Race to secure a foothold at VIFC: Vietnamese banks poised for international integration

Vietnam’s International Financial Center (VIFC) is taking shape alongside a new legal framework that is prompting domestic banks to race to establish 100% owned subsidiaries within the VIFC. The initiative is designed to serve as a launchpad for deeper integration into global value chains and to attract multi-billion-dollar capital inflows.

The VIFC is being developed through two hubs: VIFC in Ho Chi Minh City (VIFC-HCMC) and VIFC in Da Nang (VIFC-DN). The legal basis for establishing and operating financial institutions in the area is set out in Resolution 222/2025/QH15 of the National Assembly and, in particular, Decree 329/2025/ND-CP issued on 18 December 2025.

Key requirements for 100% owned VIFC subsidiaries

To limit risk and ensure international-standard transparency, Decree 329/2025/ND-CP sets guardrails for credit institutions seeking to establish subsidiary banks in VIFC. The subsidiary must be structured as a single-member limited liability commercial bank, wholly owned by its domestic parent.

The requirements are built around three pillars: financial capacity, governance, and a technology and security system capable of meeting international expectations.

Financial capacity and capital adequacy

For the parent bank, the realized paid-in charter capital at the end of the year preceding the year of application must be at least twice the statutory charter capital, based on independently audited standalone financial statements.

After establishment, the subsidiary must continuously maintain a paid-in charter capital that is not lower than the statutory capital.

Asset quality is also central. The parent bank’s non-performing loan (NPL) ratio at the end of the preceding year and at the end of the adjacent month before the filing date must not exceed 3% (or must be lower if the Governor of the State Bank of Vietnam sets a lower limit for different periods). The parent bank must also provision for and use risk provisions fully and transparently in the quarter preceding the filing.

Governance and operational safety

Decree 329 requires the parent bank’s ownership and compliance record to demonstrate stability, including full compliance with limitations and safety ratios for 12 months prior to licensing. The board and supervisory bodies must be properly constituted, with no missing CEO position. Internal audit and internal control functions must meet international standards to support cross-border operations.

Technology infrastructure and data security

Technology and data security are described as non-negotiable. Members of the Center must adhere to international data-security standards recognized in Vietnam. The bank must establish a robust information security system, use advanced encryption for financial information, and be able to respond and report any data-leak incidents to the supervisory authority within 48 hours of discovery.

What the rules mean in numbers

Given the requirement that realized charter capital must be double the statutory level, the hurdle is described as manageable for many commercial banks. The current statutory capital for a commercial bank is 3,000 billion dong, implying the parent bank’s realized charter capital would need to exceed 6,000 billion dong.

However, the 3% NPL cap and the requirement to maintain safety ratios consistently over 12 months are presented as more demanding, requiring strong financial health and risk-management capability.

Banks positioning for VIFC entry

As the legal framework began to take shape in late 2025 and early 2026, registrations to join VIFC increased. Early presence is viewed as strategically important for positioning brands and capturing market share in Vietnam’s next phase of international integration.

Nam A Bank’s 2026 annual general meeting approved a plan to establish a 100% domestically owned subsidiary bank at VIFC. HDBank has also sought shareholder approval to establish a subsidiary at VIFC.

VietinBank is studying options including establishing a subsidiary or a suitable legal entity to operate at VIFC. It plans to collaborate with startups in MUFG’s ecosystem (Japan) to develop payments, lending, and insurance services in 2026–2027, and it envisions serving as a payment intermediary for digital-asset activities upon licensing.

Vietcombank’s 2026 annual general meeting materials indicate the bank intends to propose establishing a subsidiary to operate at VIFC. The entity would be intended to expand scale and align with higher international governance, product, and risk-management standards. Vietcombank also plans to increase its charter capital to strengthen financial capacity, particularly in cross-border finance, investment banking, or digital-asset services.

Why a VIFC subsidiary structure matters

The subsidiary model is expected to optimize fund flows and foreign-exchange operations. With cash flows segregated inside and outside VIFC, subsidiaries can transact in foreign currencies with other members more flexibly and with fewer domestic constraints. Lending, foreign-exchange services, and overseas investments would operate under a looser framework, enabling faster capital movement.

VIFC is also described as a gateway to access cheaper capital and global green-finance trends. It is expected to attract billions of USD from major international institutions. A standalone subsidiary bank could more easily execute cross-border funding, issue international bonds, and implement green-finance projects.

In addition, Resolution 222 is cited as enabling member institutions to benefit from attractive corporate income-tax rates and tax breaks for high-skilled staff. The VIFC sandbox is also expected to allow trials of new derivatives, digital-asset applications, and blockchain technologies in asset management without being constrained by rigid domestic regulations.

Challenges for international compliance and competition

While opportunities are significant, the article highlights major compliance pressures for subsidiary banks operating as truly international finance institutions.

AML/CTF and transaction transparency

Decree 329 requires disclosure of the purpose for all transfers into or out of VIFC. Banks are expected to act not only as payment intermediaries but also to bear risk-management responsibility, including screening files and maintaining accurate transaction trails. Any misstep involving illicit funds could lead to penalties, enforcement actions, or license revocation and blacklisting by global regulators.

Cybersecurity and data protection

Deep integration with international payment systems is described as increasing exposure to global cybercrime. The 48-hour incident-reporting requirement is expected to drive continuous investment in cybersecurity upgrades.

Risk isolation between subsidiary and parent

Isolating risk between the VIFC subsidiary and its domestic parent is described as complex. Adverse liquidity or foreign-exchange movements in the subsidiary could transmit to the domestic system, requiring a unified risk-governance model designed and operated to a high standard.

Governance standards and market competition

The governance challenge is described as decisive. To participate in international finance, subsidiary entities must adopt IFRS and Basel standards and pursue Basel III, possibly Basel IV. The governance gap between Vietnamese banks and international institutions is described as wide, and improving governance quality is presented as necessary both for licensing and for long-term competitiveness.

The article also notes that domestic banks will face direct competition in the home market from global institutions such as HSBC, Standard Chartered, and Citi, with potential vulnerabilities if banks do not upgrade capabilities in private-asset management and global supply-chain servicing.