On June 27, 2025, the National Assembly of Vietnam officially passed a resolution approving the establishment of International Financial Centers (IFCs) in Ho Chi Minh City and Da Nang. With 93.5% of delegates voting in favor, this historic decision marks a pivotal milestone in Vietnam’s efforts to build a world-class financial ecosystem, enhance its ability to attract global capital, and elevate the country’s economic and financial standing in the region and beyond.
From Strategic Vision to Legislative Action
For over two decades, the idea of building an international financial center has been repeatedly included in Vietnam’s national development strategies—from Party Congress Resolutions to 10-year socio-economic plans. However, due to institutional bottlenecks, legal constraints, and infrastructure limitations, the vision remained unrealized.
This is the first time the National Assembly has enacted a dedicated resolution establishing IFCs in two strategic cities. It not only realizes a long-standing policy goal but also demonstrates a clear political commitment to institutional innovation and a decisive shift away from conventional administrative management toward global-standard financial governance.
The Twin-Center Model: Two Pillars of Financial Advancement
A notable highlight of the resolution is the creation of a “twin-center” model:
Ho Chi Minh City is set to become a comprehensive financial hub, with a focus on capital markets, currency and banking, stock exchanges, fintech, derivatives, insurance, and asset management. It aims to attract international financial institutions, investment funds, and multinational banks to pilot and launch new financial products.
Da Nang is envisioned as a tech-driven, innovation-oriented financial center. It will specialize in green finance, sustainable finance, digital currencies, blockchain applications, and cross-border financial services. Da Nang is also expected to become a hub for remittance inflows and individual global investments, serving as a “policy sandbox” before broader national rollout.
Clearly distinguishing the roles of the two cities helps avoid internal competition and strategically aligns traditional finance with future-forward financial innovation.
A Special Regulatory Regime: Breaking from the Conventional Framework
Among the most groundbreaking aspects of the resolution is its introduction of unprecedented incentives within the Vietnamese legal system—designed to attract international capital and high-caliber professionals.
1. Tax Incentives Beyond Existing Legal Limits
– Corporate Income Tax: Enterprises operating within the IFCs may enjoy preferential tax rates for up to 20 years—lower than the most favorable rates under the current Corporate Income Tax Law.
– Personal Income Tax: Foreign experts and highly skilled professionals may benefit from deep tax reductions—potentially below 5%—or full exemptions during their initial years of residence and employment in the IFCs.
– Import Duty Exemptions for equipment, technology, software, and intangible assets used in financial services, fintech, or cross-border operations.
2. Land Use, Infrastructure, and Administrative Privileges
– Priority allocation of land and office space within designated financial districts, with synchronized planning for electronic infrastructure, security, accommodation, and direct connectivity to seaports and international airports.
– A “single-window mechanism” for all administrative procedures—from incorporation to licensing—under a unified inter-ministerial agency.
– Accelerated processing timelines, including an “approval by default” mechanism where applications are automatically approved if authorities do not respond within the statutory deadline.
3. Special Residency and Immigration Policies
– 5-to-10-year long-term visas for investors, financial executives, and international experts;
– Visa exemptions or fast-track e-visas for foreign partners attending conferences, negotiations, or investment activities in the IFCs;
– Special labor permits that allow mobility between organizations within the IFCs without requiring new documentation.
4. Market Access and Financial Transaction Incentives
– Foreign currency transactions permitted within IFCs under monitored safety standards;
– No restriction on repatriation of profits for legally compliant and taxed activities;
– Cross-listing capabilities, enabling international investors to issue bonds and stocks directly on domestic exchanges operating within the IFCs.
5. Legal Certainty and Dispute Resolution
– Dedicated financial arbitration and financial courts will be established within the IFCs, allowing parties to resolve disputes outside traditional court systems under frameworks such as UNCITRAL or ICC rules.
– A transparent and stable legal environment, with formal written commitments to maintain incentive policies throughout the investment lifecycle, ensuring robust investor protection.
Controlled Experimentation: Legal Basis for Fintech and Digital Assets Sandbox
The resolution provides a legal foundation for controlled financial and technological sandbox environments, enabling the pilot testing of innovative models, including:
– Digital asset and cryptocurrency transactions under regulatory oversight;
– AI-based financial management tools;
– Blockchain technology applications in insurance, digital identity, and auditing.
Modern Governance Structure: A Leap in Institutional Reform
A major hurdle in the past was overlapping and inconsistent oversight among government agencies. The new resolution establishes a three-tier governance model for the IFCs:
– An independent executive authority empowered to approve and regulate financial services based on international standards;
– A financial risk supervisory body, working closely with the State Bank and Ministry of Finance to ensure transparency and systemic safety;
– A specialized dispute resolution body, including dedicated financial courts and international arbitration centers, modeled on practices from London, Singapore, and Dubai.
This marks a profound shift from fragmented bureaucratic oversight to an integrated, globally aligned financial governance model.
Risk Management: Prioritizing Stability over Unsustainable Growth
Financial development is a double-edged sword. Global history has shown that major financial centers often carry high risks—money laundering, market manipulation, asset bubbles, and liquidity crises.
Vietnam’s National Assembly took a cautious and responsible stance, mandating the Government to implement strict risk controls:
– Real-time monitoring of capital flows, especially involving foreign exchange and digital assets;
– Mandatory reporting mechanisms, using digital platforms to trace funds;
– International cooperation on tax transparency and illicit finance prevention, in line with FATF and OECD recommendations.
Long-Term Impact: More Than Finance – A Strategic Repositioning of the Nation
Establishing international financial centers is not merely about creating another investment destination. It is a nation-branding strategy amid shifting global value chains.
A successful IFC can:
– Attract global capital not only via direct investment (FDI) but also through intermediary financial channels such as bonds, equities, funds, and derivatives;
– Generate demand for high-quality human capital, retain domestic talent, and draw international experts;
– Accelerate legal reform, pushing Vietnam’s legal and institutional frameworks closer to global standards;
– Redefine Vietnam’s role in the Asia-Pacific financial landscape—from a follower to a game-changer.
A Long Road Ahead: Vision, Endurance, and Institutional Excellence
The National Assembly’s resolution of June 27, 2025, represents a pioneering step—but not the final destination. As evidenced by the experiences of Singapore, Hong Kong, Dubai, and Shanghai, a successful IFC requires at least 10 to 15 years of steadfast reforms, robust infrastructure investment, and institutional endurance.
Vietnam stands on the brink of transformative change. This decision may well serve as the catalyst for a modern, transparent, and globally integrated financial ecosystem—where international investors can place their trust, and Vietnamese citizens can take pride in a nation that dares to think big, act boldly, and lead with vision at the right moment.
Lawyer Linh Nguyen – LA DÉFENSE LAW FIRM VIETNAM
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