A view of HCM City. The city has been chosen as home to Việt Nam's first-ever international financial centre (IFC). VNA/VNS Photo Tràng Dương

HÀ NỘI As Việt Nam gets ready to establish its first international financial centre (IFC) in HCM City, the Southeast Asian economy’s largest economic hub, the Ministry of Planning and Investment (MPI) said the Government has formulated a comprehensive plan, including policies and mechanisms aimed at attracting both immediate and long-term investments.

According to the ministry, the plan includes immediate policies to create sandbox models for fintech ventures with incentives for green finance including operations such as carbon credit trading and funding for environmentally sustainable projects. To enhance accessibility, simplified procedures for establishing foreign financial institutions will also be implemented.

In addition, Việt Nam is to establish robust foreign exchange regulations and establish dedicated trading platforms for new financial instruments. Reductions in corporate and personal income tax for entities operating in the IFC are also being proposed.

Long-term policies have been developed for post 2035, with the country planning to introduce additional legal frameworks, create tax incentives and develop central bank digital currency systems. All these reforms aim to create an investor-friendly environment that aligns with international standards.

The ministry identified key factors which are critical to the centre’s future success, including institutional reforms, with regulatory frameworks designed to ensure transparency, stability and competitiveness. For example, financial institutions within the IFC will have the freedom to adopt international accounting standards and practices.

Meanwhile, investments will be made in physical infrastructure, such as transport and logistics, and digital infrastructure, including advanced IT systems to support transactions.

In addition, the country will prioritise the training of skilled workers for the financial sector by setting up training centres in Việt Nam and aligning skill development programmes with international practices.

To attract strategic investors in infrastructure development, the ministry proposed a number of incentives, including exemptions or reductions on land rents, corporate income tax and personal income tax, along with streamlined procedures for investment registration and business incorporation. Foreign banks establishing branches or relocating their headquarters to the IFC will also benefit from many favourable policies.

Huỳnh Thế Du, a lecturer at the Fulbright University Vietnam, highlighted the need for Việt Nam to improve its infrastructure, including transport, logistics and digital systems, to support the centre. He added that improvements in living standards and workers’ capacity are essential.

Quách Mạnh Hào from the University of Lincoln (UK) stressed the importance of a transparent legal system to facilitate the free flow of capital. He highlighted the necessity of leveraging emerging technologies, such as blockchain and artificial intelligence, to offer a competitive edge. VNS