Special urban law enhances appeal of Ho Chi Minh City

In March, Ho Chi Minh City was given the go-ahead to develop a special urban law, expected to remove institutional obstructions and unlock resources.

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Huynh The Du, lecturer at the Fulbright School of Public Policy and Management, spoke with VIR’s Bich Ngoc on the latest developments.What breakthroughs could a special urban law bring to enhance Ho Chi Minh City’s competitiveness and investment appeal, beyond the current frameworks?

Such a law for Ho Chi Minh City would create a shift from a pilot mechanism to a stable, long-term institutional framework, thereby significantly enhancing the city’s competitiveness and investment attractiveness. While some autonomy has already been expanded to localities and businesses, these mechanisms remain temporary, limited in scope, and heavily dependent on central government approval. This results in an unpredictable investment environment, a factor of particular concern to international investors.

A separate law would help Ho Chi Minh City establish institutional stability. When regulations on investment, land, and urban finance are codified into law, investors can plan long-term strategies and reduce risks from policies. This is an advantage that regional financial centres like Singapore and Hong Kong have been effectively utilising.

Secondly, a specific law could empower Ho Chi Minh City to design its own unique competition policies, such as targeted tax incentives, fintech sandbox mechanisms, or more flexible regulations on public-private partnerships and transport-oriented development. Current mechanisms only allow for limited experimentation, while a special law could help shape a complete and consistent policy ecosystem.

Thirdly, the law will enhance financial autonomy. Currently, Ho Chi Minh City contributes a large portion of the budget, but the rate of revenue retention to the city is limited. If the law allows the city to retain a higher percentage of the budget, or to issue municipal bonds flexibly, the city can invest in infrastructure, thereby improving the business environment.