The Vietnamese Government is mulling allowing European financial firms to purchase up to 49 percent of two local commercial banks, an official from the Vietnamese Chamber of Commerce announced on Wednesday.

The offer will be valid for five years after the Europe-Vietnam Free Trade Agreement (EVFTA) comes into effect early next year, Nguyen Thi Thu Trang, director of the WTO Integration Centre at the Vietnam Chamber of Commerce and Industry (VCCI), was quoted as saying by the Vietnam News Agency.

The EVFTA was signed between Vietnam and the European Union on June 30, 2019, opening opportunities for firms of both sides to tap into the entirety of the combined 600 million person market.

Trang said that the offer does not apply to four joint-stock commercial banks - BIDV, Vietinbank, Vietcombank, and Agribank - in which the state still holds controlling stakes.

Under existing regulations, the maximum rate of foreign ownership in a commercial bank is set at 30 percent.

The offer will follow a “first come, first served” principle, meaning only the first two banks that sign up will be allowed to exceed the 30 percent to 49 percent, Trang said.

After the five-year deadline, the offer will expire and all new proposals will be rejected, she added.

“Vietnam commits to opening opportunities for foreign firms to raise the [financial] sector’s competitiveness and development, thus boosting the country’s socio-economic development,” Trang was quoted by the Vietnam News Agency as saying.

The EVFTA will eliminate 99 percent of tariffs between the two markets, although some will be cut over a ten-year period and other goods, notably agricultural products, will be limited by quotas.

The EU is Vietnam’s second-largest export market after the United States, with main its exports including garments and footwear.

In 2018, Vietnam exported US$42.5 billion worth of goods and services to the EU, while the value of imports from the region reached $13.8 billion, official data shows.

The Vietnamese government said in June that the EVFTA would boost the EU’s exports to Vietnam by 15.28 percent and those from Vietnam to the EU by 20 percent by 2020.

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