Vietnam advances plans for international financial centre as trade risks grow
FILE PHOTO: A container ship sails past a luxury apartment complex in Ho Chi Minh City on December 3, 2021. The financial centre will operate in both financial hub Ho Chi Minh City and tourism-focused Danang.- AFP
HANOI: Vietnam is moving forward with plans to establish an international financial centre to enhance its role in the global financial market and attract international capital flows, Finance Minister Nguyen Van Thang told parliament on Tuesday (June 10).
The initiative could position Vietnam as a regional hub for financial activity, boosting its economic influence, according to Thang and a draft plan, now in its 30th version, seen by Reuters.
The draft includes policies covering foreign exchange liberalisation, banking activities, capital market development, tax incentives and labour provisions targeting experts and investors.
Foreign investment inflows into Vietnam in January-May rose 7.9 per cent to US$8.9 billion, the government said, while foreign investment pledges were up 51.1 per cent to US$18.4 billion.
But the United States has threatened heavy tariffs on Vietnamese-made goods if it does not make major concessions, which could dampen its investment momentum. The country is an important manufacturing base for companies ranging from Samsung Electronics, Foxconn and Intel to Nike and Adidas.
The National Assembly, Vietnamese parliament, will vote on the resolution on June 27.
A key feature allows members of the financial centre to use foreign currency for transactions and secure international financing, according to the draft.
"Members are permitted to establish trading floors and platforms for commodities, carbon credits, cultural products and innovative startups," the draft said.
Two sources familiar with the matter confirmed the draft as the latest version. Administrative procedures will be simplified, the draft added, creating more favourable conditions for participants.
The financial centre will apply accounting and financial standards, including minimum capital adequacy and liquidity ratios, specific to both 100 per cent foreign-owned banks and domestic banks, aligning with international practices.
It will operate across two cities: financial hub Ho Chi Minh City and tourism-focused Danang.
The government had earlier set a goal to have the centres operational this year. - Reuters
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