Skip to content
Managing Your Money Made Easy — Capital Vue's Business Hub — Grow Your Wealth with Capital Vue

Market reform aims at attracting increased investments

Efforts intensify in Vietnam to uncover financial resources, with the use of tax reforms, infrastructure enhancements, and educational programs for investors playing significant roles.

,   and  Administrator
3 min read
Redesign of Stock Market Addresses Fresh Financial Injections
Redesign of Stock Market Addresses Fresh Financial Injections

Market reform aims at attracting increased investments

Vietnam Pursues Comprehensive Strategy to Attract Capital to Stock Market

Vietnam is embarking on a multi-faceted strategy to attract both domestic and foreign capital to its stock market, with a focus on structural reforms, regulatory upgrades, infrastructure modernization, and macroeconomic stability. The goal is to graduate from a frontier to an emerging market by 2025.

Key components of Vietnam's current and proposed strategies include:

  • Structural and Regulatory Reforms: The government has introduced significant reforms such as the rollout of the KRX trading platform enabling same-day settlements (T+0), enhanced margin trading rules, improved information disclosure, and plans to implement a central counterparty clearing (CCP) mechanism by 2027. These reforms align Vietnam's market practices with international standards, boosting investor confidence.
  • Tax Incentives and Fiscal Policies: The government has implemented growth-supporting policies including easing credit conditions, reducing value-added tax (VAT), and increasing public investment. These measures indirectly support market liquidity and investor appetite.
  • Emerging Market Reclassification: The anticipated upgrade from frontier to emerging market status by major index providers is a strategic catalyst for attracting foreign capital. Such reclassification typically leads to inflows as emerging-market funds increase allocations.
  • Upgrading Vietnam's Sovereign Credit Rating: Vietnam’s strengthening macroeconomic fundamentals support creditworthiness improvements that further encourage investor participation.
  • Improvements in Corporate Governance: Enhanced corporate governance is a priority within the government's reform agenda. Strengthening disclosure practices, aligning regulations with international standards, and improving financial sector supervision are key to reducing systemic risks and increasing transparency.
  • Market Growth and Participation: The VN-Index has tripled since 2015, recently hitting historic highs, and foreign investor net purchases have sharply reversed in 2025. Domestic retail investor participation is also robust.

The strategy is a comprehensive combination of modernizing market infrastructure, regulatory and fiscal reforms, leveraging the upcoming emerging market classification, improving governance standards, and supporting macroeconomic stability to create a resilient, attractive investment environment.

To attract such capital, Vietnamese companies must meet international standards in areas such as English-language disclosures and environmental, social, and governance practices. The quality of listed companies needs to be improved for transparency.

Solutions are being considered to increase the proportion of institutional investors and improve individual investor knowledge. The management agency and market operators are working to upgrade the stock market from frontier to emerging.

This year marks 25 years of the Ho Chi Minh City Stock Exchange (HSX). The HSX has successfully deployed the new KRX trading platform for the entire market and is working on streamlining initial public offering (IPO) and listing procedures.

Inflows from passive funds like ETFs could amount to around $1-2 billion, while capital inflows from other types of investment funds could reach $5-10 billion. The ambition is to attract world-class investors to Vietnam's stock market as part of a strategy for private economic development.

Relevant agencies are reviewing the Law on Securities and guiding decrees to identify legal bottlenecks for improvement. A draft scheme on the development of institutional investors is being prepared and proposed by the State Securities Commission (SSC).

When the sovereign rating is upgraded to investment grade, it has two major implications: a decrease in the cost of foreign borrowing for Vietnamese enterprises and a reduction in policy risk and greater macroeconomic stability. Long-term capital inflows can be encouraged through preferential tax regimes in international markets with robust investment flows.

Trinh Quynh Giao, CEO of PVI Asset Management, added that upgrading Vietnam's sovereign credit rating is another critical element that deserves greater attention to attract foreign investment. Vietnam aims to be upgraded to emerging market status by FTSE Russell this September and MSCI standards within the next 18-24 months.

Nguyen Phan Dung, deputy CEO of SSI Asset Management, stated that there remains significant headroom for both domestic and foreign capital flows into Vietnam's financial markets.

In light of Vietnam's comprehensive strategy to upgrade its stock market, businesses encountering opportunities include finance and investing sectors, as the country aims to attract foreign capital through regulatory upgrades, structural reforms, and improvements in corporate governance. The goal is to transition from a frontier market to an emerging one by 2025, potentially attracting billions in capital from various investment funds, international ETFs, and world-class investors.

With significant headroom for both domestic and foreign capital flows, investing in Vietnam's financial markets offers potential growth opportunities as the country pursues further reforms in its financial system, such as tax incentives, improvements in disclosure practices, and streamlining initial public offering procedures.

Read also:

    Related

    Latest