In brief
On 30 September 2026, the State Bank of Vietnam (SBV) issued Circular No. 52/2026/TT-NHNN (“Circular 52”). Implementing the new Law on Urban Development, Circular 52 allows a foreign bank branch (FBB), for the first time, to open a transaction office outside its branch premises, but only within a free trade zone (FTZ) or a non-tariff zone in a special economic zone (NTZ).
Circular 52 took effect on 1 October 2026. Each FBB may open one office nationwide, serving zone-based customers only, subject to strict branch-level eligibility tests. FBBs should assess eligibility now, as several tests look back 12 months or to the last year-end.
Key takeaways
For FBBs considering a transaction office in an FTZ or NTZ, the key considerations are as follows:
- Eligibility is tested at FBB level: the capital, profitability, asset-quality and rating tests apply to the Vietnam FBB, not the parent bank.
- Capital is measured at the prior year-end and in the month before filing, so an FBB below the threshold should consider completing any top-up before 31 December 2026 if it plans to file in 2027.
- Each FBB may open only one transaction office and may relocate it only within the same zone, so the choice of zone is effectively long-term.
- The office may serve only foreign investors and qualifying enterprises in its own zone, so the business case should rest on identifiable zone demand.
- If a zone is narrowed or terminated, the office must move or close, so leases and customer documents should be aligned now.
In more detail
The Law on Urban Development creates a narrow opening
Until now, an FBB’s domestic presence has been confined to its licensed branch premises. Unlike domestic commercial banks, FBBs could not expand through transaction offices. The new Law on Urban Development, effective from 1 October 2026, creates a limited exception: FBBs may open a transaction office in an FTZ or NTZ on terms prescribed by the SBV Governor. Circular 52 sets out those terms.
The framework also has a clear commercial dimension. The new Law on Urban Development also allows enterprises in these zones to quote, price and settle transactions in foreign currency by bank transfer with counterparties in the zone. Circular 52 enables foreign banks to establish a presence where that foreign-currency activity is expected to be concentrated.
The eligibility bar is high and tested at branch level
An FBB must meet all seven conditions below:
| Condition | Requirement | When tested |
|---|---|---|
| Allocated capital | Real value of at least VND 3,000 billion | 31 December of prior year and month before filing |
| Profitability | Profitable | Audited financial statements for prior year |
| Prudential compliance | Compliance with Articles 134, 135, 136 and 138.1 of the Law on Credit Institutions; correct asset classification and provisioning | Every month in the 12 months before filing |
| Asset quality | Non-performing loan ratio of 3% or less (or as set by the Governor) | 31 December of prior year and last day of month before filing |
| Governance | Compliant internal control system; General Director (Director) in post | At filing |
| Sanctions | No administrative penalties on organisation, governance, management (other than internal-rule breaches) or credit extension | 12 months before filing |
| SBV rating | Rated A or B | Latest rating at filing and at approval |
In our view, the capital test will be the gating item for many existing FBBs in Vietnam. An FBB whose allocated capital was below VND 3,000 billion as at 31 December 2025 cannot qualify in 2026, even after a capital injection. A top-up completed by 31 December 2026 may support a filing in 2027. Newly licensed FBBs without a profitable audited financial year will not qualify, and a rating downgrade below B between filing and approval would prevent approval of the application.
One office, one zone and a ring-fenced client base
Each FBB may open only one transaction office in Vietnam, which must be located in an FTZ or NTZ. Relocation is permitted only within the same zone. The transaction office is a dependent unit with its own seal and is managed by and reports to the FBB. It may conduct the FBB’s licensed activities, except those prohibited for commercial bank transaction offices, and may serve only foreign investors in its zone and enterprises headquartered and operating in that FTZ or NTZ.
Commercially, the transaction office adds distribution, not balance sheet. Capital and prudential limits stay at the FBB level. The business case should rest on zone tenants’ demand for trade finance, foreign-currency settlement, accounts and cash management. FBBs should consider building a zone-eligibility check into onboarding and choosing the zone where their home-market and regional clients are most likely to cluster, as there is little room to correct course.
Approval is quick on paper, but local support is decisive
The FBB submits a single application dossier to the SBV, which consults the provincial People’s Committee and the relevant regional branch of the SBV. The statutory process takes 19 working days from receipt of a complete dossier. The office must commence operations within 12 months from the date of approval, failing which the approval lapses.
The People’s Committee comments on the need for the office, its consistency with the relevant zone plan and demand from enterprises in the zone. FBBs should prepare an evidence-based case, engage with the zone authorities early, and have the proposed premises, IT systems, security arrangements, staffing and any required parent-bank or home-regulator approvals ready before filing.
Zone changes can force relocation or closure
If an FTZ or NTZ is adjusted, narrowed or partly terminated and the office is left outside the zone, the FBB must relocate the transaction office within the zone before the change takes effect or close it. If the zone is wholly terminated, the transaction office must close, and the FBB must give the SBV at least seven working days’ notice. Premises leases should include termination or relocation rights linked to changes in zone status, and customer documents should allow services to be transferred smoothly to the FBB.
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