How to Start a VPN Business: A Full Guide to Your Best Options

If you spend even a little time online each week, you’ll see just how massive the demand for VPNs is.

You might come across a website or service that needs a VPN to access or spot a popular YouTuber featuring it as a sponsor.

With cyberattacks on the rise, the VPN industry is booming and full of opportunity. Want to get in on the action and make unreal profits?

We’ve got the best tips to help you get started—keep reading to find out more!

Key Features to Add to Your VPN

When you’re building a VPN business, make sure to include these must-have features:

• Security: Your VPN needs strong protection, so add things like AES encryption, multi-hop, and a kill switch.
• Spread-Out Servers: Make sure you can reach users no matter where they are. A wide range of servers in different countries keeps speeds fast and lets users access region-specific content.
• Cross-Platform Support: Support everyday devices and, if you’re planning to scale, add compatibility for specialized devices for corporate VPNs.
• Clean Interface: Looks come second—make sure the UI is easy to navigate.
• Active Support: To keep bad reviews low, have a reliable Customer Support Team ready to handle issues quickly.

How to Start a VPN Business: The Full Breakdown

To start a VPN business, you need to build a plan based on the legislation of the country you’re setting up in. Afterwards, you can start building the infrastructure, and then launch your VPN.

First Steps

Before we get into the nuances involved with making such a decision—and it’s quite a big one considering how dangerous the cyberspace is lately.

Let’s quickly go through the main process. Keep in mind, that this is just an overview. Each step will still need you to do hours worth of research.

1. Take a close look at the VPN industry and find your niche. You can provide tight-knit security, fresh new features other VPNs don’t offer, the list goes on.
2. Note down all the legal and compliance requirements for setting up the VPN business. Your entire plan might get flipped on its head if you don’t do this, especially without considering country specific laws.
3. Get updated VPN technologies, with proper infrastructure and long term maintenance plans. Look into Next Gen VPN features like AI or Zero Trust support.
4. Set up a central backend for the VPN to manage user connections. Make sure it’s smooth and efficient.
5. Hire a developer or build a VPN app yourself as a frontend for consumers, one that’s smooth and enjoyable to use.
6. Register the VPN business and get your licenses. Make sure to consider permits in countries like Iran.
7. Decide a pricing structure for the VPN service. While a subscription-based structure is the basic idea, think about how the pricing plans will work long-term. Consider offers you might be able to give users later down the road.
8. Build a good website to showcase and sell the VPN service, with the best security you can afford. No one trusts a VPN provider whose own website gets hit hard by cyberattacks.
9. Run more tests to check security and performance, then launch.

Building The VPN App: The Core Part

So, now, how do you make a VPN app?

Let’s say you have all the paperwork down. Even then, the app is just as important. You have two options, have a custom VPN built by a developer, or hire an existing template to paint your brand over it.

We’ll discuss both options here.

1. Self-Built VPN

You can go about this two ways: build the VPN yourself if you have the dev experience, or hire someone for the job.

Aside from that, the rest of the steps around the process remain the same and are still different from anything like a white-label VPN.

Let’s talk about the steps you can follow:

1. Do Market Research: Since you’re building your own VPN, you have a better chance to perfectly customize your offering for a niche once you’ve picked one. Just don’t forget to check in on the laws as well.
2. Set Up Hosting: Do you want to host the VPN yourself or use existing cloud-based services for a more convenient setup? Self-hosting has its own benefits. Besides offering you more control, you get to have an easier time making a corporate VPN service package as well.
3. Settle With A Server Location: Your server location will decide how most of your operation will go. You can set up your server where your target audience is, or settle for somewhere outside the country where there are better privacy laws.
4. Choose The Basic Server Type: The first and best option is a physical server. Go for it if you have the expertise or money. It’ll let you provide better security and give you more control, but it’ll need maintenance. Or you can go for a Virtual Private Server (VPS) from providers like DigitalOcean, Vultr, or AWS. A VPS is easier to set up and scale, though with less control.
5. Set Up A Backend VPN Software: You’ll need these to manage the connections. Options like WireGuard or OpenVPN will let you manage the encryption and safe routing of user traffic through your server.
6. Configure A Firewall: You won’t be able to provide a safe VPN with a firewall that’s haphazardly configured. Configure all the ports in your firewall correctly, so your server sends traffic the right way between users.
7. Create A Credentials System: You’re almost done, now. Make sure to provide all the necessary information on account creation pages to help a user set up an account that’ll stay safe. Try to encourage formulas that help create strong passwords.
8. Go Through The Testing Phase: See how your VPN runs. Testing by yourself with different devices is the first step. Once you’re done with that, get volunteers or experienced alpha testers to try out the VPN for you from other regions, to make sure the speed stays consistent.
9. Launch The VPN: Once everything is settled, you can put out your VPN as a proper service. Don’t forget to do proper marketing. You’ll need to invest a good bit in that regard, as the VPN market is crowded in some areas.

2. White-Label VPN

If you want to stay less involved with the technical aspects, white-label VPN services can help a lot in that regard. The steps are much simpler, too.

To set up your white-labeling VPN business:

1. Find a reliable third-party provider.
2. Choose between types of white-label VPNs.
3. Compare features, prices, and profit-sharing options.
4. Negotiate and sign a partnership agreement.
5. Customize the product with your branding.
6. Set up a secure payment system.
7. Launch your VPN.

VPN-as-a-Service Model (VPNaaS): An Alternative

A VPNaaS is like a third-party VPN software template, except it covers the entire operation.

The provider will take care of everything from the technical parts to the long-term maintenance.

You can go for this option if you want to build your business quickly.

Unlike a white-label VPN, where the third party only provides the VPN application, they will supply the complete infrastructure for your service from the start.

To be more specific, VPNaaS gives you everything you need to run a VPN in the cloud, not just the software.

It works like a regular VPN, but the provider manages it, which makes it easier to grow and use. You won’t even need to arrange a physical location.

You get a ready-made VPN endpoint for secure access, while the provider handles setup and maintenance. You just need to focus on branding and how users experience your service.

Legal Challenges When Building A VPN Business

You’ll bump into one legal challenge after another when you’re trying to build a VPN business.

It’s a lot like walking in a minefield, and you’ll have to deal with huge legal hoops if even one of your users ends up misusing the VPN.

Compliance is an absolute must. No matter where you’re getting your VPN, make sure you tick off all the boxes in every legal paper.

If you don’t follow all the rules, you’ll deal with something worse than fines. You could end up facing lawsuits or even having your business being shut down.

Here’s a rundown of specific laws that you need to be aware of in some countries.

Data Storage Laws

The heart of a growing VPN business is the amount of protection it can offer to User Data.

You may not be able to fully provide that kind of protection in certain countries and end up having to take a different approach.

Here are examples of the countries that have laws preventing you from creating a privacy-focused VPN business.

• Russia: For a start, if you set up a VPN business in Russia, you need to be aware of the Yarovaya Law. Your VPN business will have to retain logs of user activity for six months and provide these logs to government agencies upon request. You will be able to offer geographic bypass for the most part, but not full privacy protection for your users.
• India: To run a data center, VPS, cloud service, or VPN business in India, you must comply with CERT-In guidelines under the Information Technology Act. That means you have to retain names, subscription periods, IP addresses, email addresses, timestamps, purpose of service, validated contact details, and ownership information for five years, even post-cancellation, and provide this data to government agencies upon request.

Compliance Laws

Some countries will make it extremely hard to be transparent. For instance, being a VPN provider in the USA will provide you more freedom than being in China.

But laws like the Patriot Act (which can easily be abused by the government) and the Cloud Act still apply.

In the USA, authorities can access your users’ browsing and search history. They can do this without a warrant.

Encryption Laws

If you’re planning to make encryption the pride of your VPN business, you’ll have to be careful about the country you pick.

Some countries you need to be especially careful about include:

• Russia: The Yarovaya Law comes into play here again. You will have to hand over your encryption keys to the government to operate smoothly while offering an encrypted VPN service, but you’ll lose the trust of your users as many are aware of how this law works.
• China: The Chinese government is generally harsh against encrypted VPN services, and tries to keep them in an iron grip. So you won’t be able to operate freely in the country.

All those laws and regulations aren’t the worst of it, either. You’ll have to go through plenty of hurdles to just set up the business, even when it comes to licensing.

Once you’re past all the compliance requirements, be prepared to deal with the tax laws, too.

Take Australia for example—you may need to comply with tax laws that apply to international digital services, such as the country’s goods and services tax (GST).

What Are The Best Countries For VPN Business?

The best countries are Switzerland, Iceland and Panama. They have both users and multiple internet freedom organizations vouching for them.

However, each country offers its own challenges, so which one should you go for?

Here are our suggestions for the best countries, and why we think a VPN business can profit a lot in them:

• Switzerland: Let’s start with the most privacy-friendly country. Thanks to all its current laws, including the recent Federal Act on Data Protection (FADP), you won’t have to worry about data retention requirements and can offer top-tier data protection. With advanced data centers in Zurich and Geneva, like nLighten Geneva GVA1, and internet speeds averaging 93.60 Mbps, you can provide unbeatable service to your customers.
• The Netherlands: This country also offers you a lot of leeway with the GDPR and Dutch Data Protection Act, so you won’t have to be forced to retain the VPN data for users. Not to mention, Amsterdam is a major internet exchange hub with data centers and high internet speeds. If you intend to set up to serve all of Europe, you’ll be able to offer the lowest latency if you pick the Netherlands.
• Panama: Panama has some of the most user-oriented laws out there, so if you set up a VPN in this country, you can thrive without worrying about stepping on the toes of the government.
• USA: This one is obvious, the VPN market in the USA is unbelievably large, thanks to all the tech-savvy users knowing the risks of being exposed online. You’ll have a good amount of freedom to operate, too. Just be aware that you’ll be dealing with high competition and all the Acts.
• Singapore: If you’re interested in setting up in the Asia-Pacific region, this is your best bet. The digital privacy in this country is enforced with the Personal Data Protection Act (PDPA), so you can be completely transparent to your users without risking their trust. Not to mention, it hosts Tier-3 and Tier-4 data centers, with high fiber optics speeds.
• Iceland: This country has a lot of organizations working for its internet freedom, to the point where authorities like Freedomhouse.org are rating it at 94 out of a 100. If you’re not sure where to start, you can go for this country with your eyes closed.
• China: China’s “Great Firewall” represents a huge roadblock in the internet browsing experience of Chinese people. You can swoop in, and get ahold of a huge part of the market, even if there’s a lot of competition (the country has a high population, after all). Be careful though, as there will be limited data center options and constant issues with the government.
• Iran: Iran is just as tough as China but equally rich with opportunities. The country has been a problem for VPN providers since the start of this year, with internet freedom so limited that it only scores 12 out of 100 on Freedomhouse.org.

What To Consider For International VPN Business?

The data retention laws are first priority.

Once you’ve looked through them and made the needed arrangements, be sure to check in on how good the infrastructure is. You need to provide both a fast speed and a rock solid connection.

And as always, weigh the risks before you opt to set up business in a country with heavy censorship.

To summarize, you need to keep these 5 things in mind:

• Data retention laws.
• Infrastructure costs.
• Average internet speeds and uptime consistency.
• Amount of support for the latest VPN technologies.
• Ongoing internet movements where the government is actively involved.

How Much Does It Cost To Make  A VPN Business?

At the minimum, you’re looking at upward costs of $10,000 to make a VPN business. 

These businesses are profitable, but also cost a lot to set up. If you don’t cheat, that is.

To go the easy route, you can rent out a Virtual Private Server (VPS) service.

Alongside that, you can also offer limited bandwidth. Logging is also an option, but keep that at the absolute last part of your list.

After all, if your users find out, your whole customer base will run off in no time.

However, it’s best to retain integrity if you’re building the business in a tech-savvy market.

The highest costs will be spent on the infrastructure, and building it up, which can take years unless you pay a large sum of money for the services.

Are VPN Businesses Profitable?

Yes, there’s more than enough slices of the pie going around.

Cyberattacks are at their peak, with over 6.8 billion attacks having hit the U.S. alone.

Even big companies like Discord and Google aren’t safe from the line of fire.

So everyone is on their toes and more than eager to lock down with more security. This means there’s an opportunity you absolutely cannot miss.

Not sure how to break into the market?

We recommend that you start by looking into specific regions or offering special security features.

Parting Thoughts

Regardless of whether you’re setting up in a risky zone or taking a simpler route, you’re still looking at a huge ROI. The profits in the VPN business are undeniable. Reports project the market to reach $125.94 billion by 2028, with a CAGR of 19.0%—and that’s only going up.

So, settling in early is your best move. With the right choice, you’ll have a lively business in no time!