Special urban law: from the legal framework to a launchpad for Ho Chi Minh City

The Politburo has approved enabling Ho Chi Minh City to draft a Special Urban Law. The draft is expected to be finalized in April to host seminars and solicit feedback in May–June, before being submitted to the National Assembly for consideration at the end of 2026.

The approval builds on the city’s earlier pilot framework, including special resolutions (Resolutions 54-98-260) and Resolution 31 on Ho Chi Minh City’s development. The pilot has been converted into a formal legal corridor intended to provide a structured, long-term and stable basis for implementation.

From pilot resolutions to a unified legal framework

The draft law is presented as a breakthrough compared with earlier opening points of the resolutions, particularly in planning, budgeting and finance, and investment mechanisms.

Urban planning and approval process

Previously, provincial and urban master plans had to be prepared and then approved by the Prime Minister, with amendment processes requiring central consent. Under the new law, the city would require only a single integrated master plan. The Chair of the City People’s Committee would approve it after the People’s Council passes the plan.

Revenue retention and land-related income

On budgets and finance, earlier arrangements allowed the city to retain about 18% of locally generated revenue (with the figure rising to 21% per NQ98). Land revenue largely flowed to the central government, and borrowing was capped by the national debt ceiling.

The new law would allow Ho Chi Minh City to retain all land-use fees, land rent, TOD revenues, and underground space revenues. It would also establish an Infrastructure Investment Fund, a Science-and-Technology Venture Fund, and a Regional Development Fund.

Borrowing and urban bond issuance

The draft law would enable the issuance of urban bonds. It also allows borrowing directly, without requiring the borrowing to pass through the central authority as a channel.

TOD, urban rail and metro financing

In policy areas including transit-oriented development (TOD) and urban rail, the resolutions previously allowed land recovery in TOD zones, but zoning, valuation, and revenue mechanisms were not yet clearly defined. Metro financing also remained dependent on the central budget.

Under the new law, the City’s People’s Council would be able to set the TOD scope and target indicators, including NOXH (at least 15%) and public space (at least 20%). Land Value Capture revenue—described as increasing land value plus TOD infrastructure fees—would be reinvested in the metro. A dedicated chapter (Chapter VIII) addresses the metro.

International Financial Center (VIFC) codified with incentives

The International Financial Center (VIFC) had not had clear provisions in the earlier resolutions. If mentioned, it was only included broadly, which left VIFC-HCMC without an adequate legal basis to operate.

In the new draft, VIFC-HCMC is codified with a separate mechanism (Chapter IX) and regional tax incentives: corporate income tax at 5% for 15 years, and personal income tax exemption for 5 years, followed by a 50% reduction thereafter for international experts.

Decentralization, governance performance and regional role

The draft law is described as being drafted on the principle of maximum decentralization, empowering the city to decide and bear responsibility. It also positions Ho Chi Minh City as the nucleus of the Southeast region, coordinating and disseminating regional development along a Ho Chi Minh City – Dong Nai – Tay Ninh axis.

The reform is characterized as a comprehensive super-metropolitan model, covering governance across administration, finance, space, and technology rather than only sectoral management. It also emphasizes leadership evaluation and resource allocation based on an Urban Governance Performance Index, aiming to increase quantitative accountability and reduce reliance on vague qualitative reporting.

Expected development direction

Overall, the law is intended to move beyond administrative expansion by laying groundwork for central and local authorities to reorganize institutions, outputs, and human resources. The goal is to support a practical and durable path for investment, livelihoods, and development, while formalizing Ho Chi Minh City as a growth engine for the southern region and a template for a southern economic corridor.