Capacity and regulations among British areas of expertise in IFCs

Capacity and regulations among British areas of expertise in IFCs

Vietnam’s ambition to build an international financial centre is gaining traction. British Counsul General in Ho Chi Minh City Alexandra Smith told VIR’s Nguyen Huong why the United Kingdom is a key partner in shaping a future-ready financial hub.

Through the UK-Vietnam strategic partnership, how do you envision Vietnam’s international financial centre (IFC) being positioned on the global financial map and within the UK’s financial value chain in Asia?

Alexandra Smith

Within the UK-Vietnam long-term strategic partnership, I see the IFC emerging as a new regional financial gateway that complements, rather than competes head-on with, established hubs such as Singapore or Hong Kong. Vietnam has three strategic advantages that align closely with the UK’s priorities.

Firstly, Vietnam is among Asia’s fastest-growing and most dynamic economies, deeply integrated into global supply chains. The country has entered upper-middle-income status, and FTSE Russell has also confirmed an upgrade to secondary emerging market status, effective September 2026.

Secondly, Vietnam’s geographic position enables it to function as a financial logistics base, connecting capital, services, and innovation across ASEAN and linking the region with wider Asian markets.

Thirdly, as Vietnam’s strategic partner and a global financial powerhouse, the UK can help integrate the IFC into its broader financial value chain in Asia by positioning Vietnam as a regional node for fintech, green finance, insurance, and risk management, while supporting its integration into global regulatory and professional standards.

Taken together, the IFC can evolve into a distinctive destination on the global financial map, strengthening both Vietnam’s financial ecosystem and the UK’s presence in Asia.

For Vietnam’s IFC to compete with other hubs, what core pillars in governance, regulation, and human capital should Vietnam prioritise?

As noted, it should be designed to complement, rather than directly compete with, established financial hubs. To achieve this, three core pillars should be prioritised.

First is a modern, transparent, and predictable governance model. This includes a single, empowered regulatory authority; regulatory sandboxes for fintech and digital finance; world-class dispute resolution mechanisms, including international arbitration; and progressive capital account liberalisation aligned with global risk standards.

Second is a legal and regulatory framework aligned with international norms. Key elements include Basel III/IV banking supervision, IOSCO-compliant capital markets regulation, adoption of IFRS, clear frameworks for green finance and carbon markets, and AML/CFT standards.

Third is internationally standardised human capital. Vietnam will need skilled professionals across risk management, insurance, asset management, fintech, AI, and international financial law, supported by globally recognised professional certifications.

How can the UK support Vietnam in developing an IFC to global standards?

As one of the world’s leading financial centres, home to more than 1,600 fintech firms and £102.5 billion ($140 billion) in financial services exports in the four quarters to June 2025, the UK offers deep expertise that Vietnam can draw upon as it builds its hub.

Since 2022, the UK has supported development through legal and regulatory advice, as well as capacity-building programmes. Long-established British institutions in Vietnam, such as Standard Chartered, HSBC, Dragon Capital, Prudential, and KPMG have also contributed valuable insights to the planning process.

During the March 2025 visit to London by Permanent Deputy Prime Minister Nguyen Hoa Binh, TheCityUK released a high-level recommendations report structured around three strategic pillars: green finance, capital markets, and fintech. These recommendations closely align with Vietnam’s national roadmap for financial sector reform.

A decisive factor for success is the rule of law. World-class IFCs require not only modern infrastructure, but also transparent, stable, and internationally consistent legal and regulatory frameworks. Vietnam’s consideration of adopting a common-law framework for its IFC court reflects global best practice.

All leading international dispute resolution centres operate on common law principles, which provide the flexibility needed to accommodate rapid technological change and evolving financial instruments. This approach enhances investor confidence and helps lower the cost of capital.

Today, around 40 per cent of international commercial contracts are governed by English common law, while the UK Commercial Court is globally recognised for its efficiency and impartiality, further reinforcing the rationale for this choice. For this reason, common law should be clearly articulated as the governing legal foundation of the court.

A strong judicial system is the cornerstone of any successful IFC, starting with the establishment of a specialised court and an international arbitration centre. These institutions play two critical roles: they underpin investor confidence by ensuring disputes are resolved swiftly and fairly, using familiar legal principles; and they enhance global credibility.

The UK can support Vietnam through several main channels. The first is institutional and regulatory capacity building, including sharing best practices from London, Edinburgh, and UK-supported IFCs, as well as advising on IFRS, capital markets law, arbitration frameworks and green finance.

Secondly, mobilising UK financial institutions and expertise by encouraging UK banks, asset managers and insurers to establish a presence in Vietnam’s IFC and leveraging networks such as the City of London.

Thirdly, developing internationally standardised human capital through partnerships with various organisations, particularly in governance, digital finance, and other areas.

Fourthly, supporting mutual recognition and Vietnam’s integration into global standards networks and green finance frameworks.

Within the comprehensive strategic partnership, UK-Vietnam cooperation focuses on four priority areas that directly reinforce the IFC agenda: financial services and development; renewable energy and green growth; education and digital transformation; and urban innovation, illustrated by the newly signed MoU between Ho Chi Minh City and the Liverpool City Region during the General Secretary’s recent visit to the UK.

Together, these instruments can help Vietnam bypass intermediary stages and move directly towards global best practice, creating a competitive and future-ready IFC. They align closely with Vietnam’s long-term goals of high growth, high-income status, and net-zero emissions, as well as with the UK’s vision of prosperity, sustainability, and innovation.

VIR