A government decree has been drafted for the purpose of regulating the purchase by foreign investors of shares in Vietnamese credit institutions whose shares are not yet listed on a stock exchange ("Decree").
When shares of a Vietnamese credit institution are listed, foreign investors shall be permitted to purchase shares in such credit institution in accordance with the law on securities and securities market and must comply with the share ownership ratio stipulated in the Decree.
The applicable entities are:
Vietnamese dong shall be the currency used in transactions of purchase by and sale of shares to foreign investors in Vietnamese credit institutions. A Vietnamese credit institution may make its own decision on the share ownership ratio of a foreign investor in the institution, provided that the following principles are observed:
In special cases, based on a proposal of the Governor of the State Bank, the Prime Minister may make a decision permitting the level of shareholding of any one foreign strategic investor and affiliated persons of such foreign strategic investor to exceed 15 percent, but in no case to exceed 20 percent of the charter capital of any one Vietnamese credit institution
A foreign credit institution shall be permitted to be a foreign strategic investor in only one Vietnamese financial institution and to participate in the board of management of no more than two Vietnamese credit institutions.
Among other things, a Vietnamese credit institution which sells shares to a foreign investor must have charter capital of at least VND 1,000 billion and any foreign credit institution purchasing shares in a Vietnamese credit institution must have minimum total assets equivalent to USD 20 billion in the year prior to the year of registration for the purchase of shares.
The Governor of the State Bank shall provide its written approval for the purchase by a foreign investor of shares in a Vietnamese credit institution in accordance with the provisions of the Decree and other relevant laws.
After obtaining written approval from the Governor of the State Bank for the foreign investor to purchase the shares, the concerned Vietnamese credit institution must publish a notice in the mass media about the sale of shares to the foreign investor and organize implementation of the sale of shares in strict accordance with law.
For inquiries related to this Client Alert, please contact:
Dao Nguyen ( )
Thinh Dan ( )
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