In brief

The State Bank of Vietnam ("SBV") released a draft decree on the regulatory sandbox for fintech activities in Vietnam ("Draft Decree") on 1 June 2020. This Draft Decree proposes framework for the sandbox program for fintech services (“Sandbox Program”) by detailing, among others, the eligibility criteria and procedural requirements for participation.


  1. Key takeaways
  2. Scope of application
  3. Licensing requirements to participate in the Sandbox Program
  4. Duration of the Sandbox Program and extension

Key takeaways

  • Innovation

This Sandbox Program will allow small-scale, startup companies to promote innovation under the regulator’s supervision. Companies that are allowed to join the Sandbox Program can operate with special exemptions and might have special rights.

  • Foreign investments

This Sandbox Program will attract more foreign investors who are looking for M&A in fintech companies. However, it is uncertain how this Sandbox Program will be managed in practice, especially in the business lines where there may be limitations applicable to foreign investors under Vietnam's WTO commitments.

Scope of application

The Draft Decree seeks to regulate fintech models and solutions provided by non-bank organizations and fintech solutions that support banking activities. Specifically, to participate in the Sandbox Program, an entity must be a(n) (i) credit institution; (ii) fintech company / fintech solution provider partnering with the banks; or (iii) independent fintech company / fintech solution provider (“Eligible Entity(ies)”).

Fintech services covered by the  Sandbox Program include the following:

  • payment
  • credits
  • P2P lending
  • To support services for client identification
  • open API
  • solutions employing new and creative technologies such as blockchain
  • other banking support services such as credit scoring, savings, and capital mobilization

Fintech services or solutions not falling in the abovementioned list are subject to Prime Minister approval on a case-by-case basis, and eligibility will be determined based on the potential and benefits such services can provide to Vietnamese society and the economy.

Licensing requirements to participate in the Sandbox Program

Under the Draft Decree, Eligible Entities must obtain a certificate of registration of participation in the Sandbox Program issued by the Prime Minister (“Registration Certificate”). Issuance of Registration Certificate is subject to the initial assessment of the SBV. 

To be granted the Registration Certificate, Eligible Entities must satisfy the following conditions:

  1. Eligible Entities are legal entities established and operating in Vietnam. In other words, it suggests that offshore entities are precluded from participating in the Sandbox Program.
  2. Fintech solutions offered by Eligible Entities must fulfill all of the following conditions:
    • The solution is wholly or partially unregulated by Vietnamese laws.
    • The solution must be a creative solution applied for the first time in Vietnam or applied for new services employing great creativity that benefits users in Vietnam, especially solutions supporting and fostering financial inclusion.
    • The solution must be equipped with a good risk management system, without or with little possibility of having adverse impact on financial institutions and the financial sector of Vietnam, and capable of tackling and reducing risks during the Sandbox Program.
    • The solution's functions and usefulness have been deemed appropriate and accurate to achieve its intended purpose.
    • The solution must be highly commercial with a detailed plan on distribution upon completion of its test run in the Sandbox Program.
    • The solution does not pose any risks possibly resulting in financial and economic disorders.

When making its assessment, the SBV and each Eligible Entity will engage in discussions as to the scope of operation of such solution/service in terms of (i) applied geographic areas; (ii) transaction limitation; and (iii) number of customers using the service.

Duration of the Sandbox Program and extension

The duration of the Sandbox Program is from one to two years from the date of issuance of approval from the Prime Minister. The duration will vary depending on the solution and relevant area and is subject to the Prime Minister's discretion. Extensions of periods of less than one year are possible subject to Prime Minister approval.

Upon completion of the Sandbox Program, the SBV will deliberate whether it will make a request to the Prime Minister for the issuance of a certificate of completion of the Sandbox Program ("Completion Certificate"). This Completion Certificate will serve as the grounds for the Eligible Entity to legally provide the relevant fintech services to the Vietnamese market.