The Vietnamese government has officially issued Decree No. 329/2025/ND-CP, setting forth detailed regulations on banking operations, foreign exchange management, anti-money laundering, anti-terrorism financing, and the prevention of the proliferation of weapons of mass destruction, all within the framework of the country’s international financial centers.

One of the key provisions limits the purchase and sale of foreign currency-denominated bonds issued overseas by 100% domestically owned commercial banks to no more than 7% of their equity capital.

Core principles of foreign exchange management

The new decree mandates that members, foreign investors, and all related parties involved in remittance transactions  -  as referenced in Clause 1(a) and Clause 3, Article 84  -  must clearly state the purpose of each transaction. This requirement ensures that member banks providing account services can reconcile, verify, store transaction records, and process transfers in compliance with the law.

Member banks are required to review and maintain appropriate documentation for each transaction to ensure compliance and proper purpose alignment. These banks must also establish internal procedures and take full responsibility for developing risk management and operational guidelines related to foreign exchange activities.

Foreign investors are required to transfer funds via their designated capital accounts held at member banks when conducting investment transactions into the financial centers. Likewise, repatriation of capital, profits, and legally earned income from the centers must follow this same route.

For transactions involving investments from the international financial center into other parts of Vietnam, transfers must also be processed via these accounts, as per legal regulations governing such inward investment flows.

Any enterprise member must comply with regulations applicable to foreign investors, as guided by the State Bank of Vietnam, particularly in cases involving direct or indirect foreign investment into Vietnam.

For outbound direct investment from the financial centers, if the investing entity is not 100% foreign-owned, it must register its foreign exchange transaction with the governing authority in its respective city prior to any fund transfers.

Changes in investment-related forex transactions must also be registered with the city-level authority whenever there is a material update.

Repatriation of investment capital, profits, and other legitimate income from abroad to the financial center must also be conducted through registered accounts.

For outbound indirect investment, entities not entirely foreign-owned must route transactions through accounts designated under Clause 1(a), Article 84 of the decree.

Cap on foreign currency bond trading abroad

Under Article 96, foreign-owned commercial banks and foreign bank branches that are members of the financial centers must comply with reporting obligations to city authorities, follow the account usage rules in Clause 2, Article 84, and adhere to the reporting format stipulated in Article 98.

Domestic commercial banks seeking to buy or sell foreign currency-denominated bonds abroad must meet the following conditions to obtain certification from local authorities:

They must have posted profits for three consecutive years prior to the application year, with these results confirmed by independently audited financial statements without any exceptions.

They must have fulfilled all financial obligations to the state under current tax laws (except in their first year of operation).

They must comply with safety ratios and operational limits as detailed in Chapter V of the decree.

Only after meeting these conditions and securing authorization can domestic banks trade foreign currency bonds abroad. Even then, these transactions must not exceed 7% of their equity capital.

Banks must independently balance their capital sources to engage in such transactions while fully adhering to safety requirements under the decree.

Additionally, all foreign currency-denominated bonds purchased or sold abroad must carry credit ratings from internationally recognized agencies, specifically Standard & Poor’s, Moody’s, or Fitch Ratings.

PV