Institutional Framework for the International Financial Center in Vietnam

Resolution No. 222/2025/QH15 of the National Assembly on the International Financial Center in Vietnam (“Vietnam IFC”) has introduced a series of special policies, ranging from tax incentives and foreign exchange policies to labor support and infrastructure development. These policies are not only aimed at attracting global financial institutions but also at creating favorable conditions for domestic enterprises to grow. The promulgation of Resolution 222 by the National Assembly is considered a strategic move to establish an enabling environment for international financial activities, attract foreign investment, and foster innovation. Vietnam IFC is expected to become a competitive financial hub in the region, making an important contribution to Vietnam’s economic development and international integration in the new phase.

Key contents of the policies and assessment of their impacts on Vietnam as well as on investors under Resolution 222:

CONTENTS	PROVISIONS	ASSESSMENT
Foreign Exchange Policy (Article 16)	- Members of Vietnam IFC are permitted to use foreign currency in transactions, payments, and pricing between members or with foreign parties (when transacting with non-members within Vietnam’s territory, they must comply with prevailing foreign exchange regulations). - Foreign investors may transfer capital, profits, and other lawful income into and out of Vietnam IFC through foreign currency accounts at authorized financial institutions.	This policy provides significant flexibility for international financial activities, helping reduce exchange rate risks and facilitating global investors. However, such liberalization also entails risks of volatile capital flows. Therefore, Vietnam must establish robust supervisory mechanisms to effectively manage capital inflows and outflows. A regime that is both flexible and sufficiently stringent is essential for an IFC institution.
Tax Policy (Article 19)	- Corporate Income Tax (CIT): Priority projects in the IFC enjoy a 10% CIT rate for 30 years, with up to 4 years of tax exemption and a 50% reduction for the following 9 years. Other projects are subject to a 15% CIT rate for 15 years, with up to 2 years of exemption and a 50% reduction for the following 4 years. - Personal Income Tax (PIT): (1) Experts, managers, and investors (both domestic and foreign) are exempted from PIT until 2030. (2) Individuals with income from capital transfers (shares, equity, capital contribution rights) are exempted from PIT until the end of 2030. - Import–Export Tax: Goods within the IFC benefit from preferential tariffs and simplified procedures.	Compared to Vietnam’s standard CIT rates (15%–20%), the 10%–15% rates at the IFC are highly competitive, even lower than Singapore (17%) and Hong Kong (16.5%). However, reduced fiscal revenues from these incentives may create pressure on public finances if not matched by corresponding economic growth. A clear strategy is needed to ensure tax exemptions and reductions generate long-term added value. Moreover, Vietnam must carefully review its commitments under international treaties to introduce appropriate reservations and avoid potential violations when implementing IFC-specific policies affecting non-members.
Visa, Residency, and Labor Policy (Articles 18, 20)	- Foreign experts, strategic investors, and skilled workers are granted visas and residence permits of at least one year with simplified procedures. - IFC members may autonomously determine salaries and bonuses and receive state budget support for human resource training for 4 years starting from 2026. - Both domestic and foreign employees at Vietnam IFC are eligible for social, health, and unemployment insurance programs. Foreign employees already covered abroad may be partially exempt from contributions. Local authorities also provide housing and welfare support for workers.	- This policy helps attract international talent, a key factor in building the IFC into a leading financial hub. However, prioritizing foreign labor may create pressure on the domestic labor market unless accompanied by upskilling programs for Vietnamese workers. - State-funded training programs are a positive solution, but their quality and alignment with actual needs must be ensured.
Infrastructure Development Policy (Article 27)	The IFC is prioritized for modern infrastructure development, funded by the state budget and other lawful sources over 10 years. Investors may advance capital and be reimbursed or credited, while imported equipment is exempted from duties.	Modern infrastructure is fundamental for Vietnam IFC to compete with international financial centers. However, the large investment costs demand effective management to avoid waste. Public–Private Partnership (PPP) models may be an optimal solution to reduce fiscal burdens, particularly as Vietnam requires diverse financial resources for development. Mobilizing private sector participation in infrastructure investment is therefore essential.
Financial Innovation and Fintech Policy (Article 24)	- A regulatory “sandbox” is applied to test new financial and technological models under the supervision of competent authorities. Participants in this mechanism are exempted from certain legal requirements during the trial period. - Additionally, areas such as green finance, digital assets, and Fintech are entitled to special incentives as determined by the governing body of Vietnam IFC.	International experience shows that regulatory sandboxes foster innovation, particularly in Fintech. Early adoption of this mechanism will help Vietnam keep pace with global trends. However, strict supervision is needed to prevent systemic risks, as failures of trial models in sensitive sectors such as finance and banking could cause financial losses and systemic instability.
Dispute Resolution Policy	- Disputes within Vietnam IFC may be resolved through domestic courts, domestic arbitration, or international arbitration, depending on the parties’ agreement.  - Notably, Resolution 222 allows investors to settle disputes through an arbitration center established directly under Vietnam IFC.	Vietnam is seeking to establish a distinct mechanism to resolve disputes arising within or related to Vietnam IFC, in addition to existing mechanisms. Flexibility in dispute resolution strengthens investor confidence, but effectiveness depends on the quality of the legal system and enforcement bodies. For investors, expectations extend beyond efficient dispute resolution within the IFC itself to the broader Vietnamese market.
Other Special Policies (Articles 26, 28, 29)	- Policy on Strategic Investors: Strategic investors are granted priority in major projects, land allocation without auction, and participation in the planning of Vietnam IFC, subject to long-term investment commitments. - Trade and Customs Policy: Goods within Vietnam IFC benefit from simplified customs procedures and are exempted from duties on items that are not prohibited or restricted. - Fees and Charges Policy: Local authorities have the authority to adjust fees and charges, with the revenues reinvested into infrastructure development for 10 years.	- The strategic investor policy attracts major investors, but oversight mechanisms are required to ensure compliance with commitments and prevent abuse of incentives. - Trade and customs policies reduce costs and time for enterprises, but strict control is necessary to prevent illicit goods. - Fee and charge policies enhance flexibility and ease the burden on businesses, but transparency in revenue use must be guaranteed.