Developing an International Financial and Business Centre in Ho Chi Minh City, Viet Nam www.thecityuk.

com

Legal and regulatory structure

for the HCMC IFC
This section outlines different aspects and benefits of various legal and regulatory structures using examples from The independent IFC model, pioneered in DIFC and followed in the AIFC, Qatar Financial centre (QFC), and ADGM,
other IFCs. This is intended to assist the Vietnamese authorities decide which model best suits their strategic objectives would require the implementation of a new legal and regulatory regime in HCMC IFC distinct from that applicable
for HCMC IFC. in than the rest of Viet Nam, but still established under newly enacted Vietnamese domestic law. This model’s major
advantage is that it is a symbolic, high-profile policy move that will reflect the conviction from the Government to
Financial centres around the world apply different models for their legal and regulatory structures aimed at attracting
create an open and international hub for business. As proven in DIFC, AIFC, QFC and ADGM, the adoption of this
international investors and financial businesses. There is a spectrum of options that the Vietnamese authorities could
model can successfully attract foreign direct investment (FDI) and boost business confidence. Such a model could allow
consider as they look to improve the existing financial services infrastructure and develop the HCMC IFC:
the IFC to benefit from the existing ‘network’ of similar IFCs – including the use of each other’s courts and mutual
recognition. However, this model can be disruptive in the short term. It amounts to having two systems in one country,
Review and Independent, freestanding
Mid-Range / ‘Hybrid’ IFC Model it is relatively expensive to implement and often takes time before financial activity increases significantly.
Modernise Model IFC Model
The review and modernise model (which was being explored in Istanbul) is the least disruptive as it involves maintaining
Existing structures (e.g., courts, Significant intervention to create specialist Extensive restructuring to create a
judiciary, regulators, capital institutions and regulators, for example: specialist independent financial centre existing structures but modifying and modernising various aspects in line with international best practice. The focus is
markets) and existing legal and • Create specialist institutions using a combination within the host nation. on modernisation and creating fit for purpose legislation for emerging areas such as FinTech and sustainable finance,
regulatory regime are retained. of external and local expertise. • New, separate, and independent legal and as well as on capacity-building. It has the advantage of being the easiest model to implement but may have a limited
Key areas are reviewed and regulatory regimes.
• Create a specialist commercial court within the impact given that the benefits it brings will be more incremental. With this model, HCMC IFC is less likely to stand out
modernised, for example:
existing judicial system, overseeing the financial • Independence underpinned by changes to
• Align financial regulations with regulator and supporting an IAC. core legislation. vis-à-vis its peers. Any increase in FDI and economic activity will also be less significant.
international best practice. • Create a new financial regulator (or consolidate • Legal regime based on common law
• Identify new or existing areas The ’hybrid’ type IFC model, is likely to be the most suitable for the HCMC IFC. It requires less, but still significant,
the existing domestic regulators) with enhanced principles.
for specialist bespoke regimes, powers of enforcement. • New dispute resolution structures (courts intervention than the independent IFC model. It is a middle-ground approach which addresses weaknesses in the
(e.g., FinTech, green finance). • Introduce legislation and financial regulations and IAC). existing financial services infrastructure and can be tailored to address existing government policy (such as net zero and
• Capacity building for existing targeted at centre’s USPs and based on best • Bespoke set of ‘principles based’ financial Vision to 2045) while still making an important external statement that can attract FDI. Such hybrid approaches have
regulators and judiciary. practice. regulations.
• Update International Arbitration been adopted in a range of IFCs, such as Tashkent in Uzbekistan. It takes a holistic approach to regulation within the
• Align IFC’s strategic objective with key • New capital market.
Centre (IAC) rules and enhance government policy agendas, so as to ensure that whole of Viet Nam’s financial sector. However, it may not be sufficiently impactful in a highly competitive region with
• Restricted membership (FIs, financial
rapid and effective enforcement IFC development is high on the national agenda. other IFCs such as Hong Kong and Singapore. It could also be challenging to integrate external and domestic expertise
services companies, ancillary service
of awards. • New regime to apply only to certain entities providers). effectively.
(e.g., financial institutions, financial services • Free standing company registry.
companies with significant turnover, certain key Whichever model is selected, regular interactions between regulators and market stakeholders will help ensure that
• Favourable tax regime for members.
financial activities).
• Visa free operation. the legal and regulatory regime benefits the market as a whole, by adopting international best practice and taking into
• Consider consolidating and reforming the capital,
FX, commodities, and derivatives markets. • Newly created infrastructure and account the needs of the private sector.
designated territory.
• Significant capacity building.
• No capital restrictions.
• Create modern infrastructure and a physical
space for the centre, but without restricting the • Mix of reserve currencies.
centre activities to a defined territory. • English and Vietnamese are the official
• Vietnamese is the official language but languages of IFC.
supported by extensive use of English.
• Visa exemptions for those working in the
financial sector.

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A possible way forward would be to create a roadmap for the evolution of HCMC IFC starting with a hybrid model existing financial regulator, ministries, and policy makers (including relevant steering committees and existing/
and moving towards the more independent model. This could be done for example, by identifying objectives to be future working groups), while galvanising and encouraging private sector. Continuous collaboration and clarity
achieved within a five-year period and then taking stock and setting further objectives for the following five years and on responsibilities between different regulators will be essential. For example, SBV could assist with developing
so on. These longer-term strategic objectives should complement the Vision 2045 and net zero 2050 policies. Aspects a regime for regulating banking activities within the HCMC IFC and across Viet Nam, while State Securities
to consider when deciding on which model to adopt include: Commission of Viet Nam (SSC) would assist with developing a regime for regulating the capital markets and
financial services generally. Joint steering committees (already established at the national and regional level) and
• Whether the creation of a separate, independent legal and regulatory structure based on international best
working groups could also be used.
practice will give HCMC IFC more credibility with investors and international businesses and financial institutions.
Whether, if framed correctly, it could lead to a strong and productive relationship between HCMC IFC and the •H
 ow to facilitate the participation in and support of the HCMC IFC by domestic professionals and businesses.
rest of Viet Nam.
•H
 ow to develop the HCMC IFC so that it can grow without causing any detriment to the broader market or to
• How the HCMC IFC would interact with the existing regulatory frameworks in Viet Nam. The DIFC, for example, the oversight of the existing regulators, including currency control, market conduct and financial crime controls
as a financial free zone (FFZ), operates on the basis that, whilst it is carved out from the rest of UAE, UAE banking (which, for example, in the UAE, apply across all free zones).
business is not supposed to take place in the FFZ and FFZ entities are not allowed to ‘deal’ in UAE currency.
•W
 hether the HCMC IFC should consider applying a base currency which will be used by HCMC IFC firms for
On the other hand, the QFC’s laws and regulations apply throughout the country and not just within the zone.
their accounts, recording transactions and reporting purposes. The single base currency could bring uniformity to
• Consider whether HCMC IFC’s regulatory authorisation should permit the conduct of regulated financial services reporting standards but not prevent companies from trading and executing their transactions in other currencies.
throughout Viet Nam or should be restricted to activities within HCMC IFC.
•H
 ow to foster good governance and regulatory practice by providing training for foreign and domestic
• Consider how the HCMC IFC could attract both domestic and international businesses and investors. companies.
Consideration should be given to flexible and remote working and to potential for offices both inside and outside
of HCMC IFC.

• In some cases, where financial centres become separate jurisdictions (e.g., DIFC model), changes to the country’s
constitution may be required. Would modest amendments to the constitution be required in Viet Nam to create
HCMC IFC and what steps would need to be taken to achieve that?

• Ensuring that business services and the regulatory environment are fair and open to all newcomers, with support
for those wishing to start businesses in HCMC IFC and Viet Nam.

• If the independent model were adopted, how to foster a strong legal and regulatory relationship between
HCMC IFC and key decision makers at the national level in Hanoi in relation to the conduct of regulated activities
and to the enforcement of court judgments. Ideally, this would result in formal recognition of the HCMC IFC
regulatory regime within greater Viet Nam (allowing, for example, an HCMC IFC authorised entity to sell its
financial products directly into the wider Vietnamese market without the need for dual authorisation). If the
independent model were adopted, the long-term sustainability and success of HCMC IFC (and its ability to have a
positive impact on Viet Nam’s economy) will largely depend on its bodies being able to work well with Viet Nam’s

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An overview of how a common law system An overview of how an upgraded

might work for the HCMC IFC regulatory framework might be developed
Many financial centres choose to base their laws on the English common law legal systems. The English Common law When considering how to approach the enhancement of the existing regulatory framework, the consultations with
is the most widespread legal system: over 40 countries and territories use common law, and over 60 use it as a part regulators, government and business identified the following points that could be considered:
of a mixed legal system, in which common law is blended with the local law. English common law is both familiar to
international financial institutions (many complex international financial agreements use English law) and flexible (using The types of financial activities to be conducted in and from HCMC IFC which could be expanded in the future.
court led jurisprudence). The common law underpins the legal systems of the world’s top international financial centres –
London, New York, Singapore, Hong Kong, as well as other IFCs such as Abu Dhabi. The integration of English law within  he structure, composition, and powers of the financial regulator so as to ensure compliance with international
T
Malaysia’s legal system has contributed tremendously towards the development of the mixed legal system (customary best practice and local buy in.
law, Islamic law, and common law), which is highly regarded in the region. While Viet Nam’s current system is a civil law
system, both the UAE and Kazakhstan – countries based on civil law system - have successfully incorporated common law Resourcing needed by the regulators to implement the new financial services regulations.
into DIFC and AIFC respectively.
 he preference for an ‘enclave’ model (e.g., DIFC) where membership is defined by residence within a defined
T
An independent judiciary and compliance with the rule of law inspires business confidence and underpins international
territory or the ‘club’ model (e.g., QFC and AIFC) where membership is defined by becoming a member of the
trade and investment. When considering how to benefit from the advantages of English common law, a further detailed
centre and following its rules.
assessment should be conducted as to how the HCMC IFC could work with the already existing legal systems in other IFCs
such as Singapore, AIFC and QFC, including whether to use their courts and dispute resolution mechanisms. Consideration
 he implementation of a regulatory framework that is clear, stable, consistent, and transparent which should
T
could be given as to whether HCMC IFC should develop its own court and dispute resolution centre, or whether it should
not be overly complex at the outset.
partner with another IFC with a similar common law based legal regime to deliver court and arbitral procedures that are
practical and innovative, while delivering cost-effective, swift, and efficient resolution of commercial and financial disputes.
The types of authorised financial activities and the level of regulatory supervision required by the
If a separate independent legal and regulatory regime is selected for HCMC IFC, it is likely to require a general legal HCMC IFC regulator.
framework (including basic laws such as contract, insolvency, company, etc.) which underpins a set of bespoke financial
regulations targeted at the desired financial activities for the IFC (e.g., capital markets, FinTech, green finance etc.) and A company registrar regime for the incorporation and establishment of legal entities as part of HCMC IFC.
a dispute resolution system. This will provide businesses and investors with the confidence that, should a dispute or a The types of legal entities that should be covered include public and private companies, limited partnerships,
legal matter arise (including where a state entity is a counterparty), they will have access to a legal system presided over limited liability partnerships.
by independent, common-law judges with the technical expertise to decide complex commercial and financial cases.
Whether the HCMC IFC develops its own court and arbitration system or makes use of an existing one, it will be essential Foreign ownership: other IFCs permit 100% foreign ownership of companies and land.
to ensure that a quick and effective system for the recognition and enforcement of judgments and awards is in place
within the wider Vietnamese legal system. For example, as an independent legal jurisdiction, DIFC has its own arbitration  raining that is provided to local professionals in relation to HCMC IFC rules and regulations, which will be
T
laws, which are modelled on English common law. The Dubai International Arbitration Centre is the region’s leading essential to ensure their buy-in and high-quality practical delivery.
centre for alternative dispute resolution to allow parties, with no limits on their jurisdiction, to resolve matters without
going to court. There are no obligations for parties to have any ties to the DIFC, Dubai, or the UAE in choosing the DIFC  hether to adopt English as the working language for the bodies of HCMC IFC (such as the court and
W
as their centre for dispute resolution. regulator), but with easy access to high quality rapid translation to and from Vietnamese.

If a hybrid model were adopted, consideration could be given as to how common law principles might be incorporated
Supporting upskilling of regulators, government, and professionals in business English.
into the operation of the specialist commercial court.

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Taxation and investment incentives Role of FinTech in financial centre ecosystem

Taxation is one of the key factors to address in an IFC. IFCs are often characterised by favourable tax regimes for foreign A proper regulatory regime and environment of an IFC needs to encourage FinTechs and foster innovation in a way
corporations. Favourable taxation regimes can attract capital from higher tax jurisdictions and can help to kickstart a that protects consumers and the wider market. Viet Nam will become the 10th biggest consumer market by 2030, and
new IFC, while favourable and extensive bilateral treaties act as conduits through which investments pass. For example, FinTech could provide a wide range of solutions that could tailor to country’s booming digital market.
Singapore provides full tax exemptions on most foreign income as well as various non-disclosure agreements, which
FinTech is changing the financial ecosystem as well as the requirements for IFCs. To develop as a FinTech hub, the
make it a popular conduit for inward investment in Asia. Other IFCs introduce temporary, yet significant tax breaks and
HCMC IFC needs to provide investors with the relevant infrastructure technologies and automated systems, such as
incentives to attract investment, which over time move towards standard tax rates.
data bridges with other countries, artificial intelligence, blockchain, etc. The HCMC IFC also needs to provide banks and
HCMC IFC may therefore wish to consider favourable tax treatment for investors, at least during the first years financial institutions with speedy and reliable Anti-money Laundering/ Know your Customer (AML/KYC) processes as
of establishment. Several alternative models could be explored in HCMC IFC including an offshore model, where well as relevant regulatory framework.
businesses that invest in Viet Nam through HCMC IFC pay less tax on profits from Viet Nam than they otherwise would
FinTech has become a central part of the global financial services landscape. In recent years, investment in the FinTech
or a model where tax incentives in the form of enhanced tax depreciation allowances (capital allowances). Other, less
sector has seen significant growth. Currently there are over 263 FinTech firms operating in Viet Nam, ranking only
favourable models include a double tax model, where businesses pay Viet Nam and HCMC IFC tax or a tax neutral
second behind Singapore in the ASEAN region for FinTech investment and sixth globally for the total number of FinTech
model. A separate study by TheCityUK could be performed to review this recommendation in more detail and to assess
firms in operation. Vietnamese FinTech already operates in e-wallet and digital payment, Peer to Peer (P2P) lending,
the feasibility of favourable tax treatment that could be applied to businesses operating in financial services in HCMC
blockchain/ cryptocurrency, point of sales (PoS), investment and wealth management, comparison, data management/
IFC. The following should be considered when implementing the tax regime for the IFC:
credit scoring, crowdfunding, InsurTech, digital banking and SME financing. The success of FinTechs is driven by their
increased risk appetite as well as their ability to bring innovation at a faster pace and reach population that is not
 hether there should be tax concessions/ tax holidays (and for how long) for business that establish themselves
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commercially always viable to large financial institutions. They can be a key driver of financial and digital inclusion as
in HCMC IFC and whether they should be open to all businesses – models that worked well in Singapore and
demonstrated by the impact of mobile money expansion in Kenya, where FinTech has lifted 2% of population out of
Kazakhstan. AIFC allows its participants to be exempt from Corporate Income Tax until 2066 for financial
extreme poverty. In addition, FinTech has significant job creation potential, with more than one billion jobs created by
services and ancillary services provided to licensed participants, no taxes on shareholder dividends, and places
the sector across developing markets. Being mostly small sized companies, FinTechs strongly depend on a simple, low-
no restrictions on the repatriation of profits.
cost regulatory environment which enables them to gain approvals and licences in an efficient manner. This requires
special policy and regulatory consideration by regulators, as well as supporting infrastructure, and improved access to
S hould a tax neutral approach be adopted, an assessment of the overall competitiveness of taxes in Viet Nam
both traditional and new sources of finance.
should be undertaken as well as relevant legislative and regulatory reviews, tax law interpretation and its
application in practice. The standard approach to tax application should be implemented to address current Creating a successful FinTech ecosystem is complex. To create a booming sector that attracts investment requires
issues with the practical application of tax laws. It will be also vital to assess whether simplifying the tax code collaboration and alignment of a diverse portfolio of stakeholders: FinTechs, banks, regulators, investors, telecom
could help encourage more foreign investment into Viet Nam. providers, etc., across several dimensions (demand, governance, policy, infrastructure, technology, talent, financing).

The UK is a world leader on the international FinTech stage, ranking number two in the world behind the US. This
If non-financial sector holding or treasury companies can establish within the HCMC IFC, the right tax regime multi-billion tech sector is a major employer and plays a leading role in the development of innovative technologies. As
should be applied. This could be done in three ways: (i) a company based in HCMC IFC but carrying business in a leading global FinTech hub, the UK is supported by a large financial services market, forward-looking government and
Viet Nam could pay double tax (i.e., a tax in HCMC IFC and standard Viet Nam tax rates); (ii) pay low level tax in a regulatory environment that facilitates and supports innovation.
HCMC IFC and no tax in Viet Nam; or (iii) pay the same amount of tax as a normal business in Viet Nam.
There are numerous international approaches that could be adapted to Viet Nam, including the UK ‘test and learn’
E stablish clear requirements for businesses that are not wholly based in Viet Nam, model of regulation (also adopted by Singapore), UK-pioneered regulatory sandboxes (now implemented in many
in line with Double Taxation Agreements (DTAs). other jurisdictions), Singapore’s model for attracting and developing talent and relevant infrastructure, or FFZs as
adopted by the UAE. DFIC has various FinTech incentives, including the DFSA’s sandbox (the ‘Innovation Testing Licence

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Human capital and talent development

Programme), an Innovation Hub with an accelerator programme and an open finance lab, as well as numerous FinTech Financial centres can bring significant talent development and management challenges for financial services
cooperation agreements with international counterparts. organisations as well as associated supporting industries. A large and deep talent pool to deliver professional and
quality services is fundamental to developing and maintaining IFC competitiveness. In the UK alone, the financial and
Viet Nam’s FinTech has so far received active support from the government, and more specifically from the SBV. The
related professional services industry employs more than 2.5 million people right across the country, representing 12%
Financial Technology Steering Committee was formed, and in 2021 a proposal to develop a decree on a regulatory
of GDP. In Singapore, the industry employs 209,200 people and represents 14.6% of GDP respectively7. By April 2023,
sandbox for FinTech activities within the banking sector was approved. In addition, the Law on Insurance Business
Viet Nam will become 15th largest population in the world, yet its financial services sector currently employs only
that was passed in 2022 contains a dedicated section on digital transformation of the insurance industry, including
484,600 people and represents 4.7% of GDP8.
InsurTech.
IFCs take different approaches to talent development. There is typically a strong openness to international professionals
If Viet Nam’s authorities are looking to increase investment into FinTech sector and create a light-touch regulatory
who can move freely in and out of the country (the UK for example). Developing and retaining domestic talent is
environment that extends to the entire FinTech ecosystem, the scoping study, that could be conducted in the next
also a key area of focus. To deliver on its goal of becoming a high-income country by 2045, Viet Nam needs to focus
phase of TheCityUK’s project should assess:
on developing its domestic talent and align its education with international best practice, including through bilateral
initiatives (e.g., the MoU between the Association of Certified Chartered Accountants (ACCA) and HCMC University of
 ow to develop the national FinTech development strategy and link it to the broader needs of Viet Nam’s
H
Banking, signed in March 2023, and other similar MoUs, including with the Ministry of Finance and SBV.
economy, including Vision 2045.
Given Viet Nam’s demographic dividend, authorities designing the IFC should prioritise both areas: to skill and upskill
 ow to create right-touch FinTech regulation and licencing regime to help start-ups and to help
H domestic talent in a systemic and targeted way so that HCMC IFC can be driven by Viet Nam’s workers, and review
FinTechs scale internationally. international work permits to allow top international talent to work in Viet Nam. This could be achieved by either by
improving the existing work permit and employment rules and regulations or creating economic free zones in several
How to collaborate with education sector to create/upskill talent and build digital skills to encourage innovation. parts of the country.

Recommendations for developing domestic talent include:

 eview the current technology ecosystem and digital infrastructure and explore how different technologies and
R
services (internet, mobile data, featurephones, smartphones, social platforms, etc.) could be integrated with •A
 ttract and develop talent through outreach to schools, universities, and foster partnerships between businesses
FinTech offerings and support Viet Nam’s transition towards electronic payments. and universities. Consider how local universities and colleges can partner with IFC authorities and firms to hire
graduates and provide relevant training to develop talent at junior level. Shanghai Financial Centre has a wide
 ow to enhance regulatory coordination and collaboration across the various existing sandboxes would deliver
H talent pool with over 300,000 financial professionals, nearly 50% of whom have gained overseas experience either
even greater benefits and leverage these tools to full effect. The work done in South Africa to coordinate in education or work. In 2009, the Lujiazui Talent Recruitment Initiative was launched to further attract the best
regulatory sandboxes provides a good model for consideration. In addition, the authorities should consider talent from China’s top universities to join the district’s top financial institutions.
the kinds of technologies that the HCMC IFC would need to succeed, the level of investment and the relevant
• L ink talent development and human capital to the Socio-economic Development Plan to increase investment in Viet
partnerships that are essential to ensure such technologies are available.
Nam assets and its domestic capital.

F inally, some thought could be given to the pros and cons of introducing trading in cryptocurrencies, including •C
 onsider how the Viet Nam Ministry of Education and Training could work with IFC authorities to develop a future
whether HCMC IFC could encourage cryptocurrency mining and blockchain technology within industry. talent pipeline (including English language skills) as well as an enhanced competency framework of the public

7
 ttps://stats.mom.gov.sg/Pages/EmploymentTimeSeries.aspx 2021 data https://www.singstat.gov.sg/modules/infographics/economy 2021 data
h
8
https://www.gso.gov.vn/en/px-web/?pxid=E0239-40&theme=Population%20and%20Employmenthttps://www.gso.gov.vn/en/national-accounts/ 2021 data

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sector education at all levels of education to provide access to high-level education to people of all backgrounds. •C
 onsider collaborating with Centres of Excellence (i.e., the RMIT Centre of Digital Excellence) to develop the
This is a long-term solution that fits well into Viet Nam’s economic agenda. However, significant thought should be knowledge and skills of new and existing professionals in relevant fields.
given to how to align the timelines of IFC development with education reforms.
In addition, to attract talent, the HCMC IFC should consider implementing attractive, open, straightforward, and speedy
• Upskill the existing workforce by investing in training and development and hands-on skills progression, updating visa and residency regimes that will increase Viet Nam’s access to a range of talented employees. As many financial
degree programmes (especially in science, technology, engineering and mathematics (STEM)), establishing tailored centres are experiencing shortages in financial and related professional services expertise, an efficient and accessible
training to target skills shortages, introducing incentives to train in areas with expertise shortages, upgrading digital business and residency visa system is critical to the existence of an open immigration regime. This would allow the
education, and facilitating knowledge transfer through international partnerships with relevant skills development HCMC IFC’s domestic and expatriate employees to travel freely. DIFC has been successful at developing, attracting,
organisations such as ACCA, British University Viet Nam (BUV), Institute of Chartered Accountants in England and and retaining talent, including by promoting an environment with a high quality of life. It has made it easier for foreign
Wales, (ICAEW), etc. workers to live and work in Dubai and introduced new visa categories for skilled workers. DIFC has a very liberal visa
regime, allowing members to apply for as many work permits as necessary for a 10-year period. This has allowed DIFC
• Support and expand an integrated programme between a UK/International professional qualification and Viet
to significantly grow its workforce and talent pool – making it the largest and most diverse pool of industry talent in the
Nam’s higher education’s syllabus, which was implemented from 2016 by ICAEW with several top universities in
region – while developing their own leading hub for talent. As a result, DIFC was ranked among the top 25 countries in
Viet Nam (including National Economics University (NEU), University of Economics HCMC (UEH) and University of
the 2022 Global Talent Competitiveness Index Report, ahead of its peers in the region. Abu Dhabi has recently extended
Economics and Law (UEL), etc.) in order to increase the practical knowledge and skills of graduates in following
its visa regime to follow DIFC model as well as offer incentives and attractive ecosystem to international talent, while
international standards.
developing domestic talent by collaborating with schools and universities. Hong Kong introduced various admission
• Develop an integrated approach to talent identification and development that provides a complete view of the schemes for talent, professional, and entrepreneurs, offering extended visas to skilled foreign employees, increasing
financial sector. talent flow into its economy. Other IFCs focus on building their own domestic talent while also having an open visa
regime to attract international talent, as well as partnering with other financial centres to learn from each other. It will be
• Reskill talent through continuing professional development and developing partnerships with international
vital to discuss this aspect with the relevant government authorities to determine their policy towards issuing work and
professional institutes and professional development providers.
residence permits for international employees and their families.
• Provide suggestions on how Viet Nam’s education system can be tailored to supply the right skillsets that match
Moreover, to assist in the development of a strong financial ecosystem, HCMC IFC needs to consider creating an
demand of the financial and related professional services industry. A dynamic response to the market needs
attractive offer for a range of a highly skilled domestic and international financial and related professional services
education and a vocational training system will maintain country’s competitiveness in the long term, with students
professionals and their families to base themselves in the new centre and help develop its infrastructure and business
developing other skills such as critical thinking, problem solving, change management and analytical abilities. An
environment. To retain and attract talent, networks that support local workforces and provide attractive working
agile, flexible workforce is essential to respond to constantly changing business needs as the HCMC IFC develops.
environments should be developed. Domestic and international professionals should be able to benefit from proximity
• Should English law be adopted within HCMC IFC, the authorities should consider how the country can best train to good schools and education facilities, reliable healthcare, high-quality transport infrastructure and links (including
and upskill existing lawyers, potential new lawyers, and industry practitioners in English law. efficient and speedy airport infrastructure), ICT infrastructure and cultural activities. Abu Dhabi has positioned itself as
an attractive destination for families, while UK and Singapore appeal more to younger workers.
• Recognise Viet Nam’s considerable efforts to engage with international educational institutions (ACCA, LIFB,
ICAEW, BUV that offer UK qualifications) and suggest ways in which authorities can build on these initiatives.

• Consider the potential for the British Council and other organisations to assist in skills development in Viet
Nam, including through English language and business English language courses and relevant professional skills
development training.

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Conclusions and next steps

The Government of Viet Nam has embarked on an ambitious programme of economic reforms to meet its high-income This report is intended to cover key aspects and potential best practice for the development of the HCMC IFC. It is
country goal by 2045 and net-zero carbon emission agenda by 2050. A range of positive efforts have been made by not a comprehensive guide. The recommendations in this report have drawn on the various consultations held with
the government and other stakeholders to meet these goals, including a commitment to creating a strong financial and key Vietnamese and UK stakeholders, as well as the input of the UK-Viet Nam HCMC IFC working group and should
related professional services ecosystem. provide a basis for discussions on the HCMC IFC and its role in the broader Vietnamese economy. Further research and
consultations are required to identify the relative merits of the HCMC IFC and its USPs to support this initial phase of
Such an ecosystem will enable Viet Nam to further leverage its key role in global value chains and to capture the
work. At the same time, there are various short-term priorities that the Vietnamese authorities can already implement.
advantages of global trends, including digitalisation. Developing the HCMC IFC could form a critical pillar of the next
These incremental changes are relatively easy to implement, but should have high impact, and will help to better
stage of Viet Nam’s economic reform programme. There are many different models of financial centres, but one
position the HCMC IFC in case a shift to an independent IFC model is desired in future. These include:
aim they all share is to provide the right regulatory and business environment to attract regional and international
investment and to accelerate the development of domestic financial markets and the economy as a whole.
F ormally including and elevating the development of HCMC IFC in the national agenda. By highlighting its role
The Government and steering committees at the national and regional level should also explore whether an ‘all in one in the Vision to 2045 and net-zero by 2050 efforts, this will help ensure that sufficient resources and political
go’ or a step-by-step organic growth approach is more suitable for the establishment of the HCMC IFC. While no IFC will are behind this important initiative and gain support at the ground level.
is identical, each centre benefits from particular strengths which stem from its history or geography. Therefore, when
deciding on the most suitable path for the HCMC IFC, the Government of Viet Nam should consider its strengths and E stablishing an international dispute resolution mechanism, such as an international arbitration centre
relative merits, and how to develop its own USP. Factors such as Viet Nam’s standing as a trading centre and role in or entering into collaboration agreements with the London Court of International Arbitration to set up a
global value chains, its geographical position and location within the ASEAN region, access to commodities and other branch in HCMC.
agricultural products, as well as its long coastline well-suited for offshore wind projects will inform the type of IFC
model for HCMC and Viet Nam. E asing the visa regime for the international professional workforce, in particular in the financial sector.
The influx of international expertise will benefit the Vietnamese economy and also help develop its local talent.
It will be important to set clear strategic objectives for the HCMC IFC which align with the national agenda and to
identify the key financial activities based on Viet Nam’s USP that will be promoted in HCMC IFC. These strategic
E stablishing and implementing a National FinTech Strategy.
objectives could be accompanied by more granular objectives and policies that can be achieved in the short and
medium term. It would be useful to establish a system of five-year plans which are regularly reviewed and reset if
D
 eveloping a strategy for green and sustainable finance that has HCMC IFC’s capabilities at its core.
needed to take into account any developments. The strategic objectives could include a commitment over time to move
Consider how HCMC IFC can facilitate the JETP initiative.
towards the features of the independent model set out above.

Establishing the HCMC IFC – first by modifying and upgrading the existing regulatory and legislative framework before A
 dopting IFRS accounting standards.
considering in future a shift towards the establishment of a distinct and separate jurisdiction – can help the country
develop its financial market and offerings. This will enable it to service international investors domestically, create A
 llowing businesses to hold FX accounts.
stronger capital markets benefiting Vietnamese businesses, and deepen its integration into the international financial
system. At the same time, the IFC can also create the impetus for improving infrastructure, developing the skills of the Developing HCMC IFC will bring many challenges and requires government departments, regulators, and businesses to
local labour force, and developing as a hub for FinTech and digital services. work closely around a common vision of country’s future and for the HCMC IFC. However, the 2045 aspirations provide
a framework for this initiative, including the establishment of two steering committees. TheCityUK is committed to
supporting Viet Nam in this endeavour and values the opportunity to contribute to the development of the HCMC IFC.

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Acknowledgments Acronyms
TheCityUK would like to thank the UK Government, the British Embassy in Hanoi and British Consulate General in ACCA Association of Chartered Certified Accountants ICAEW Institute of Chartered Accountants in England
HCMC for their partnership throughout this project. Special thanks to Iain Frew, HM Ambassador in Viet Nam, H.E. ADGM Abu Dhabi International Financial Centre and Wales
Nguyen Hoang Long, Viet Nam Ambassador to the UK and their respective teams, as well as Mark Garnier, the Prime AIFC Astana International Financial Centre ICT Information Communications and Technology
Minister’s Trade Envoy to Thailand, Myanmar, Brunei, and Viet Nam. AML Anti-Money Laundering IFC International Financial Centre

We would also like to extend special thanks to the Ministry of Planning and Investment, the State Bank of Viet Nam, Ho ASEAN Association of Southeast Asian Nations IFRS International Financial Reporting Standards
Chi Minh City External Relations Office, the Ho Chi Minh City Finance and Investment Company, the HCMC People’s BCAC British Corporate Advocacy Council InsurTech Insurance Technology
Committee, and the Ho Chi Minh City Stock Exchange for their contributions. BUV British University Viet Nam ISSB International Sustainability Standards Board

CPTPP Comprehensive and Progressive Agreement for JETP Just Energy Transition Partnership
We would also like to thank working group members for giving their time and expertise in helping formulate the
the Trans-Pacific Partnership KYC Know your Customer
recommendations found in this report, who include:
DIFC Dubai International Financial Centre LIBF The London Institute of Banking and Finance
• Association of Chartered Certified Accountants (ACCA)
DTA Double Taxation Agreement LSEG London Stoch Exchange Group
• British Corporate Advocacy Council (BCAC) Members: AstraZeneca, British University Viet Nam (BUV), Diageo, Dragon ERO Ho Chi Minh City External Relations Office MPI Ministry of Planning and Investment
Capital, Grant Thornton, HSBC, Jardines, KPMG, Prudential, Standard Chartered, Unilever FCDO Foreign and Commonwealth Development MoF Ministry of Finance
Office NEU National Economics University
• British Chamber of Commerce Viet Nam
FDI Foreign Direct Investment PoS Point of Sale
• Clifford Chance FinTech Financial Services Technology P2P Peer to Peer Learning
• HSBC FFZ Financial Free Zone QFC Qatar Financial Centre
FRPS Financial and Related Professional Services RFC Regional Financial Centre
• Institute of Chartered Accountants in England and Wales (ICAEW)
FTA Free Trade Agreement RCEP Regional Comprehensive Economic Partnership
• KPMG
FX Foreign Exchange SBV State Bank of Viet Nam
• The London Institute of Banking and Finance (LIBF) GDP Gross Domestic Product SME Small and Medium Enterprise
GFCI Global Financial Centres Index SOE State Owned Enterprise
• London Stock Exchange Group (LSEG)
HCMC Ho Chi Minh City SPV Special Purpose Vehicle
• Michelmores
HCMC IFC Ho Chi Minh City International Financial and SSC State Securities Commission of Viet Nam
• Prudential Business Centre
STEM Science, technology, engineering, and
HUB Ho Chi Minh City University of Banking mathematics
• Simmons and Simmons
HFIC Ho Chi Minh City Finance and Investment UAE United Arab Emirates
• Standard Chartered State-Owned Company
UEH University of Economics HCMC ()
HNX Hanoi Stock Exchange
UEL University of Economics and Law
HOSE Ho Chi Minth City Stock Exchange
UK United Kingdom
IAC International Arbitration Centre
US United States of America

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TheCityUK Research:
For content enquiries, further information on this report, please contact:

Anna Rogers, Head, International Development

[email protected]
+44 (0)20 3696 0121

British Consulate-General | 25 Le Duan, District 1, Ho Chi Minh City, Viet Nam

Tel: +84 903 056 988

TheCityUK, Fitzwilliam House, 10 St Mary Axe, London, EC3A 8BF

www.thecityuk.com
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