Vietnam's Fintech Regulatory Sandbox (Decree 94/2025/ND-CP): Opportunities and Strict Foreign Capital Bans

The regulatory environment for fintech in Vietnam underwent a monumental shift with the official implementation of Decree No. 94/2025/ND-CP (Decree 94), which took effect on July 1, 2025. This decree establishes a formal regulatory sandbox in the banking sector, allowing eligible entities to test fintech innovations in a controlled environment for up to two years (with a possibility of two extensions, each not exceeding one year).

While the decree officially opens up pilot testing for three major categories—Credit Scoring, Open API Platforms, and Peer-to-Peer (P2P) Lending Platforms—it introduces highly restrictive local-only ownership and nationality-based constraints that present a major barrier to foreign capital and US fintech expansion, particularly in alternative lending.

1. Scope of the Sandbox

Decree 94 defines the three eligible fintech solutions as follows:

• Credit Scoring: Digital technology-based scoring solutions operated by credit institutions or qualified fintech companies to support credit assessments.
• Open API: Standardized API platforms allowing secure data transmission and service requests between credit institutions, fintechs, and third parties.
• P2P Lending: Digital technology-based platforms operated by a P2P lending company to facilitate VND loan document execution and communications between borrowers and lenders.

2. Strict Foreign Capital and Nationality Ban on P2P Lending

For US fintech strategy teams, the most critical element of Decree 94 is the total exclusion of foreign-owned enterprises from operating P2P lending platforms under the sandbox.

• Local Ownership Mandatory: A P2P lending company applying to the sandbox "must not be a foreign-owned enterprise." Although the decree does not explicitly define "foreign-owned enterprise," it is interpreted to align with "foreign-owned economic organizations" under the Vietnamese Investment Law, which includes any company with a foreign shareholder or indirect foreign control.
• Vietnamese Citizenship Requirement: The legal representative and general director of the P2P lending company must be Vietnamese citizens with clean criminal and administrative records, and they cannot concurrently manage other financial, banking, pawn, or multi-level marketing services.
• Potential Treaty Conflicts: This nationality-based exclusion raises significant legal questions regarding Vietnam’s international commitments under the EU-Vietnam Free Trade Agreement (EVFTA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Both treaties require member states to permit foreign financial service suppliers to offer "new financial services" if domestic suppliers are permitted to do so. While Vietnam entered reservations allowing it to limit sandbox participant counts, those reservations do not explicitly authorize outright nationality-based exclusions.

3. Operational and Risk Mitigation Rules for P2P Platforms

For local entities operating under the P2P sandbox, Decree 94 imposes strict operational boundaries:

• No Guarantees: P2P lending companies are strictly prohibited from providing guarantees or security for their customers’ loans, and they may not act as customers (lenders or borrowers) on their own platform.
• Borrowing Limits: Platforms must establish measures to monitor and control the maximum outstanding debt of each borrower. The State Bank of Vietnam (SBV) will determine borrowing limits on a per-platform and all-platform basis.
• Mandatory CIC Integration: P2P companies must report borrower and lender credit data to the National Credit Information Center (CIC) and query the CIC to ensure borrowing limit compliance.
• Data Localization: The IT system and information storage system serving the P2P lending platform must be physically located in Vietnam.
• Bank Account Mandate: All loan disbursements and repayments must flow through the borrower's lawful bank accounts or e-wallets in Vietnam.
• Customer Exclusion: Pawn companies are explicitly barred from being customers of P2P platforms.

Verbatim Quotes

From Decree 94 Opens Sandbox for P2P Lending and Open API - VILAF:

"Special Conditions for P2P Lending Companies:

• They must not be foreign-owned enterprises.
• Their legal representatives and general directors must be Vietnamese citizens and must not simultaneously manage other financial or credit-related entities."

"The exclusion of foreign-owned enterprises from eligibility raises potential questions regarding Vietnam’s international commitments, particularly under the EU-Vietnam Free Trade Agreement (EVFTA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Both agreements require that member countries allow financial service suppliers of other member countries to provide any new financial service..."

"P2P lending company may not (i) conduct other businesses not covered in the Sandbox License, (ii) provide guarantee or security for its customers’ loans, or (iii) act as customers of the platform."