The policy of establishing a Business Improvement District (BID) in Cua Nam Ward (Ha Noi) is a pioneering initiative that requires not only visionary urban planning but also a robust and stable legal foundation to safeguard the lawful rights and interests of all stakeholders. In an interview with Vietnam Law Newspaper, Mr. Nguyen Hung Quang, Managing Partner of NHQuang&Associates (Ha Noi Bar Association), analyzed the core issues that need to be addressed to develop this cultural-commercial space more effectively.
Interviewer (I): When contributing to drafting several policy proposals under the Law on Capital, you were deeply passionate about the vision of a civilized, modern, greener, and culturally rich Capital. This vision now seems within reach as city leaders aim to pilot a BID in Cua Nam Ward (Ha Noi). What is your perspective on this policy?
Mr. Nguyen Hung Quang: I believe that Cua Nam Ward has great potential for developing cultural and commercial zones, such as the area surrounding the Opera House with streets like Pham Ngu Lao – Dang Thai Than – Alley No.1 Trang Tien, Nguyen Khac Can – Trang Tien Alley, Nguyen Khac Can – Pham Su Manh, Nguyen Che Nghia, Ngo Van So – Tran Quoc Toan – Truong Han Sieu, and the Ngo Xom Ha Hoi area connecting with Lien Tri – Nguyen Gia Thieu – Tran Quoc Toan streets.
Based on the experience of developing Business Improvement Districts (BIDs) in other countries, areas that already have long-term commercial activity, attract visitors with their landscape, valuable architectural works, or community cultural landmarks, can be considered for forming BID zones.
In BID zones, business actors and the residential community collaborate—either directly or via government facilitation—to create areas with enhanced security, sanitation, and streetscapes that are pedestrian-friendly. Businesses in the BID collectively promote and host events to attract shoppers and service users.
According to Ha Noi’s policy, BID zones will apply higher standards and conditions in business culture, security, public order, food safety, and environmental protection compared to general regulations. This aims to support sustainable economic growth through cultural and creative development while preserving traditional industries and values, and attracting tourism.
If one or more BID zones are formed in Cua Nam Ward, the model could generate vibrant new cultural spaces for Ha Noi’s urban life. At the same time, BIDs would enhance community cohesion among residents to jointly develop commerce, preserve cultural identities, and improve the area’s environment.
I: When the cultural-commercial development zone is established, what legal and social issues do you foresee? From a legal perspective, what are the necessary and sufficient conditions for implementing such a zone in a transparent and sustainable way?
Mr. Nguyen Hung Quang: Since BID zones apply elevated standards in business culture, safety, food hygiene, and environmental protection, some residents may object to complying with these higher standards or to contributing financially to BID operations—such as for sanitation, landscaping, street decoration, and security. The reason this is limited to a minority is that such standards or fees would be approved by a majority vote of the BID’s residents. Also, some residents outside the zone may be dissatisfied if certain streets become pedestrian-only or if transport is restricted to create cultural urban spaces or hold public events.
Therefore, the necessary conditions for a BID zone include (i) Over 50% of representatives from production, business, service establishments, cultural industry centers (if any), homeowners/architectural property owners, and permanent resident households must consent to the formation, governance model, and operational regulations of the BID; (ii) A development plan aimed at boosting commerce and culture for the broadest benefit of local residents; (iii) The ability to mobilize the community—artisans, artists, traditional craftsmen, intangible cultural heritage practitioners—to participate in cultural activities for the local and wider community; (iv) Transparent and accountable management and operations throughout the establishment, governance, and implementation phases.
The sufficient conditions are (i) Sustaining a public-private cooperation model between the State and residents for BID operations; (ii) Support and facilitation from local and city authorities to mitigate any negative impacts within and outside the zone; (iii) Government-appointed representatives must participate in BID supervision to prevent negative outcomes; (iv) Government must continue investing in sanitation, public safety, and other infrastructure, as done in other areas.
I: From a legal standpoint, what are the distinctive features of combining “culture” and “commerce” in a BID zone compared to a typical commercial zone?
Mr Nguyen Hung Quang: A BID zone is fundamentally different from a typical commercial area because of its cultural component, requiring specific legal attributes:
First, the community partnership for joint development is formalized through internal regulations. The BID is built on consensus among residents to establish a space integrating commercial and cultural activities. This communal relationship must be reflected and maintained through an organizational charter adopted by the majority of residents and approved by the State. Legally, this charter functions similarly to a rural village convention (“hương ước”). However, due to the urban context, it has a broader social impact and thus must follow a government-approved model and gain local authority approval post-adoption.
Second, cultural activities in the BID must be creative, ongoing, and may include controlled experimental cultural practices. These require government approval and oversight in accordance with legal provisions. Cultural activities serve as key attractions drawing both visitors and locals to enjoy the commercial and entertainment offerings.
Third, some BID zones may feature tangible and intangible cultural heritage, valuable architecture, distinctive landscapes, or unique customs. These necessitate State and community oversight to ensure that cultural values are preserved in harmony with commercial development.
I: To ensure a balance of interests among stakeholders, how should citizen and social organization oversight mechanisms be designed in the governance and operation of a cBID zone? Could you share legal lessons from BID models implemented in other cities or countries?
Mr. Nguyen Hung Quang: As I’ve partly mentioned, there are several measures to balance interests when operating a BID. For instance, a BID should have an operational charter that functions like a community’s “village convention.” The residents’ assembly should hold ultimate authority over organizational and operational decisions.
Depending on the size of the BID, the community may elect a Management Council to oversee or directly operate the zone. These meetings must be transparent, democratic, and governed by clear voting procedures. These are international best practices. In Hanoi, the local government and ward-level Fatherland Front should participate in monitoring and partially supporting BID operations to ensure interest alignment, budget transparency, and community governance while linking with broader urban activities.
I: Thank you very much, lawyer!
By Van Huong & Doan Trang, Vietnam Law Newspaper, July 30, 2025 (Vietnamese only)