However, achieving this goal will require more than just a strong legal framework—it demands a fully synchronized financial ecosystem, improved financial governance, and high-quality market “products” that can attract global capital. At the heart of this transformation lies the critical role of international banks.
Why International Banks Matter
In the development of financial hubs in Ho Chi Minh City and Da Nang, the presence of international banks is essential. These institutions bring credibility, global connections, and operational expertise that can significantly elevate Vietnam’s profile in global financial rankings.
Thanks to their expansive global networks, international banks can directly impact the perception and competitiveness of Vietnam’s financial market. Leading global banks such as JPMorgan Chase, Bank of America, and Deutsche Bank offer not only financial services but also technical know-how in designing and operating sophisticated financial infrastructure—such as modern clearing and settlement systems. These components are fundamental to any international financial center seeking to attract institutional investors and multinational corporations.
Most international banks operate under a Bank Holding Company (BHC) model, which allows them to offer a suite of services including investment banking, asset management, insurance, and innovative financial products like green finance, digital asset trading, and tokenization. Their participation in the Vietnamese market could help catalyze the development of a smart, inclusive, and sustainable financial ecosystem.
Current Limitations and the Case for Greater Access
Despite their potential, foreign banks in Vietnam still face major limitations. Their operations remain relatively small in scale, with limited branch networks and restricted access to the domestic retail market. Currently, their services are largely concentrated on large corporations, while small and medium-sized enterprises (SMEs) and individual customers remain underserved.
Another critical constraint is regulatory. Vietnam currently limits foreign ownership in local banks to a maximum of 30%, with individual foreign strategic investors capped at 20%. While the State Bank of Vietnam plans to raise this limit to 49% starting May 19, 2025, the policy will apply only to a select group of domestic banks that meet specific eligibility criteria.
Time to Rethink Ownership Limits
Drawing insights from the banking systems of other ASEAN countries (as summarized in data from the ASEAN Bankers Association, ADB, and regional central banks), the VIS Financial Advisory Group proposes expanding foreign ownership limits further. In the short term, a 49% cap could be applied more broadly, while a longer-term roadmap could consider increasing this limit to 60% or even higher.
Relaxing ownership restrictions would not only encourage a surge of foreign interest in the short term but also stimulate long-term growth. It would push the banking sector closer to international standards, improve governance, and increase Vietnam’s appeal as a financial destination.
A Strategic Tool for Attracting Investment
In the near term, allowing international banks to hold equity in domestic banks could serve as a “red carpet” strategy to attract global investors to Vietnam’s emerging financial centers. Over the longer horizon, strategic partnerships with foreign investors would enable Vietnamese banks to scale up operations, improve service quality, and reduce funding costs.
Foreign banks can raise capital from their parent institutions at competitive interest rates, allowing for more efficient investments in Vietnam and across the region. Meanwhile, local banks would gain access to diversified capital sources, global expertise, and state-of-the-art financial technologies—including digital banking platforms, fintech applications, blockchain, AI, big data, and cybersecurity solutions.
Raising the Bar for Risk Management and Talent Development
Perhaps most importantly, deeper integration with international banks would significantly enhance Vietnam’s risk management capabilities. Adopting global standards like Basel III could ensure greater transparency, operational stability, and investor confidence.
Moreover, such partnerships would facilitate the transfer of advanced technologies and international best practices. They would also support the training and development of high-quality human resources in finance and banking—an essential pillar for any financial center aiming to compete on the global stage.
These benefits go beyond technical or financial improvements. A more internationalized banking sector would help modernize Vietnam’s financial infrastructure and tighten its integration with global financial value chains. This would ultimately result in a banking system that operates seamlessly according to international norms, boosting Vietnam’s overall financial sophistication.
Catalyzing Broader Economic Growth
The ripple effects of international bank participation in Vietnam’s financial system could be profound. It would solidify the country’s status as an emerging financial hub in the region and enhance its competitiveness among ASEAN peers.
By building trust, enhancing transparency, and improving service quality, international banks could become powerful accelerators of sustainable economic growth. Their involvement would not only attract more foreign capital but also help local enterprises access global financial markets.
In the broader picture, positioning Ho Chi Minh City and Da Nang as global financial centers is not just a branding effort—it’s a strategic move to transform Vietnam into a high-value destination for investment, innovation, and international commerce.
Conclusion
To become a true international financial hub, Vietnam must embrace global participation. International banks bring with them the credibility, capital, technology, and talent needed to compete on the world stage. By allowing deeper integration and ownership, Vietnam can unleash a new era of financial innovation and regional leadership.
The road ahead will require careful planning, clear policies, and sustained commitment—but with the right approach, Vietnam’s ambition of becoming a financial powerhouse in Southeast Asia is well within reach.
