'Special financial zones' cannot lack superior financial mechanisms

According to the draft Resolution of the National Assembly on the International Financial Market in Vietnam, specific financial policies applied in the International Financial Market include groups of foreign exchange policies. Specifically, regarding foreign exchange policies, members of the International Financial Market must comply with legal regulations on preventing and combating money laundering, terrorist financing, and financial fraud in foreign exchange transactions. Payment, listing, advertising, quotation, pricing, pricing in contracts, agreements, and other permitted transactions between members of the International Financial Market are conducted in Vietnamese Dong or foreign currency.

The use of foreign currency in transactions between members of the International Financial Market and non-members of the International Financial Market, between entities in the International Financial Market and entities abroad and the rest of Vietnam shall comply with current regulations. Members of the International Financial Market established by foreign investors are allowed to freely convert foreign currency in accordance with Government regulations.

Regarding banking and credit institution activities, the draft Resolution clearly states that priority areas in the International Financial Center regarding a number of traditional products in commercial banking activities have simplified processes, procedures for implementation and operation. Credit institutions that meet Basel III capital safety standards when establishing subsidiaries at the International Financial Center to provide foreign exchange services to foreign organizations, individuals, non-residents or members of the International Financial Center are exempted from the conditions for granting licenses to establish credit institutions and from complying with capital safety regulations. Banks or credit institutions headquartered at the International Financial Center are not subject to foreign ownership restrictions or foreign investment conditions for providing services in the International Financial Center or cross-border services.

Regarding financial policies and capital market development, innovative startups raise capital through crowdfunding or private offering mechanisms through capital mobilization platforms of organizations licensed by management and administration agencies. Domestic and foreign organizations are allowed to participate in capital mobilization activities of innovative startups. Securities of innovative startups are traded at the International Financial Center.

In addition, organizations issuing green financial products, investment funds and investors in green financial products are entitled to support mechanisms, including tax incentives. Green financial products are traded at the International Financial Center. Foreign banks establishing branches or transferring their headquarters and representative offices to the International Financial Center are entitled to incentives as for sectors in the Investment Incentive List. Members of the International Financial Center are entitled to apply processes and procedures and implement a number of solutions to develop the insurance and reinsurance markets according to simple processes and procedures; and are entitled to incentives on corporate income tax; personal income tax; and value added tax as prescribed in the draft Resolution.

In particular, the draft Resolution stipulates a controlled testing policy (sandbox) for fintech (financial technology) and innovation. Accordingly, the agency managing and operating the International Financial Market regulates a controlled testing policy and implements it in the form of a limited-term permit for technologies, products, services, and business models that are not yet regulated by law.

Organizations and enterprises conducting controlled testing are allowed not to apply certain provisions of law on standards and technical regulations for technologies, products, services, business conditions, procedures and other provisions that are not suitable for the characteristics and new features of the technologies, products, services or business models proposed for testing. Organizations and individuals participating in controlled testing, as well as management agencies and supervisors of controlled testing, are exempted from administrative, disciplinary and civil liability to the State if they cause damage to the State during the testing process due to objective reasons despite having complied with the testing process.

The agency managing and operating the financial market will issue incentive and support programs to promote a number of key areas such as green finance; digital assets and fintech; commodity and derivatives markets; other areas according to the Prime Minister 's decision...

Ha Uyen

Source: https://baophapluat.vn/dac-khu-tai-chinh-khong-the-thieu-cac-co-che-vuot-troi-ve-tai-chinh-post545041.html