For the International Financial Center to operate effectively: The focus and foundation are still the issues of mechanism and law.

Need a "special" legal mechanism for the Center to operate

Sir, one of the most concerned issues at present is the construction of an international financial center in Vietnam. In your opinion, is this really necessary and appropriate at this time?

- We plan to build an international financial center in some provinces and cities such as Ho Chi Minh City and Da Nang. In my opinion, this is a completely correct direction, because Ho Chi Minh City is the largest commercial center in the country and is also the place that investors always aim for first when coming to Vietnam.

The construction of an international financial center in Vietnam is also in line with the country's development needs, but to build this center, we must pay attention to two major issues: The first issue is capital: A large enough financial center must be equipped with modern facilities and located in a prime location and a large amount of capital must be invested in it. So where should that capital be mobilized from, from public or private capital, domestic or foreign capital must also be taken into account. The second issue that needs attention is how the international financial center is organized to make it attractive. Specifically, it must be built in beautiful locations, in the city center, convenient for trading. It must be a high-rise building that can accommodate all financial institutions, from banks, insurance, real estate, to import-export companies, all related businesses and investors...

In particular, human and technological issues must also be taken into account when building an international financial center. Regarding human resources, there must be a team of experts, specialists, and capable business people to participate in operating the center. Regarding technology, it must be connected with the most modern technologies, such as AI.

According to the Draft Resolution of the National Assembly on the construction of an international financial center in Vietnam, a specific financial mechanism will be applied in the Center, including policies on foreign exchange; incentives for banking activities, credit institutions, related to green finance... It can be said that this is an open, transparent mechanism, supporting members to participate in activities at the Center. What is your comment on these policies?

- A large international financial center of such scale needs to have preferential mechanisms to attract financial enterprises, such as tax incentives. Because in the first years they have to invest a lot. Only when they reach the "break-even" point will they start to make a profit. Before they reach that "break-even" point, it is necessary to apply preferential tax policies to make them feel attractive when participating in this international financial center. Then there may also be services related to international transactions with a modern information and communication system, with perfect measures of security and network security.

The construction of an international financial center is a “breakthrough” in Vietnam and also a world trend. However, for the center to be established, operated and developed in the right orbit is not a simple task. In your opinion, in what direction should the international financial center be implemented and how should it be managed?

- We have also started planning for the construction of the International Financial Center and the Government, especially the Ho Chi Minh City People's Committee, has also built a framework for the construction of the Center. I also know that the International Financial Center in London (UK) is also actively supporting this activity in Vietnam. This is a very encouraging sign, however, currently, the world economy as well as Vietnam is going through an extremely difficult period. If the US President's tariff policy cannot change strongly, it will have a huge impact on the Vietnamese economy. And when we are having to deal with all the problems, such as tariffs, import and export, economic stagnation, and facing the risk of investors wanting to withdraw from Vietnam, this year is not a good time to build the International Financial Center. But if we have a good plan, a good project with appropriate backup plans, then any time is the right time to start this project, even though there are many difficulties.

After its establishment, of course there must be a mechanism to manage the International Financial Center. First of all, we must have a legal mechanism, a special regulation for that Center. Specifically: How are transactions at the International Financial Center allowed to be performed and managed under the legal regulations of Vietnam and will the legal regulations of Vietnam be compatible or contrary to international practice? Furthermore, many new issues will arise. Specifically, the Government is researching the development of digital currency (Cryptocurrency) and digital currency will be more strictly regulated and developed and expanded in the future. Then a court with the ability and authority to handle disputes related to international trade when international transactions increase many times through the development of the Financial Center.

The key issue here is still a strict legal foundation regulating the activities of the Financial Center. On that foundation, we begin to build facilities, human resources, technology, and implement marketing programs around the world, so that they know that Vietnam has an international financial center like Singapore; Hong Kong... (China) to attract and attract the attention of financial investors around the world.

Promote the spirit of rule of law

As an expert in global finance, what good, practical experiences do you have from well-developed countries in this field to recommend to Vietnam?

- One issue that I am very concerned about in the construction of the International Financial Center is whether investors have confidence in this Financial Center? Even our stock market is still at its lowest level, still a frontier market. From here we seek to enter the emerging market and eventually the developed market. Therefore, in addition to the activities of the International Financial Center, we must bring our stock market from the frontier to the emerging market, to create prestige. From there, attract more investors to participate in the Vietnamese stock market, to be able to support the International Financial Center.

Along with upgrading the stock market, Vietnam's legal system must change rapidly. Vietnam has many laws and regulations, but they are still cumbersome and overlapping. I live in the US and find that American laws are very simple and the American people's spirit of respect for the law is very high. They do not need many laws, but they respect the law very much. Meanwhile, Vietnam's legal regulations are numerous but contradictory and negate each other. In particular, people's compliance with the law is very low. Even when a set of laws has not yet been issued, businesses have found ways to "circumvent the law" in advance, while in foreign countries, on the contrary, they seek measures to comply. Therefore, businesses need to change their thinking and further enhance the spirit of respect for the law.

With that spirit, it will create a fair playing field for domestic and foreign enterprises. Because when foreign enterprises enter Vietnam, they always try to understand and comply with our country's legal system. In the case that domestic enterprises keep the old spirit, old thinking, deliberately "circumvent the law", it will create an unfair playing field for other enterprises, especially foreign investors.

One of the concerns of experts in building an international financial center in Vietnam is that when the center comes into operation, it will not attract customers, while we invest too much money in it. In your opinion, what other factors are needed to make the international financial center truly attractive?

- To build such a large financial and commercial center, a huge amount of money must be invested. That is why we must consider the effectiveness of this activity. We can estimate that the Financial Center can reach the break-even point after 3-5 years of operation and the investment capital recovery point can be achieved after about 10 years. This is a financial burden for the national budget and this project has potential risks. For managers, builders and designers of the Center, different options and scenarios must be proposed, with different assumptions. Those scenarios and assumptions require participation and contributions from all experts and economists, as well as broad participation from the National Assembly, the Government, agencies, ministries, especially the Ministry of Finance, the State Bank and the people.

Thank you very much for the interview!

Hai Long (synthesis)

Source: https://baophapluat.vn/de-trung-tam-tai-chinh-quoc-te-hoat-dong-hieu-qua-trong-tam-nen-tang-van-la-van-de-co-che-phap-ly-post549509.html