INTERNATIONAL INVESTMENT
AND PORTAL
This initiative is viewed as a transformative opportunity to connect Vietnam with global financial markets, attract foreign institutions, and mobilise investments.
Vietnam’s equity capital markets have stagnated in recent years, as evident by a slowdown in new listings and a decline in total market capitalisation. Market capitalisation reached a peak of $302.8 billion in 2022 and dropped to $279.2 billion by Q3/2024. The number of listed companies has also declined, falling to 1,589 in Q3/2024, a decrease from the peak in 2020. Listing requirements such as profitability metrics limit the ability of innovation sectors, such as tech companies, to access public markets.
Similarly, Vietnam’s debt capital markets after an initial buoyant period, also face challenges, with corporate bond issuance and deal closures declining from 2,211 bonds issued in 2020 to just 268 by Q3/2024. As the bond markets are still relatively young, the compliance and regulatory frameworks are still evolving. A significant portion, 33 per cent, of credit allocation is directed towards the real estate sector, which accounts for approximately 10 per cent of GDP.
Against this background, the establishment of an IFC in Vietnam is a welcome development in creating momentum for financial sector development. Amongst notable objectives is the focus on policies to simplify administrative procedures for establishing entities, adopting IFRS accounting standards, and implementing regulatory sandboxes for fintech.
At the intersection of financial services and technology, fintech companies are increasingly an important part of well-functioning and innovative markets. Digital financial services offer cost-effective solutions for traditional ones, enhance inclusion to reach rural and underserved populations, and facilitate integration with global markets.
The plan for Vietnam’s IFC introduces regulatory sandboxes for innovative tech, including blockchain and digital assets. In our view, policy directions to provide a clear path to make an IFC attractive and effective from a fintech perspective could encompass five key strategies.
Firstly, a robust regulatory framework for sandboxes encourages financial and tech innovation by allowing businesses to experiment without needing full national legislation and regulatory approval. This includes adopting international standards such as collateral pledge mechanisms, standard documentation such as LMA for loan facilities and ISDA for derivatives, within a controlled testing environment to accelerate capital markets development.
Secondly, expanding Vietnam’s licensing framework for digital services could allow market entry for more participants to unlock innovation. Currently, licensed lending, whether digital or physical, is restricted to a limited number of players, with 16 consumer finance companies.
A broader licensing regime that includes digital payments, lending, investments and other digital finance products could provide a more levelled playing field and improve consumer credit access. Additionally, formalising licensing for digital assets and expanding digital assets services to include trading, custody and exchange could unlock further innovation in decentralised finance.
Next, to position Vietnam as a financial hub, a proven strategy from neighbours such as Singapore is to offer targeted incentives to companies to establish their regional or global headquarters in the country. While the government’s policy outlines general benefits for IFC participants, focusing on corporate and personal income tax advantages for companies that make Vietnam their financial and operational headquarters can make Vietnam more appealing to regional and global players. Another aspect is building a strong tech ecosystem. Vietnam’s STEM proficiency and substantial tech workforce of approximately 530,000 IT developers and over 50,000 IT graduates entering the workforce annually presents a unique opportunity to build an ecosystem to attract fintech companies.
To sustain and enhance this advantage, further investment in education, not only in foundational STEM education but wide availability of specialist training in disciplines such as product management, system architecture, and data science, is necessary to ensure a continuous supply of skilled professionals.
The final factor is digitalising financial market infrastructure. With modernising markets a key policy objective to Vietnam’s IFC vision, related infrastructure such as trade settlements, collateral management, title registrations could be performed on digital platforms.
While it is still early days into the path for establishment of an IFC, the initiative provides a policy fulcrum to propel Vietnam’s financial markets development forward. It is an opportunity for private and public sector participants to work together to deepen capital markets, enable innovation, and use the technology edge to full advantage.


The International Finance Corporation (IFC), a member of the World Bank Group, is proposing a $50-million loan to HD Saison Finance Co., Ltd., the fourth-largest retail finance company in Vietnam.

Vietnam is planning to establish a regional financial centre in the central city of Danang and an international-scale one in Ho Chi Minh City. British consul general Alexandra Smith spoke with VIR’s Thanh Tung about how this can be realised.