the pilot scheme, which would run until 2030, foreign-owned satellite internet providers with low-orbit satellite networks would be allowed to fully control their local operations.

The 12-page draft resolution outlines measures to “remove obstacles in scientific, technological, and innovation activities”, granting Vietnam’s prime minister the authority to approve projects under the scheme.

Neither SpaceX nor Vietnam’s information ministry responded to requests for comment on the draft regulations.

SpaceX’s growing presence in Vietnam

Despite past regulatory roadblocks, SpaceX has been expanding its supplier network in Vietnam, and the Vietnamese government has acknowledged that the company plans to invest $1.5 billion in the country.

If Vietnamese businesses and individuals widely adopt Starlink, the increased spending on U.S.-based services could help reduce Vietnam’s trade surplus with the U.S., according to a person familiar with the discussions.

In 2023, Vietnam’s trade surplus with the U.S. reached a record $123.5 billion, making it the fourth-largest trade surplus among U.S. trading partners, according to U.S. government data.

U.S. tariffs and economic risks for Vietnam

Vietnam’s move to ease Starlink’s entry comes amid heightened trade tensions. Last Thursday, Trump directed his team to develop reciprocal tariffs on countries that impose taxes on U.S. imports, setting an April 1 deadline for the proposal. His aides have indicated that countries with large trade imbalances, including Vietnam, will face close scrutiny.

Vietnam’s export-driven economy is highly vulnerable to U.S. tariffs. The country is home to numerous China-based manufacturers that relocated after Trump’s 2018 tariffs on Chinese goods. Any new U.S. duties could disrupt Vietnam’s supply chains and slow its economic growth.

Vietnam looks to balance trade with the U.S.

In an effort to reduce trade tensions, Vietnam has proposed increasing imports of U.S. agricultural products and is exploring other possible purchases from the U.S. market.

By opening its telecommunications sector to a high-profile U.S. company like SpaceX, Vietnam appears to be taking a strategic step to strengthen its relationship with the U.S. and demonstrate economic cooperation.

With parliament set to vote on the new Starlink regulations, all eyes will be on whether Vietnam’s move is enough to ease tensions with the Trump administration while unlocking the potential for high-speed satellite internet access in the country.