Vietnam's Financial Hub Initiative Attracts Over $21 Billion in Pledged Capital

The Vietnam International Financial Centre in Ho Chi Minh City (VIFC-HCMC), established less than half a year ago, has successfully attracted over $21 billion in pledged capital and investment promotion. This marks a significant step towards boosting Vietnam's economic growth and enhancing its standing in the global financial landscape. However, transforming these substantial commitments into actual capital flow into the economy hinges on the effective promotion of policy solutions, international cooperation, and the strategic advice from the newly formed expert advisory council. Key components of VIFC-HCMC, such as the Aviation Finance Centre, Fintech Hub, and Maritime Finance Ecosystem, are already operational. To further steer its development, an advisory council comprising 13 members was established on July 12th to support the governing board in strategy formulation, financial product development, ecosystem building, and enhancing international connectivity. The significant capital pledges within a short period underscore the potential of a nascent financial hub in Vietnam's most dynamic economic region. Nevertheless, experts emphasize that pledged capital does not equate to immediate disbursement into the economy. According to Associate Professor, Dr. Nguyen Huu Huan, Deputy Chairman of the VIFC-HCMC Governing Board, "The ultimate goal is not the principled investment commitments on paper, but how to convert them into actual financial transactions, creating real capital flow into the economy." International financial capital inherently demands stringent conditions regarding safety, liquidity, and profit margins. Therefore, transitioning from commitment to disbursement requires a portfolio of eligible projects with complete legal documentation and clear repayment mechanisms, the utilization of diverse capital mobilization tools like international and green bonds, investment funds, and specialized financing, the establishment of risk-sharing mechanisms through guarantees and credit ratings involving development institutions, and the concretization of each investment commitment into an action plan with defined projects, capital scale, and implementation timelines. Cooperation with international partners, particularly South Korea, offers valuable insights from its experience in building successful financial centers like Seoul, Busan, and Incheon. As Vietnam and South Korea elevate their relationship to a Comprehensive Strategic Partnership, combining Vietnam's dynamic market with South Korea's expertise in fintech and digital financial infrastructure is poised to be a major catalyst for VIFC-HCMC's growth, especially in the context of global digital transformation and AI. Potential areas for early collaboration include cross-border QR code payment connectivity, bond market development, and enhanced linkages between financial institutions of both countries. Recognizing both opportunities and challenges, the VIFC-HCMC Governing Board and the Ho Chi Minh City administration are proactively implementing comprehensive solutions to unlock foreign capital. A top priority is close coordination with central ministries to review the legal framework. The city is proposing amendments and supplements to detailed regulations on member management, foreign exchange, cross-border capital flows, anti-money laundering, and controlled testing mechanisms (sandbox) to create a transparent, attractive, and regionally competitive investment environment. Looking ahead, VIFC-HCMC aims to launch its first financial products by the end of the year, prioritizing investment funds, international bonds (urban, infrastructure, corporate), and a green finance ecosystem with ESG loans and impact investment products. The center will also promote cross-border payment sandboxes, digital finance development, and prepare for the launch of a commodity exchange focused on its strong agricultural products. Furthermore, the development of synchronized technical infrastructure and the attraction of member financial institutions are crucial. The city is accelerating investment in high-security digital infrastructure with seamless global connectivity and building a focal point mechanism to support banks, securities firms, fund management companies, auditing firms, and international arbitration bodies seeking to establish a presence. The successful transformation of commitments into real capital flow, driving growth and elevating Vietnam's financial stature, will ultimately depend on the refinement of the governance structure, informed by the advisory council, and coupled with high-quality human resource training programs. Source: Nhan Dan