Could someone please explain the origins and underlying causes of the North–South divide in Vietnam?

To curb high inflation, Hanoi implemented strict monetary tightening policies, curbing credit expansion—resulting in severe liquidity shortages in the Vietnamese dong and widespread corporate cash-flow crises. That year alone, approximately 50,000 enterprises collapsed. High bank lending rates and difficult access to loans further exacerbated the situation, hitting the securities and real estate sectors hardest—over 90% of firms in these industries reported losses. Naturally, for a real estate tycoon like Zhang Meilan, crisis also meant opportunity—and she spotted a major loophole emerging from Vietnam’s reform process: As noted earlier, during the 11th National Congress, while reviewing the ‘Program for Building the State During the Transitional Period Toward Socialism,’ leaders including Nguyen Phu Trong advocated retaining the original phrasing—‘modern productive forces and principal means of production based on public ownership’—whereas others proposed revising it to ‘modern productive forces and correspondingly advanced production relations.’ The latter prevailed. So what exactly are ‘correspondingly advanced production relations’? In essence, they mean that as long as economic development is promoted and renovation and integration advanced, public ownership can be abandoned. Well, well—so *that* was the opening! At that very moment, three commercial banks in Ho Chi Minh City were teetering on the brink. Under the joint recommendation of the Ho Chi Minh City Party Committee and Municipal Government—and with coordination by the State Bank of Vietnam—in 2011, Zhang Meilan orchestrated the merger of the distressed Saigon Commercial Bank with two other troubled banks. Of course, as a one-party state, Vietnam does have mechanisms to correct deviations. Though rife with internal factions, the Communist Party of Vietnam is not naïve—it will not allow certain parasites to repeat the mistakes of figures like Gorbachev or Yeltsin. Hence, numerous legislative 'patches' have been enacted. For instance, under Decree No. 59/ND-CP issued by the Vietnamese government in 2009, joint-stock commercial banks must have at least 100 shareholders (with no upper limit). Such banks may issue preferential shares (held by 'preferential shareholders'), but these may not exceed 20% of the bank’s registered capital. An individual shareholder may hold no more than 10% of registered capital; an institutional shareholder, no more than 20%; and affiliated shareholders linked to any institutional shareholder collectively may hold no more than 20%. Another example: the Draft Law on Foreign Capital Acquisition of Vietnamese Credit Institutions, passed in 2011, lowered entry thresholds and relaxed conditions for foreign capital entering Vietnam’s banking and credit sector—to spur domestic industry development. Yet foreign investors—including banks, financial institutions, and loan companies—must acquire shares starting from a minimum of 10%, maintain internationally recognized credible credit ratings, and possess total assets of no less than USD 10 billion. If an investor acquires shares to become a strategic investor, it must have at least five years of industry experience—and its registered capital must amount to no less than USD 20 billion, calculated from the fiscal year preceding the acquisition. Within banks and credit institutions: individual shareholding is capped at 5%; foreign financial institutions may hold up to 15%; foreign strategic investors, up to 20%; any single foreign investor plus its related individuals may hold no more than 20%; and the aggregate shareholding of multiple foreign investors plus their related individuals may not exceed 30%.

[Practical Guide] Vietnam’s Foreign Investment Policies

Thanks to improvements in the business environment, foreign direct investment (FDI) continues flowing into Vietnam. Tax reforms and the introduction of an electronic customs clearance system facilitating cross-border trade lifted Vietnam’s ranking in the World Bank’s 2017 Doing Business Report by nine places—to 82nd out of 190 economies. According to the World Bank’s 2016 Stock Report, low labor costs, open trade policies, and advantageous geographic location make FDI a key driver behind Vietnam’s robust trade and economic performance. Data from FDI Intelligence—a division of the UK’s Financial Times—shows that in 2016, Vietnam attracted over six times more new investment capital than originally anticipated. On this metric, Vietnam significantly outperformed regional peers such as Malaysia and Thailand. The Vietnamese government continues prioritizing FDI attraction—especially in sectors promoting technology transfer, upgrading workforce skills, and enhancing labor productivity. It seeks high-tech, high-value-added FDI projects and supports sectors with strong environmental safeguards. Legal reforms related to the business environment have also boosted FDI inflows. For example, Decree No. 78, promulgated in November 2015, introduced online business registration—substantially reducing required documentation and cutting the issuance time for Enterprise Registration Certificates (ERCs) from five days to three. Moreover, the 2014 Investment Law and subsequent legislation enacted in July 2015 permit investors to enter all sectors except six deemed critical to national security—and an additional 267 temporarily restricted sectors. According to the Provincial Competitiveness Index (PCI) study, 90% of enterprises obtain all legally required operational documents within three months, with over 40% securing them within one month. Most provinces and municipalities host investment promotion agencies responsible for providing information, clarifying regulations, and offering support to investors when needed. The Ministry of Planning and Investment (MPI) oversees these agencies. The biannual Vietnam Business Forum also serves as a platform for direct dialogue between foreign businesses and government officials. Video explanation: Preferential Policies of the DEP C Industrial Zone in Hai Phong, Vietnam 2. Market Access and Equity Ownership Limits for Foreign Investors Except for six prohibited sectors—including narcotics, wildlife trafficking, and prostitution—and 243 conditionally opened sectors, both foreign and domestic private enterprises may operate freely across all other fields. For sectors not explicitly opened through trade or investment agreements, foreign investors must negotiate market access case-by-case with the government. Vietnam sometimes issues investment licenses on a pilot basis—or grants special permits tailored to specific target investors. Unless otherwise stipulated in Vietnam’s international or bilateral commitments, foreign investors may hold 100% equity in locally registered companies. However, a foreign enterprise’s maximum shareholding in a Vietnamese bank is capped at 25%, and the aggregate foreign investment in any bank may not exceed 30%. The Prime Minister retains discretion to waive these caps on a case-by-case basis. Foreign ownership in state-owned enterprises (SOEs) is similarly restricted. Meanwhile, most foreign ownership restrictions Vietnam committed to under the World Trade Organization (WTO) for service sectors have already been removed.

Vietnam sets 65% state ownership floor for major banks, to retain control of strategic groups

15 hours ago

Vietnam mandates a 65% state ownership floor for major banks and strategic groups like PetroVietnam and Rubber Group by 2030 to retain control in key sectors.

reuters

2026-10-28

Vietnam to Retain State Stakes in Strategic Sectors Through 2030

2026-10-28

Vietnam sets 65% state ownership floor for major banks, to retain control of strategic groups

Vietnam sets 65% state ownership floor for major banks, to retain control of strategic groups

FAQ