HCM City is currently Vietnam’s financial center and a secondary global financial center. However, to become an international financial center, the city needs a legal corridor to expand the operating space for the financial-banking market.
At a recent workshop, experts proposed many solutions for the city to become an international financial center in the 2026-2030 period.
Ms. Le Ngoc Thuy Trang, General Director of Ho Chi Minh City State Financial Investment Company (HFIC), said that in March 2020, Ho Chi Minh City was evaluated as a secondary financial center on the Global Financial Centers Index (GFCI). In September 2021, the city topped the list of 10 potential centers to be considered for inclusion in the official GFCI assessment list.
Mr. Nguyen Xuan Thanh, a lecturer at Fulbright University Vietnam, said that GFCI rates Ho Chi Minh City as a global financial center, but the ranking does not say whether it is a national or international financial center, but only a secondary global financial center. This secondary quality lies in competitiveness.
The city has better conditions than other localities to develop an international financial market based on this criteria, especially in terms of concentration of market and financial institutions as well as development potential.
To assess the city’s competitiveness, the project compares HCM City with 14 other centers in Northeast Asia, Southeast Asia and South Asia.
In terms of geo-economic factors, the financial market in the Association of Southeast Asian Nations (ASEAN) can be classified into three groups: weak, medium, and strong. Singapore is the only country in the strong group.
Mr. Thanh said the competitiveness of Ho Chi Minh City is equal to that of major cities in the region such as Manila (the Philippines) and Jakarta (Indonesia) and is not significantly inferior to Bangkok (Thailand) and Kuala Lumpur (Malaysia).
“We are equal to Manila and Jakarta, but with the fast growth rate, we can surpass and reach the level of Bangkok and Kuala Lumpur in the 2026-2030 period. However, objectively, we cannot catch up with Singapore and Hong Kong,” said Thanh.
Based on that analysis, Ho Chi Minh City aims to be the second strongest financial market in ASEAN, after Singapore.
The financial center is located in District 1 and Thu Thiem
Mr. Nguyen Xuan Thanh said that GFCI is concerned about a weakness of HCM City: it has many emerging services with fast growth, but will they develop in the short term or in the long term. For example, Ho Chi Minh City has more than 200 Fintech companies. The question is whether these businesses will become digital financial institutions, or just start-ups and then “die prematurely”.
The project said Fintech and digital banking are two trends that the city should focus on.
Another limitation is that Vietnam does not have legal space for the operation of multi-industry and multi-service financial groups.
Surveys show that a number of domestic organizations, especially commercial banks, have developed under the financial group model.
However, international financial institutions do not have much presence because they only have licenses for traditional banking, making it difficult to get additional licenses to operate in other fields. Most of the remaining international banks serve foreign-invested enterprises, or large customers in Ho Chi Minh City. International banks that have seen no hope of developing into a financial group have withdrawn, sold, or narrowed their scope in the market.
Ho Chi Minh City should have a legal framework for financial institutions operating under the financial group model. This mechanism is more attractive than land rent exemption or tax reduction, Thanh said.
In addition, experts said the financial center is not a specific building, skyscraper, or complex. It’s an ecosystem. And this ecosystem is developed well in District 1. In addition to the existing financial headquarters in District 1, Ho Chi Minh City will develop a financial – commercial center in Thu Thiem.
Ms Le Ngoc Thuy Trang said the city is oriented to develop into a national financial center with a solid foundation in 2021-2025 and can prepare necessary conditions to become a regional center from 2026 to 2045. The goal is to be ranked in GFCI’s top 50 financial centers in the world by 2030 and in the world’s top 20 by 2045.
To develop until 2025, the city set out four action programs: Fintech development, digital banking and a digital financial transaction market; regional financial integration; Thu Thiem Financial – Commercial Zone; and a commodity market in the Ho Chi Minh City international financial center.
Experts say the desire to build a casino or Disneyland in HCM City will cause an “imbalance”, affecting the city’s image.