Decision 114: The Action Plan That Will Make—or Break—Vietnam’s IFC Ambition

1. From Vision to Execution: Legal and Regulatory Foundations

Decision 114 lays out a multi-phase regulatory reform process focused on harmonizing Vietnam’s financial laws with international standards. Key early-stage priorities include:

• Banking and securities frameworks: revision of licensing rules for cross-border financial institutions and the creation of a transparent capital market structure aligned with IOSCO principles.

• Payment systems modernization: interoperability between digital payment providers and banks, setting the foundation for multi-currency transaction clearing within IFC zones.

• Governance and transparency standards: the introduction of enhanced disclosure rules and dispute resolution mechanisms compatible with international arbitration.

These reforms aim to establish legal certainty — a prerequisite for foreign banks, funds, and fintechs to operate efficiently within Vietnam’s IFC jurisdictions.

2. Infrastructure Commitments: The Digital and Physical Core

A central component of Decision 114 is infrastructure readiness, combining both physical and digital layers:

• Data centers and cloud infrastructure: The plan explicitly mentions the establishment of sovereign-grade financial data centers to support real-time settlement systems, fintech sandboxes, and digital asset custody.

• Settlement and clearing systems: A national financial transaction switch is being developed to link Vietnam’s IFCs with ASEAN and global markets.

• Arbitration and compliance hubs: Construction of international arbitration facilities is planned to strengthen investor protection and legal recourse within IFC zones.

This integrated approach signals that Vietnam’s IFC strategy is not limited to policy design—it is an infrastructural transformation agenda.

3. Human Capital and Mobility: Building the Talent Base

Recognizing that human capital will determine IFC competitiveness, Decision 114 dedicates a full section to talent strategy:

• Partnerships between Vietnamese universities and global financial institutions to train professionals in investment management, risk analytics, and compliance.

• Introduction of long-stay financial talent visas and streamlined work permits to attract experienced professionals from Singapore, Hong Kong, and Europe.

• Establishment of continuous professional development (CPD) programs to raise domestic expertise in banking, insurance, fintech, and capital markets.

This marks a strategic pivot: Vietnam aims not just to host financial activity, but to cultivate its own knowledge-based financial ecosystem.

4. Market Acceleration: Fintech Sandboxes and Pilot Programs

The IFC Action Plan encourages sandbox models for early-stage financial innovation:

• Fintech and digital asset pilots: Decision 114 explicitly allows experimental licensing for green bonds, digital custody services, tokenized assets, and FX-denominated instruments.

• Blended finance frameworks: Hybrid public-private capital structures will be tested to channel investment into renewable energy and infrastructure projects within IFC jurisdictions.
  These sandboxes are expected to open by mid-2025, providing a real-time test environment for local and international investors.

5. Risks and Opportunities: Timing Is Everything

The speed and coordination of implementation will determine whether Vietnam can capture its “IFC moment.”

• Opportunity: Early movers stand to gain preferential licensing, visibility in sandbox trials, and long-term partnership status with regulators.

• Risk: Regulatory fragmentation or delayed issuance of circulars could slow adoption, particularly in cross-border banking and digital asset markets.

Institutional investors are advised to:

• Engage early with local partners and advisory firms to monitor regulatory sequencing.

• Prioritize sandboxable products—digital payments, green financing, or custody solutions.

• Structure pilot partnerships to align with both policy timelines and incentive programs under Decision 114.

VCAP Partners’ Perspective

At VCAP Partners, we view Decision 114 not merely as a policy update but as a market-opening mechanism that redefines the investment landscape. Our team supports institutional clients in:

• Mapping regulatory and policy timelines for IFC participation,

• Structuring sandbox-compliant proposals for fintech, banking, and capital market products, and

• Facilitating introductions to partner banks, data infrastructure providers, and human capital networks.

Vietnam’s IFC journey has entered its operational phase. The next 24 months will test the country’s ability to move from reform ambition to tangible market transformation — and early participants will shape that outcome.