Establish a branch of a foreign securities company in Vietnam

Nowadays, when the stock market becomes more and more active, in addition to the activities of securities companies, branches of foreign securities companies in Vietnam are increasingly expanding and developing. In the article below, Viet An Law Firm will provide clients with some information to establish a branch of a foreign securities company in Vietnam.

Legal basis

• Law on Securities 2019.
• Decree 155/2020/ND-CP detailing the implementation of several articles of the Law on Securities.
• Circular 97/2020/TT-BTC guiding the operations of representative offices, branches of securities companies, and foreign fund management companies in Vietnam.

What is the foreign securities company in Vietnam?

According to Clause 3 Article 2 of Circular 97/2020/TT-BTC, a branch of the foreign securities company is an affiliated unit of the securities company that is not a juridical person, is established following the law of Vietnam, and has all of its operations in Vietnam responsible before the law of Vietnam by its parent company.

If the securities company is allowed to carry out the operation of securities brokerage, securities proprietary trading, securities underwriting, or securities investment consultancy services, the branch of a foreign securities company in Vietnam shall be only allowed to provide securities investment consultancy services.

The branch of a foreign securities company in Vietnam’s specific operations provides analysis results, analysis reports,  giving recommendations to the clients with fee or no fee in some cases as follows:

• Providing reports on analysis of transactions on the securities market and investment recommendations;
• Providing reports on analysis of operations of public companies, listed companies, and other enterprises and investment recommendations;
• Signing securities investment consultancy service contracts with clients.

Requirements to establish a branch of a foreign securities company in Vietnam

According to Article 76 of Law on Securities 2019, a foreign securities company is allowed to establish a branch in Vietnam when the following requirements are satisfied:

Requirements for contributing capital

A foreign company contributing capital to establish, and purchase shares and stakes to hold 100% charter capital of a securities company, has to meet the following requirements:

• Be licensed and have a continuous operation period in the fields of banking, securities, and insurance within 02 years preceding the year of contributing capital to establish, purchasing shares, and stakes;
• The home country’s licensing authority and State Securities Commission have entered into a mutual or multilateral agreement on information exchange, management cooperation, inspection, supervision of securities activities, and securities market;
• The company’s business has profit in 02 years before the year in which capital is contributed, shares/stakes are purchased and the latest annual financial statement has been audited without rebuttal.

Besides, the branch has not established or contributed capital into any securities company, or management company on securities investment funds in Vietnam of the foreign securities company owning over 49% charter capital.

Requirements for capital

According to Clause 2 Article 175 of Decree 155/2020/ND-CP, the minimum capital provided for a branch of a foreign securities company in Vietnam is 10 billion Vietnam dong.

Requirements for infrastructure

• The premises are adequate for securities trading;
• Available equipment, and technologies are adequate for securities trading processes.

Requirements for personnel

There is a General Director (Director), at least 03 employees having securities investment consultancy certifications and at least 01 employee in charge of compliance management. The General Director (Director) has to meet the requirements according to Clause 5 Article 74 of Law on Securities 2019.

Requirements for premises

Premises of a branch of a foreign securities company in Vietnam shall be situated in the territory of Vietnam, be the contact address of the foreign securities company’s branch, have an identified address, telephone number, fax number, email (if any), and must comply with regulations of Vietnamese law on security, public order, occupational safety and health, and relevant laws.

Note: According to Article 3 of Circular 97/2020/TT-BTC, a branch of a foreign securities company is not allowed to lend or sublease the premises.

Requirements for name

According to Article 5 of Circular 97/2020/TT-BTC, the name of a branch of a foreign securities company in Vietnam shall ensure the following requirements:

• Must consist of letters in the Vietnamese alphabet, the letters F, J, Z, W, digits, and symbols.
• The branch’s name must consist of the foreign securities company’s name.
• The branch is named in the following order: “Branch – the name of the foreign securities company – in Vietnam”.
• The branch’s name must be mounted at its representative offices and branch premises.

Procedures for establishing a branch of a foreign securities company in Vietnam

Step 1: Apply for a License to establish a branch of a foreign securities company

The State Securities Commission has the authority to license for establishment and securities business operations to branches of foreign securities companies in Vietnam. In Article 177 of Decree 155/2020/ND-CP, the dossier to request a License for establishment and operation includes the following documents:

• An application for establishment and securities business operations for branches of foreign securities companies.
• The decision issued by a competent authority according to the company’s charter on establishment of the branch in Vietnam; appointment of the branch manager, provision of capital for the branch of the foreign securities company in Vietnam.
• The list of personnel, and personal information sheets enclosed with the judicial record of the branch manager which is issued within the last 06 months before the application is submitted.
• The charter of the foreign securities company.
• Approval document of the competent authorities of the foreign country where the foreign securities company is headquartered (if any).
• License for establishment and operations of the foreign securities companies or equivalent documents issued by competent authorities of its home country.
• The latest audited annual financial statement of the foreign securities companies. The foreign securities companies that are parent companies have to supplement their audited consolidated financial statements.
• The premises lease contract, documents proving the right to own and use the premises; description of infrastructure.
• The decision issued by a competent authority on processes for operation, internal control, and risk management processes.
• Documents related to investment funds in Vietnam (if any).

Step 2: The State Securities Commission receives and processes the application.

• Within 20 days from the date of receipt of the valid and sufficient application, the State Securities Commission shall send a written request for completion of facilities, freezing of contributed capital, and preparation of personnel. The shareholders, contributing members, and owners of the company may use contributed capital to invest in facilities. The remainder of contributed capital shall be frozen in an account opened at a bank, which will only be unfrozen after the license for establishment and securities operation is issued.
• 03 months from the day of receiving the State Securities Commission’s request document, if the shareholders, contributing members, and owner of the company don’t complete the facilities, freezing the remainder of the charter capital and preparation of personnel, the State Securities Commission is entitled to reject the application.
• Within 05 working days from the receipt of the capital freeze confirmation, facilities inspection record, and other valid documents, the State Securities Commission shall issue the License for establishment and securities business operations. In case the application is rejected, the State Securities Commission shall issue a written rejection and explain.

Note: Changes of the branch’s name, address, and parent company’s name are allowed by the State Securities Commission before changing.

Step 3: Apply for business registration

According to Article 70 of  Law on Securities 2019, after being granted the License for establishment and securities business operations, a branch of a foreign securities company in Vietnam shall apply for business registration at a business registration authority.

Step 4: Publish the information and notify the operation

The branches of the foreign securities companies in Vietnam shall publish their operation through the media of the State Securities Commission and 01 online newspaper or 03 continuous issues of a printed newspaper at least 30 days before its expected inauguration date. Publication information includes:

• License for establishment and securities business operations issued by the State Securities Commission;
• Official inauguration date. Official inauguration dates decided by the branches of the foreign securities companies have to ensure official operations within 12 months from the license dates and the branches must not trade securities before their official inauguration dates.

The branches of the foreign securities companies in Vietnam are allowed to operate officially when ensuring the following requirements:

• Having an Enterprise Registration Certificate licensed by the business registration authority.
• Having the processes for operation, risk management, and internal control.

Noted obligation to notify conditions

The licensed branches of the foreign securities companies in Vietnam shall send a notice of their fulfillment of requirements to the State Securities Commission at least 15 days before their official inauguration date.

Service for the establishment of a company in Vietnam by Viet An Law Firm

• Legal advice on conditions, documents, procedures, and licenses to establish branches of foreign securities companies in Vietnam;
• Draft documents, records, and documents for clients as requested;
• Representing clients, conducting procedures at competent authorities, and responding to feedback;
• Regular legal advice for the branch after its establishment.

Clients who have related questions or need legal support regarding establish a branch of a foreign securities company in Vietnam, please contact Viet An Law Firm for the best support!

Disclaimer: This article was last updated in May 2024. Laws may have changed since then. Please contact Viet An Law to confirm the information in this article is current and for any legal assistance