During its ongoing first extraordinary session, the 16th National Assembly officially passed the Law on Urban Development on August 24.
With this move, the overarching legislation establishes a modern legal framework designed to eliminate institutional bottlenecks in urban development, empower municipal authorities, and create unprecedented space for high-value economic models in urban areas.
A key highlight for the international business community is the formal legal recognition of Free Trade Zones and integrated logistics hubs as specialized functional zones.
To ensure seamless cross-border commerce while maintaining robust risk management, the Governor of the State Bank of Vietnam is tasked with setting streamlined operational criteria for transaction offices of foreign bank branches within these zones, addressing foreign exchange requirements and international compliance standards.
The law also marks a major milestone in Vietnam’s ambition to establish a regional International Financial Center. By authorizing municipal councils to license investment banking services and innovative financial instruments under central regulatory oversight, the policy framework allows financial center participants to deliver advanced services to domestic entities, effectively bridging local enterprises with global capital markets.
The reform reinforces local autonomy through a decentralized administrative model, enabling key economic hubs like Ho Chi Minh City to execute tailored urban strategies and oversee Direct Power Purchase Agreements for industrial green transition.
Enhanced by flexible regulatory sandboxes and specialized customs mechanisms under parliamentary supervision, the updated law offers global investors a highly transparent, predictable, and competitive business environment across Vietnam’s rapidly evolving urban landscape
Google translate