As part of its digital transformation and global financial integration strategy, Vietnam is steadily developing its Regional and International Financial Center. One of the key initiatives supporting this vision is the issuance of a decree on the Regulatory Sandbox for the banking sector, expected to be officially launched in 2026.This is a strategic move to allow Fintech companies to test new products and services in a legally controlled environment-with defined time and scope-while fostering innovation in Vietnam's financial and banking sector.

Over 260 Fintech Companies Operating in Vietnam

According to Fintech Singapore and the Fintech Vietnam Report 2023, over 260 Fintech companies are currently operating in Vietnam, a significant increase from just39 in 2015. Notable segments include e-payments, peer-to-peer (P2P) lending, credit scoring, blockchain, personal finance management, and insurtech.

Three Fintech Areas Selected for Initial Testing

Under the latest draft of the regulatory sandbox decree, the number of eligible Fintech solutions has been narrowed from six to three high-potential areas: (i) Credit scoring - using AI and big data to assess the financial capacity of individuals and businesses; (ii) Open API-based data sharing - a platform that enables the development of open banking ecosystems; (iii) Peer-to-peer (P2P) lending - platforms that connect borrowers and lenders directly without traditional financial intermediaries.

These are as were selected based on their innovation potential, practical applicability, and the urgent need for corresponding legal frameworks.

Eligibility Requirements and Application Documentation

According to the most recent draft of the regulatory sandbox decree, entities eligible to participate include: (i) Licensed credit institutions (CIs) and foreign bank branches operating in Vietnam; (ii) Fintech companies with a legally registered entity in Vietnam. For companies providing P2P lending services, more stringent legal, financial, and management requirements apply due to the higher risk nature of the model.

Required application documents include: (i) A formal application form to join the sandbox;

Corporate legal documentation; (ii) A detailed description of the proposed Fintech solution; (iii) A testing plan outlining timeline, scope, number of users, and target customers; (iv) A risk management and user protection strategy, compliance commitment, and expected outcomes.

Procedures and Limitations on Participation

The State Bank of Vietnam (SBV) will be the sole authority responsible for receiving, evaluating, and issuing participation certificates. According to the draft decree, the number of companies admitted to the sandbox will be limited annually, based on the regulator's supervisory capacity and available resources.

The sandbox will operate in cohorts or rounds, similar to the models in Singapore, the UK, and Thailand. Each round will publish the number of accepted applicants and submission timelines, ensuring transparency and fairness.

Important Considerations for Foreign Investors

Under the latest draft of the regulatory sandbox decree, foreign investors can either establish a legal entity in Vietnam to apply for sandbox participation or partner with a local Fintech company. Key considerations include: (i) A Vietnam-registered legal entity is required to be eligible; (ii) Legal liability is not waived during the testing phase; (iii) Strict obligations on data protection and cybersecurity apply.

In addition, under the Financial Center master plan, Vietnam is expected to offer various incentives for sandbox participants and financial institutions, including: (i) Visa waivers and simplified work procedures for foreign experts; (ii) Flexible dispute resolution mechanisms based on international standards, moving toward common law frameworks used in global financial centers; (iii) Tax incentives, infrastructure support, and one-stop administrative services within the financial zone.

These provisions make Vietnam an attractive destination for global financial institutions, tech investment funds, and Fintech startups looking to enter Southeast Asia.

Close Supervision and Transparent Post-Test Procedures

According to the most recent draft of the regulatory sandbox decree, a key strength of the sandbox is the continuous supervision and evaluation throughout the testing process. Participating organizations must submit periodic and ad hoc reports and are subject to oversight by SBV and other relevant regulators. In some cases, on-site inspections may be conducted, up to twice a year.

At the end of the testing period, solutions may be: (i) Certified as having successfully completed testing, potentially leading to full regulatory approval; or (ii) Granted an extension for further data collection; or (iii) Terminated if deemed too risky or non-compliant.

Participation in the sandbox provides companies with direct market access in a low-risk environment, enabling them to: (i) Test and optimize products based on real user behavior; (ii) Contribute to long-term legal and policy development; (iii) Increase their chances of attracting follow-on investment if the test proves successful.

Solutions that complete the sandbox phase may be prioritized for official licensing, giving early entrants a competitive edge.

Sandbox - A Launchpad for Fintech Innovation and Vietnam's Financial Center

The launch of the Regulatory Sandbox is not merely a legal experiment-it is a strategic foundation for building a transparent, efficient, and secure Fintech ecosystem. Fintech companies will not only be able to validate their business models but also play a vital role in shaping future regulatory frameworks.

With the sandbox set to be rolled out at Vietnam's Financial Center in 2026, the door is now wide open for forward-thinking Fintech investors to enter one of the fastest-growing Fintech markets in Southeast Asia.

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