Draft Resolution of the National Assembly on Regional and International Financial Centers in Vietnam

In the context of global economic integration, Vietnam has been making efforts to enhance its role and position in the international financial market. One of the important measures to achieve this goal is the establishment of Regional and International Financial Centers in Vietnam.

Recently, there has been a lot of information surrounding the draft Resolution of the National Assembly because the Ministry of Planning and Investment is coordinating with relevant ministries and localities to prepare a dossier to build this Resolution. The press and the community are actively discussing the contents of the draft. In line with this trend, ALTAS would like to summarize some of the main contents of the draft Resolution as follows:

The main objective of the Resolution of the National Assembly is to promote economic development and enhance Vietnam's role in the international financial system. Specifically, the establishment of Financial Centers in Ho Chi Minh City and Da Nang will help connect the global financial market, attract new investment resources and develop the Vietnamese financial market.

The orientation of the National Assembly Resolution is to build Ho Chi Minh City into a major international financial center with concentrated financial, banking, and insurance areas. Meanwhile, Da Nang City will develop as an auxiliary financial center, focusing on financial technology services and other support services.

The functions and tasks of the Financial Centers are:

- Connecting the global financial market: Facilitating international transactions and cooperation.

- Attracting investment resources: Improving the business environment to attract foreign investors.

- Developing the domestic financial market: Improving the quality and competitiveness of domestic financial services.

This Resolution sets out several of important policies to facilitate the development of Financial Centers:

1. Preferential tax policies: International financial enterprises and investors will enjoy preferential tax rates to create strong incentives for investment and business in Vietnam. Corporate income tax, value-added tax and other taxes will be significantly reduced for financial and investment activities in Financial Centers.

2. Administrative reform: Administrative procedures will be simplified and shortened, aiming to reduce time and costs for enterprises and investors when conducting financial and investment transactions.

3. Modern infrastructure: Strong investment in information technology infrastructure and transportation systems to ensure that Financial Centers have a favorable and modern operating environment.

4. Talent attraction policy: Apply preferential policies to attract and retain leading financial experts from within the country and internationally. Facilitate the issuance of visas and work permits for foreign financial experts.

5. Financial support policy: Provide financial and investment support packages from banks and financial institutions to encourage the development of businesses in the Financial Center. Ensure abundant and stable capital for financial and technological investment projects.

6. Human resource development policy:

- Strengthen training and improve the quality of human resources in the fields of finance, banking, and financial technology.

- Cooperate with international universities and educational institutions to improve the capacity and professional skills of employees in the financial industry.

7. Policy to encourage startups and innovation:

- Support startups in the fields of finance and financial technology.

- Provide financial support packages and consulting for startup projects, encourage innovation and creativity.

8. Policy to promote international cooperation:

- Expand cooperation with international financial institutions and other financial centers in the world.

- Create favorable conditions for international financial enterprises to operate and invest in Vietnam.

9. Policy to protect financial consumers:

- Develop regulations and mechanisms to protect the rights of financial consumers.

- Strengthen supervision and inspection of financial activities to ensure safety and transparency.

10. Policy to develop sustainability:

Encourage financial enterprises to implement sustainable projects and business activities, protect the environment.

11. Sandbox testing policy for Fintech

A highlight of the draft Resolution is the sandbox testing policy for business models applying technology in the financial sector (fintech). This policy is designed to encourage innovation and reduce risks for new products and services.

- Objective: Facilitate innovation and product development in the financial sector.

- Participation conditions: Fintech businesses need to register and provide detailed information about the product as well as the testing plan.

- Testing process: Lasts from 6 months to 1 year, under the supervision of financial management agencies.

- Benefits: Promote rapid development and increase trust from consumers and management agencies.

- Risks and safeguards: Apply safeguards to minimize risks associated with new products and services.

12. Policy on development and management of cryptocurrency

The National Assembly's Resolution also mentions the development and management of modern financial technologies such as cryptocurrency and blockchain technology:

- Legal framework for cryptocurrency: Build and complete a clear legal framework for the use, transaction and development of cryptocurrency in Vietnam, ensuring compliance with international standards and protecting the rights of investors and consumers.

- Management and supervision of cryptocurrency: Establish specialized agencies to manage and supervise the activities of the cryptocurrency market, applying technical and high-tech measures.

- Encourage the development of blockchain technology: Support research and development of blockchain technology applications in areas such as finance, banking, and supply chain management.

- Promote digital payments: Encourage the use of digital payment methods and e-wallets to enhance convenience and safety in financial transactions.

It is hoped that the policies and measures in this draft Resolution will contribute to the strong development of Vietnam's financial sector, bringing the country closer to the position of a regional and international financial center.

At ATLAS, we are a team of lawyers and experts with extensive experience in providing legal and compliance services in Vietnam. At the same time, our experts have extensive experience working and consulting in multinational corporations related to the following services:

- Legal advice on business establishment: Support procedures for establishing businesses and branches.

- Tax and accounting advice: Support for applying preferential tax policies, providing accounting and auditing services.

- Financial transaction and investment advice: Advice on mergers and acquisitions and investment transactions.

- Sandbox policy advice: Support for registration and testing of fintech models.

- International legal advice: Supporting international businesses to comply with Vietnamese regulations.

- Protecting financial consumers' rights: Resolving disputes and protecting customers' rights.

- Consulting on cryptocurrency and blockchain: Compliance with regulations on cryptocurrency and blockchain technology development.

- Training and capacity building: Organizing training courses on legal and financial management.

ATLAS is committed to supporting investors and businesses during this transition period. If you need more information or support in complying with Vietnamese laws, please contact ALTAS at contact@altas.vn.

Author: ALTAS Managing Partner & Ms. Dang Thi Ngoc Lan (Senior Legal Assistant)

Date: 22.02.2025