Is forex legal in Vietnam?

This is the most asked question and the most vaguely answered. This article sets out the legal position
clearly, along with the practical consequences for anyone taking part.

1. The current framework

Under Vietnam’s foreign exchange regulations, foreign exchange business within Vietnamese territory is a
conditional business line. Only credit institutions and organisations licensed by the State
Bank may conduct it.

To date, no retail forex derivatives exchange has ever been licensed to operate in
Vietnam.

2. The practical consequences

• Organising, brokering or advertising forex platforms to the public in Vietnam has no legal
  basis and may be subject to enforcement.
• Individuals trading on overseas platforms sit in an area that is not clearly regulated. In
  practice this is widespread and there is no precedent of action against individual traders, but that does not
  mean the activity is legally protected.

3. The most important point: you are not protected

This is the consequence to understand most clearly, and it matters more than whether it is legal:

• If the broker does not pay, Vietnamese authorities have no jurisdiction over a legal
  entity registered abroad.
• No Vietnamese compensation scheme applies to your money.
• Disputes have to be pursued under the law where the broker is registered, usually in a
  distant jurisdiction and expensive to pursue.

Put another way: the protection you have depends entirely on the quality of the regulator that licensed the
entity you contracted with — and not at all on Vietnamese law.

4. About tax

Income arising from any source is in principle subject to
personal income tax declaration. How it applies specifically to
this kind of income has no dedicated guidance, so if the amounts are significant, ask a tax professional
rather than working it out yourself.

5. Five things to do if you take part

• Identify the exact legal entity you are contracting with. Read the opening section of the
  client agreement and find the company name and place of registration. It is usually not the entity advertised
  on the home page.
• Look the licence number up on
  the regulator’s own site, not on the broker’s.
• Keep every record: statements, deposit and
  withdrawal receipts, correspondence with the broker.
• Do not leave all your capital in the account. Withdraw profits periodically.
• Use only your own money — not borrowed, and never raised from other people; the second of
  those can move into criminal territory.

6. The line never to cross

There is a large difference between trading your own account and raising capital from other
people. Taking other people’s money to invest, promising returns, or running a tiered referral network
with rewards are activities that can attract criminal liability in Vietnam.

It is the clearest line in the whole subject, and one that many people cross without realising it.

This article is for information only and is not investment advice. Conditions and fee levels are published by the brokers and can change at any time — check with the broker you actually use. Leveraged forex and CFD trading carries a high level of risk and can cost you your entire deposit.