Speaking at the Vietnam Business Forum in mid-2019, representative of the American Chamber of Commerce (AmCham) was relatively concerned when referring to the regulation on foreign ownership limit for fintech companies that the State Bank of Vietnam (SBV) is drafting.
According to AmCham, the growth of financial service sector and fintechs will depend on the implementation of legal framework, regulations and policies which are favourable for investment and allow them to contribute to Vietnam’s financial prosperity and popularisation.
However, despite being optimism about the government’s efforts to facilitate the non-cash economy and the development of digital area, the AmCham is also concerned about some recent regulations on payment and fintech fields, particularly the proposal of a 30 percent foreign ownership ceiling rate in payment intermediary companies in the draft Decree amending Decree No.101/2012/ND-CP.
AmCham said that the plan to apply a limit on the rate of foreign ownership in the fast growing payment and fintech fields will significantly limit Vietnamese fintech start-ups from mobilising capital from foreign investment institutions, thereby limiting their ability to attract talents and making them less competitive than other businesses in the region.
“In general, such limit will hinder the development of the payment sector and we hope that the government will maintain the policies that facilitate fintech services to have the opportunity to contribute to the technological innovation and financial popularisation in Vietnam,” said AmCham’s representative.
Sharing similar point of view, VBF’s Working group also pointed out that the foreign ownership restriction may adversely affect the development of fintech in Vietnam, when many fintech services depend heavily on the use of artificial intelligence and big data analysis and many foreign businesses have been ahead in developing these technologies.
Thus, the group petitioned the government to ensure that there will be no restriction on foreign ownership for fintech companies so as not to hinder the development of this field in Vietnam.
In addition to the regulation on the foreign ownership limit, VBF’s Working group also pointed out that Vietnam’s laws are lacking in guiding regulations, making it more difficult for fintech companies to find the development direction for this field in Vietnam.
Specifically, Vietnam currently has no specific business line for peer-to-peer lending (P2P) and businesses are unclear about the sector they should register to provide P2P lending in Vietnam.
Therefore, many businesses have had to register other business lines when providing P2P lending services and accept the risk of not complying with business licenses such as investment registration certificates and business registration certificates.
From the above fact, the VBF’s Working group proposed the government to issue additional guidelines for new fintech services such as P2P lending services which are already operating in Vietnam.
