Urban Development Law Gives HCMC Statutory Bond Power in the VIFC
465 of 500 lawmakers passed the Urban Development Law on 24 August 2026, giving HCMC statutory authority to issue municipal and project bonds via the VIFC from 1 October.
Vietnam's National Assembly passed the Urban Development Law on 24 August 2026 with 465 of 500 lawmakers in favour — a 93% majority at the legislature's extraordinary session. The law takes effect 1 October 2026. Article 23, its most commercially significant VIFC provision, gives the HCMC People's Council statutory authority to issue municipal bonds and project bonds within the VIFC, and shifts investment-bank licensing from the IFC Executive Body to the People's Council. The domestic-access restriction that previously confined VIFC members to foreign-facing activity is also removed.
What Article 23 Actually Does#
Before 24 August 2026, HCMC had no enacted law specifically authorising municipal bond issuance through the VIFC's international capital-markets architecture. Article 23 fills that gap directly.
City-level People's Councils — in practice, HCMC's — may now decide to issue trái phiếu đô thị (municipal bonds) and trái phiếu công trình (project bonds) within the VIFC to mobilise capital for city infrastructure projects. The statutory basis exists from 1 October; operational execution requires implementing resolutions that HCMC reportedly has been preparing in advance, though the specific scope of those resolutions is unconfirmed in primary sources available at publication.
This matters because the Prime Minister named bonds as the VIFC's first product category at the June 2026 working session (see Vietnam PM Names Bonds as VIFC's First Products, Sets June 16 Council Deadline). The law now gives the People's Council the statutory authority to execute on that mandate. What it does not yet give is an operational bond market — that depends on implementing resolutions, MoF/SBV procedural frameworks, and the Securities Law revision targeting October 2026 (see Vietnam's Securities Law Revision Targets October 2026).
The Licensing Shift: From Executive Body to People's Council#
The investment-bank licensing change is structural. Under the framework that preceded enactment, the IFC Executive Body (Cơ quan điều hành IFC) held authority over conditions and procedures for licensing investment banks and the issuance of international financial products through the VIFC. Article 23 transfers that function to the People's Council, with MoF and SBV retaining approval rights.
For international banks evaluating VIFC entry, the practical implication is that the counterparty for investment-bank licensing is now an elected city government body rather than the VIFC's administrative executive arm. Whether the IFC Executive Body retains a coordination role in that process is not established in available primary sources — that detail will depend on implementing regulations not yet published.
NA Chairman Tran Thanh Man stated in remarks to the National Assembly on 17 August 2026 that the two-layer legal architecture is intentional: Resolution 222/2025/QH15 governs VIFC organisation, operations, and preferential policies, while the Urban Development Law governs the spatial, infrastructure, and urban conditions attached to the centre. The enacted text codifies this. It means investment-bank licensing sits at the urban-law layer, while the broader operational framework for VIFC members — FX regime, tax treatment, arbitration — remains under Resolution 222 and the Decree 323–330 implementing suite.
Domestic Access: The Closed Door Is Now Open#
The enacted law removes an access restriction that had limited VIFC member activity to foreign-facing transactions. VIFC members may now serve domestic Vietnamese organisations for transactions, capital attraction, and financial and other support services.
For bond arrangers, this matters immediately. A VIFC-issued municipal bond or project bond will need distribution into both international and domestic institutional investor bases. The prior restriction meant that serving a Vietnamese pension fund, insurance company, or domestic bank from within the VIFC carried regulatory ambiguity. That ambiguity is now resolved by statute.
The Resolution 98 Transition Window#
The Urban Development Law creates a six-month transition overlap that institutions currently operating under HCMC's special mechanisms need to plan around.
Resolution 98/2023/QH15 — the resolution that granted HCMC a suite of pilot mechanisms including revenue-sharing, investment authorisation, and urban-development flexibilities — expires 1 April 2027. Two provisions survive longer: Clause 9 of Article 5 and Clause 7 of Article 6 continue until 31 December 2030. Everything else terminates.
From 1 October 2026 to 1 April 2027, both the new Urban Development Law and the existing Resolution 98 apply simultaneously. Institutions relying on Resolution 98 mechanisms that do not have equivalents in the Urban Development Law need to identify those gaps before the April deadline. The six-month window is tight given that implementing resolutions under the new law will also be landing during the same period.
Da Nang's Position Changes Too#
The law specifies that certain provisions of Resolution 136/2024/QH15 — Da Nang's special mechanisms resolution — cease to apply once the Urban Development Law takes effect. Da Nang's special urban regime folds into the new framework rather than running in parallel. The VIFC Insight article on Da Nang's implementing-decree constraints covers the background to that node's regulatory architecture (see Da Nang's Implementing Decrees Are Too Strict).
Where the Law Sits in the Stack#
The Urban Development Law completes a legislative trilogy that practitioners evaluating VIFC entry should map in sequence. Resolution 222/2025/QH15 established the VIFC's operational and preferential-policy framework at National Assembly resolution level. Investment Law No. 143/2025/QH15 provided the procedural bypass in Article 28. The Urban Development Law now adds the spatial, infrastructure, and capital-markets statutory layer. The eight implementing decrees (Decree 323 through 330) sit below all three instruments. The final revisions to the 66-article, five-chapter text were presented before the vote.
One complementary provision in the same law is worth noting for banks with free-trade-zone operations: the SBV Governor is now authorised to set conditions for foreign bank branches to open transaction offices inside free-trade zones — a financial liberalisation measure enacted alongside the VIFC bond provisions.
What Comes Next#
Three things to monitor in the immediate period:
Implementing resolutions from HCMC People's Council. The bond mechanism is statutory from 1 October but not operational without implementing resolutions setting the terms, procedures, and eligible projects. Local reports suggest HCMC has prepared a large tranche of implementing resolutions ahead of enactment, though the precise number is unconfirmed. The content and sequencing of those resolutions will determine when the first VIFC municipal bond can realistically launch.
MoF and SBV approval procedures for investment-bank licensing. The People's Council's new licensing authority is subject to MoF and SBV sign-off, but whether those agencies have already drafted the corresponding approval procedures is not established in available sources. Until those procedures are published, the licensing pathway for investment banks entering the VIFC via the Article 23 channel remains incomplete.
The 1 April 2027 Resolution 98 sunset. HCMC institutions operating under Resolution 98 special mechanisms have roughly six months to map which protections survive, which migrate to the Urban Development Law, and which expire without equivalent coverage. The two surviving provisions extend to end-2030, but the broader Resolution 98 architecture does not.
This article was last updated on 24 August 2026. We will update it as implementing resolutions and MoF/SBV approval procedures are issued.
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