The Ministry of Planning and Investment (MPI) has submitted a proposal to the government that outlines the goal of establishing and developing a regional financial center by 2035, and an international financial center by 2045. The Prime Minister will lead the steering committee for the financial center.

In the draft proposal for building a regional and international financial center recently sent to the Prime Minister, the MPI recommends the comprehensive development of an international financial center in Ho Chi Minh City (with a focus on establishing it in District 1 and the new Thu Thiem Urban Area).

The regional financial center in Da Nang will precede the development of international financial services, linked with the Da Nang Free Trade Zone and a controlled sandbox mechanism in the fintech sector associated with innovation.

The establishment of regional financial centers, aiming towards an international financial hub, presents many challenges for Vietnam. However, if successful, the MPI states, it will yield significant results such as: connecting to the global financial market, attracting foreign financial institutions, leveraging opportunities from international investment capital flows, and promoting the effective development of Vietnam's financial market.

According to the MPI's proposal, the organizational structure of the financial center will include various agencies. The steering committee will serve as the highest coordinating and management body, determining development strategies and investments. The Prime Minister will serve as the head of this steering committee.

The supervisory body for the financial center will comprise representatives from the State Bank, Ministry of Finance, Ministry of Public Security, National Financial Supervisory Commission, and the local government where the financial center is located.

To ensure the resolution of disputes related to the financial center, an International Arbitration Center will be established under the financial center, similar to commercial arbitration centers but with some unique characteristics to ensure trust and convenience for stakeholders.

Proposals for special incentives for the financial center

Regarding the mechanisms and policies for building the financial center, the MPI has proposed a set of immediate policies, including: establishing a system and criteria for business registration/membership, allowing only one registration procedure for business establishment and enabling online registration without requiring projects or original documents; permitting the sandbox mechanism for business models utilizing technology in finance, including exchanges for cryptocurrency and digital assets; establishing a specialized exchange for the financial center.

There will be incentives for foreign banks to set up branches or relocate their offices to Vietnam’s financial center (such as tax and fee incentives); visa exemptions for foreign individuals working under invitations from organizations operating in the financial center for a maximum of 30 days, and up to 90 days for foreign investors with trading accounts at organizations operating in the financial center; exemptions from work permits or a fast-track process for foreign individuals working in the financial center, along with a streamlined process for long-term visa and residence card issuance for their spouses and minor children.

Policies will continue to be researched and considered after 2035, including: applying case law to regulate financial and commercial activities within the financial center and establishing an independent financial court, allowing foreign judges to participate in legal proceedings; establishing a legal framework and operating the national central bank's digital currency (CBDC).

The proposal for building a regional and international financial center aims for:

- Establishing and developing a regional financial center by 2035.

- Establishing an international financial center by 2045.

Regarding the Global Financial Centers Index (GFCI): By 2035, Vietnam aims to rank in the top 75 financial centers worldwide and the top 25 in the Asia-Pacific region. By 2045, it aims to be in the top 20 financial centers globally and the top 10 in the Asia-Pacific region.

In terms of fintech ranking, by 2035, Vietnam aims to be in the top 75 financial centers globally, the top 25 in the Asia-Pacific region, and third in ASEAN; by 2045, it targets the top 20 financial centers globally, the top 10 in the Asia-Pacific region, and the runner-up in ASEAN.

According to the 36th GFCI report (September 2024), Ho Chi Minh City scored 609 points in fintech, ranking 100th out of 116, rising four places and six points compared to the previous report.

Compared to financial centers in the region, Ho Chi Minh City ranks below Jakarta, Indonesia (94th), but above Manila, Philippines (101st), and Bangkok, Thailand (102nd).

Binh Minh