Resolution Passed for Establishment of Global Financial Hub
In a significant move to bolster its financial sector, Vietnam has approved plans to establish International Financial Centres (IFCs) in Ho Chi Minh City and Danang. This decision is based on a recent Resolution on International Financial Centre in Việt Nam, signed by National Assembly Chairman Trần Thanh Mẫn.
The Resolution aims to improve financial services and support services in accordance with international practices. The IFCs will be established under a unified model of operation, supervision, and governance, adopting international accounting and financial standards to ensure compliance with global norms.
Ho Chi Minh City will focus on capital, banking, and currency markets, while Danang will concentrate on sustainable and green finance, leveraging its strategic location near East-West economic corridors. The centres will operate under unified management, which could facilitate more efficient and streamlined investment processes for both domestic and international investors.
The National Assembly has issued a resolution outlining the framework for the establishment, operation, governance, oversight, and specific mechanisms and policies applicable to the IFCs. This includes the option for foreign laws to be applied in certain transactions involving foreign parties, provided they do not violate Vietnamese laws.
The aim of the Resolution is to create an attractive environment for investment in the financial service sector, promoting investment and the free movement of international capital. It also targets attracting and developing innovation and financial services supporting green and sustainable projects in Việt Nam.
Việt Nam will implement special and superior mechanisms and policies to attract capital, technologies, modern management methods, high-quality human resources, and infrastructure development to its first International Financial Centre. The Resolution also aims to integrate the IFCs with international markets.
The establishment of these IFCs comes amid rising economic uncertainties and potential trade pressures from the United States, which has threatened tariffs on Vietnamese exports. However, Vietnam's foreign investment inflows have shown resilience, with a 7.9% increase in the first five months of the year.
The IFCs aim to attract significant capital flows and foster innovation in financial services, particularly in fintech and digital assets. Danang's focus on sustainable and green finance offers opportunities for investment in green transformation projects and energy transition initiatives.
The Resolution also imposes restrictions on members to ensure national interests and prevent threats to national security. For transactions related to ownership rights, other rights over real estate, leasing of real estate, or using real estate as collateral, the laws of the country where the real estate is located will be applied.
In cases where parties do not agree on the applicable laws, the laws of the country most closely connected to the transaction will be applied. Foreign parties in transactions related to the International Financial Centre may agree to apply foreign laws, provided they do not violate the fundamental principles of Việt Nam’s laws.
The Resolution further targets developing the stock and insurance markets, banking activities, fintech, digital assets, commodities, and e-commerce in Việt Nam. The aim is to attract and develop high-quality human resources capable of providing financial services and related professional services which meet international standards.
With these IFCs, Vietnam is positioning itself as a key player in the global financial landscape, attracting foreign investment and fostering innovation in its financial sector.
- The unified model of operation for the International Financial Centres (IFCs) in Ho Chi Minh City and Danang will adopt international accounting and financial standards, ensuring compliance with global norms in artificial intelligence (AI), law, finance, and investing, as well as supporting services like environment and sustainable projects.
- Vietnam will implement policies to create an attractive environment for investors in the financial service sector, focusing on Ho Chi Minh City's capital, banking, and currency markets and Danang's sustainable and green finance, aiming to integrate with international markets and attract foreign laws in certain transactions, provided they do not violate Vietnamese laws.
- The IFCs' primary objectives are to attract significant capital flows, foster innovation in fintech and digital assets, and support Vietnam's green transformation and energy transition initiatives, positioning the country as a key player in the global financial landscape, leveraging its business opportunities and national interests.
