(+84) 9 61 57 18 18
info@vietanlaw.com

Establish a company in Vietnam providing insurance business

Legal basis

  • Schedule of commitments on trade and services of Vietnam in the WTO;
  • The Law on Insurance Business 2022;
  • Decree 46/2023/NĐ-CP on details of implementation of certain articles of the Law on Insurance Business;
  • Circular 150/2016/TT-BTC providing for fees for issuance of license for establishment and operation of credit institutions; license for establishment of foreign banks’ branches, representative offices of foreign credit institutions or other foreign organizations having banking activities; license for provision of intermediary payment services by non-bank institutions, and the collection and transfer thereof.

Vietnam’s commitment to establish a company in Vietnam providing insurance business

According to Vietnam’s commitments within the WTO framework, Vietnam commits to allow open a company insurance business with foreign investment capital in Vietnam (1-100% foreign capital). Currently, foreign insurers have been allowed to establish branches of non-life insurance or branches of reinsurance enterprises in Vietnam.

Conditions for establishing a company in Vietnam providing insurance business

General conditions for being granted the establishment and operation license of an insurance enterprise

For organizations and individuals which contribute capital

  • Not falling into the prohibited categories specified in Clause 2, Article 18 of the Law on Enterprise;
  • Organizations and individuals participating in capital contribution must contribute capital in cash and may not use borrowed capital or investment trust capital of other organizations and individuals to contribute capital;
  • Organizations contributing 10% or more of charter capital must have profitable business activities for 03 consecutive years preceding the year in which the application for a license is submitted and have no accumulated losses up to the time of application submission;
  • In case the capital contributing organization is an insurance enterprise or a reinsurance enterprise that has been granted a license for establishment and operation in Vietnam, contributing capital to establish an insurance enterprise, the reinsurance enterprise must do business in Vietnam. be profitable in the last 03 consecutive financial years up to the time of submitting the application for a license and satisfy the capital adequacy ratio as prescribed by this Law.

For insurance enterprises and insurance broking enterprises to be established:

  • The charter capital is contributed in Vietnam Dong and not less than the minimum amount prescribed by the Government. Established shareholders and capital contributors may not use borrowed capital or investment trust capital of other organizations or individuals to contribute capital.
  • Having the type of enterprise, the company’s charter (for insurance enterprises and insurance brokerage enterprises), in accordance with the provisions of law. According to regulations, insurance business organizations include: Joint stock insurance companies; Insurance limited liability company ; Insurance cooperatives; Mutual insurance organization.
  • Having a manager or controller of the enterprise or the proposed branch (Chairman of the Board of Directors or Chairman of the Members’ Council, Director or General Director, legal representative, actuary) comply with the provisions of the law. Specifically:

General conditions and standards:

  • Having the right to manage the enterprise in accordance with the Law on Enterprises;
  • Not be sanctioned for administrative violations in the field of insurance business, not be disciplined in the form of dismissal for violating internal processes for 03 consecutive years before the time of appointment; not be prosecuted by a competent authority as prescribed by law at the time of being elected or appointed

In addition, for the Chairman of the Board of Directors, the Chairman of the Members’ Council, a member of the Board of Directors, a member of the Members’ Council, it is required to meet:

  • General conditions and standards;
  • Having a university degree or higher;
  • The Chairman of the Board of Directors, the Chairman of the Members’ Council has at least 5 years directly working in the fields of insurance, finance, banking or has at least 3 years holding the position of manager, operator; management and control at enterprises operating in the fields of insurance, finance and banking; members of the Board of Directors, members of the Members’ Council with at least 03 years directly working in the fields of insurance, finance, banking or having at least 03 years holding the position of manager, executive, control at enterprises operating in the fields of insurance, finance and banking.

For the Director or General Director, the legal representative needs to meet the following conditions;

  • General conditions and standards;
  • Having a university degree or higher in insurance major. If you do not have a university degree or higher in an insurance major, you must have a university degree or higher in another major and an insurance certificate issued by an insurance training institution that is legally established and operating in the insurance industry. domestic or foreign supply;
  • Having at least 05 years of working experience in the fields of insurance, finance and banking, of which at least 03 years are holding the position of manager or controller of an insurance enterprise or reinsurance enterprise. insurance, foreign branches;
  • Reside in Vietnam during the incumbent period.

For directors other than two separate cases specified above of an insurance enterprise, reinsurance enterprise or foreign branch in Vietnam, the following requirements must be met:

  • General conditions and standards;
  • Having a university degree or higher in insurance major. If you do not have a university degree or higher in a major in insurance, you must have a university degree or higher in another major and an insurance certificate suitable for the type of insurance that the business is allowed to deploy. insurance training established and operating legally in the country or abroad;
  • Having at least 03 years of working experience in the fields of insurance, finance, banking or the expected professional field. Particularly for heads of professional divisions, having at least 03 years of working experience in the insurance field or the expected professional field;
  • Reside in Vietnam during the incumbent period.

The controller of an insurance enterprise, reinsurance enterprise or foreign branch in Vietnam must satisfy general conditions and standards and other conditions and standards as prescribed by the Government.

At the same time, an enterprise manager must not be one of the subjects banned from managing an enterprise as prescribed in Clause 2, Article 18 of the Law on Enterprises, specifically:

For 03 consecutive years before the appointed time:

  • Not be sanctioned for administrative sanctions in insurance business in the form of being forced to remove an administrator title approved by the Ministry of Finance or forcibly suspend a title already approved by the insurer, insurance broking enterprises, foreign branches appointed;
  • Not be disciplined in the form of dismissal for violating internal procedures on exploitation, assessment, compensation, internal control, financial and investment management, reinsurance program in insurance enterprises, foreign branches or insurance broking professional processes, internal control, professional ethics rules in insurance broking enterprises;
  • Not directly related to the case that has been prosecuted by a competent agency in accordance with law at the time of appointment.

There are dossiers of application for licensing as prescribed.

Specific conditions for each type of insurance enterprise (with foreign investment):

Limited liability company Joint stock company
1. Conditions for organizations established under foreign laws:

a) Being an insurance enterprise, reinsurance enterprise, foreign financial or insurance group;

b) It is confirmed by a foreign competent authority that the foreign insurance enterprise, reinsurance enterprise, financial group or foreign insurance company has not seriously violated the provisions of the law on insurance business of the foreign country. the country where the enterprise’s head office is located within the last 03 consecutive years up to  the time of  submitting the application for a license;

c) The proposed field of application for a license to perform in Vietnam is the field in which insurance enterprises, reinsurance enterprises, foreign financial and insurance groups are directly engaged or have subsidiaries. at least in the last 07 consecutive years;

d) Having total assets of not less than 02 billion USD in the year immediately preceding the year in which the application for a license for establishment and operation is submitted;

dd) Commitment to provide financial, technological, corporate governance, risk management, operational and financial support to insurers and reinsurers to be established in Vietnam; ensure that the insurer and reinsurer comply with regulations on financial safety and risk management in accordance with the Law on Insurance Business;

e) Foreign insurance enterprises, reinsurance enterprises, financial groups and insurance companies that satisfy the conditions specified at Points b, c, d and  dd of this Clause may authorize their subsidiaries to specialize perform the function of investing abroad to establish insurance and reinsurance enterprises in Vietnam. Subsidiaries specializing in offshore investment must meet the minimum total assets requirements;

2. Conditions for economic organizations established under Vietnamese law: having total assets of not less than VND 2,000 billion in the year immediately preceding the year in which the application for a license is submitted;

1. There are at least 02 institutional shareholders and each of these shareholders meets the following conditions:

a) Having to contribute 10% or more of the charter capital of the insurance enterprise or reinsurance enterprise;

b) Conditions applicable to limited liability companies;

2. An individual shareholder may not contribute more than 10% of the charter capital of an insurance enterprise or reinsurance enterprise.

 

Special conditions for branches of foreign insurance enterprises in Vietnam

Conditions of foreign enterprises to have the right to establish branches

  • Head office: the head office of the enterprise is located in a country that has signed an international treaty with Vietnam related to the agreement on the establishment of a branch in Vietnam; the foreign insurance state management agency where the enterprise’s head office is located has signed an international agreement with the Ministry of Finance of Vietnam on management and supervision of the branch’s operations;
  • Licensing: being permitted by the host country management agency to set up a branch in Vietnam to operate within the scope of insurance operations in which the enterprise is allowed to do business;
  • Experience: at least 07 years of experience in the field in which the license is proposed to be applied in Vietnam;
  • Minimum total assets: at least 2 billion USD in the year immediately preceding the year of submitting the application for an establishment and operation license;
  • Business performance: have financial statements recognizing profits for the last 3 consecutive financial years up to the time of submission of audited dossiers with fully accepted opinions;
  • Commitment to guarantee and take responsibility for all obligations and commitments of the foreign branch in Vietnam.

Operating conditions

  • Capital: granted in Vietnam Dong, not lower than the prescribed minimum;
  • Source of capital: legal, not using loan or investment trust capital in any form;
  • Personnel: There is a branch director, actuaries expected to meet the conditions and standards of management capacity, experience and professional expertise as prescribed above.

Procedures to establish a company in Vietnam providing insurance business:

Required documents:

Insurance/ reinsurance limited liability company Insurance/ reinsurance joint stock company Iinsurance company branch
1. An application form for a License, made according to the form specified in Appendix I of Decree 46/2023/ND-CP.

2. Draft the company’s charter as prescribed in Article 25 of the Law on Enterprises.

3. Operation plan for the first 5 years suitable to the business field for which the License is requested, clearly stating the insurance operations to be deployed, target market, distribution channel, and method of setting aside the project. operations department, reinsurance program, capital investment, business efficiency, solvency, internal control, internal audit, risk management, information technology of insurers, enterprises reinsurance industry.

4. Copy of citizen identification card or ID card or passport; judicial record card according to the form or equivalent document of a foreigner as prescribed by foreign law; curriculum vitae, copies of diplomas, certificates and other documents proving the satisfaction of conditions and standards of the person expected to be appointed as Chairman of the Members’ Council, Director or General Director, Representative according to the law, actuaries of insurance enterprises and reinsurance enterprises.

5. List of capital contributors and the following attached documents:

  • A copy of the establishment decision, enterprise registration certificate/ other equivalent document;
  • Copy of the company’s charter;
  • Document of the competent authority of the capital contributing organization deciding on the participation in capital contribution to establish the insurance enterprise;
  • Authorization letter, copy of citizen identification card, ID card, or passport of the authorized representative of the capital contributing organization;
  • A copy of the audited financial statement for the three consecutive years preceding the year in which the application for a license is submitted. In case a foreign insurance enterprise authorizes a subsidiary to contribute capital to establish an insurance enterprise in Vietnam, it shall also provide similar financial statements of that subsidiary;

The audited financial statements must meet the requirements at Point d, Clause 1, Article 11 of Decree No. 46/2023/ND-CP.

  • Authorization letter of foreign insurance enterprise for subsidiary company specializing in offshore investment and commitment together with subsidiary to be responsible for capital contribution and obligations of subsidiary in the establishment of foreign insurance company. establishment of an insurance enterprise in Vietnam (in case a foreign insurance enterprise authorizes a subsidiary specialized in performing the function of offshore investment to establish an insurance enterprise in Vietnam).
  • A written commitment of an insurance enterprise, reinsurance enterprise, financial group, or foreign insurance company to provide financial, technological, corporate governance, risk management, operating and operational support for the company. insurance enterprises, reinsurance enterprises to be established in Vietnam; ensure that the insurer and reinsurer comply with regulations on financial safety and risk management in accordance with the Law on Insurance Business;
  • Documents evidencing the operation experience of the foreign insurance enterprise participating in capital contribution satisfying the provisions of Point c, Article 65.1 of the Law on Insurance Business.

6. The list of beneficial owners includes information about their full name, date of birth, identity card number or citizen identification number or passport number, nationality (in case of multiple nationalities, it must be recorded). full nationality and registered addresses of residence in the country of nationality), residential address in Vietnam (if any), direct and indirect ownership rates in insurance enterprises, enterprises The reinsurance business is expected to be established.

7. Certification of the bank licensed to operate in Vietnam on the level of charter capital deposited in the escrow account opened at the bank, clearly stating the contributed capital amount of each member.

8. Minutes of the meeting of capital contributors (for the application file for the establishment of a limited liability company with 2 or more members) on:

a) Agree to contribute capital to establish a limited company, together with a list of capital contributors;

b) Approve the draft of the company’s charter.

9. A written certification from the competent authority of the host country proving that the foreign insurance/reinsurance enterprise, financial group, or insurance company:

a) have the right to be allowed to set up an insurance/reinsurance business in Vietnam. If the regulations of the host country do not require a written approval, a written certification from a competent agency, organization or individual must be obtained in accordance with the law of that country;

b) is operating in the field of activity intended to be carried out in Vietnam;

c) is in a good financial position and meets all regulatory requirements;

d) No serious violations of regulations on insurance business and other laws of the country where the foreign organization’s head office is located within 03 consecutive years preceding the year in which the application for issuance is submitted. License.

10. Document of a competent state agency on the Vietnamese organization’s capital contribution meeting the conditions of financial safety and being allowed to contribute capital to establish an insurance enterprise in accordance with specialized laws.

11. The written commitment of capital contributors to the satisfaction of conditions to be granted a License.

12. Documents proving that the capital contributing organization operates in the business lines that require the minimum legal capital or charter capital or the minimum capital that meets regulations.

13. Document on authorization to carry out the procedures for applying for a License.

1. An application form for a License, made according to the form specified in Appendix I of Decree 46/2023/ND-CP.

2. Draft the company’s charter as prescribed in Article 25 of the Law on Enterprises.

3. The operation plan for the first 5 years, suitable to the business field for which the License is requested, clearly states the contents as prescribed.

4. Copy of citizen identification card or ID card or passport; judicial record card according to the form or equivalent document of a foreigner as prescribed by foreign law; curriculum vitae, copies of diplomas, certificates and other documents proving to meet the conditions and standards of the expected business manager.

5. Profile of individual founding shareholders:

  • Copy of citizen identification card or ID card or passport; judicial record card according to the form or equivalent document of a foreigner as prescribed by foreign law;
  • Bank confirmation of the balance of VND or freely convertible foreign currency deposited at the bank.

6. Dossier of shareholders contributing 10% or more of the charter capital being an organization (including items and documents similar to the list of capital contributors of an insurance company , instead of documents proving operation experience. form a document proving that the organization has contributed capital to satisfy the provisions of Article 66.1 of the Law on Insurance Business).

7. Profile of shareholders contributing less than 10% of charter capital being organizations:

  • 4 file entries similar to the list in item 6, including a copy of the establishment decision, charter, decision on capital contribution, authorized representative.
  • A copy of the audited financial statement for the fiscal year immediately preceding the year in which the application for a license is submitted.

8. The list of beneficial owners includes information about their full name, date of birth, identity card number or citizen identification number or passport number, nationality (in case of multiple nationalities, it must be recorded). full nationality and registered addresses of residence in the country of nationality), residential address in Vietnam (if any), direct and indirect ownership rates in insurance enterprises, enterprises The reinsurance business is expected to be established.

9. Certification of the bank licensed to operate in Vietnam on the level of charter capital deposited in the escrow account opened at the bank, clearly stating the contributed capital amount of each member.

10. Minutes of meeting of shareholders on:

a) Agree to contribute capital to establish an insurance joint-stock company, together with a list of shareholders and founding shareholders;

b) Approve the draft of the company’s charter.

11. A written certification from a competent authority of the host country proving that the foreign insurance/reinsurance enterprise, financial group, or insurance company:

a) have the right to be allowed to set up an insurance/reinsurance business in Vietnam. If the regulations of the host country do not require a written approval, a written certification from a competent agency, organization or individual must be obtained in accordance with the law of that country;

b) is operating in the field of activity intended to be carried out in Vietnam;

c) is in a good financial position and meets all regulatory requirements;

d) No serious violations of regulations on insurance business and other laws of the country where the foreign organization’s head office is located within 03 consecutive years preceding the year in which the application for issuance is submitted. License.

12. A document from a competent state agency that the Vietnamese organization contributes capital to satisfy financial safety conditions and is allowed to contribute capital to establish an insurance enterprise in accordance with specialized laws.

13. Written commitment of capital contributors to the satisfaction of conditions to be granted a License.

14. Documents proving that the capital-contributing organization operates in the business lines that require the minimum legal capital or charter capital or the minimum capital that meets regulations.

15. Document on authorization to carry out the procedures for applying for a License.

1. An application form for a License, made according to the form specified in Appendix I of Decree 46/2023/ND-CP.

2. Draft the company’s charter as prescribed in Article 25 of the Law on Enterprises.

3. The operation plan for the first 5 years, suitable to the business field for which the License is requested, clearly states the contents as prescribed.

4. Copy of citizen identification card or ID card or passport; judicial record card according to the form or equivalent document of a foreigner as prescribed by foreign law; curriculum vitae, copies of diplomas, certificates and other documents proving to meet the conditions and standards of the expected business manager.

5. Documents about the foreign non-life insurance enterprise, foreign reinsurance enterprise, including a copy of the establishment decision, charter, branch establishment decision, dossier of authorized representative as authorized by the enterprise business, audited financial statements for the last 3 consecutive years, commitment to obligations and documents proving capital contribution in accordance with the provisions of Article 66.1 of the Law on Insurance Business.

6. Certification of the bank licensed to operate in Vietnam on the level of charter capital deposited in the escrow account opened at the bank.

7. A written certification from a competent authority of the host country proving that the foreign insurance/reinsurance enterprise, financial group, or insurance company:

a) has the right to be authorized to establish a branch in Vietnam and is operating in the field of activities intended to be carried out in Vietnam;

c) is in a good financial position and meets all regulatory requirements;

d) No serious violations of regulations on insurance business and other laws of the country where the foreign organization’s head office is located within 03 consecutive years preceding the year in which the application for issuance is submitted. License.

9. The written commitment of the foreign non-life insurer or reinsurer meeting the requirements to be granted a license

9. Documents proving that the organization participating in the capital contribution operates in the business lines that require the minimum legal capital or charter capital or the minimum capital that meets regulations.

Note:

  • A dossier of application for a license is made in 2 sets, of which 1 is the original and 1 is a copy;
  • For the application file for a license of a foreign organization or individual, each set includes 01 copy in Vietnamese and 01 in English;
  • Documents with foreign signatures, titles and seals in the application for a License must be consularly legalized;
  • Documents that are copies must be copies from the original book or certified;
  • Vietnamese copies and translations from foreign languages ​​into Vietnamese must be certified by a Vietnamese notary public in accordance with the law on notarization. Organizations and individuals applying for a license must be responsible for the accuracy of the application file for a license.

Location: Ministry of Finance (in person / by post / online public service system if eligible to apply). license must be responsible for the accuracy of the application file for a lic

Duration:

  • Within 30 days from the date of receipt of the application for a license, if the application is incomplete and invalid, the Ministry of Finance shall notify in writing of the request for supplementation or modification of the application. The maximum time limit for supplementing or amending the investor’s dossier is 06 months from the date of notification. In case the investor fails to supplement or amend the dossier within the prescribed time limit, the Ministry of Finance will refuse to consider and grant the License.
  • The maximum time for organizations and individuals to supplement or amend their dossiers is 12 months from the date of the first notice by the Ministry of Finance. Past the above time limit, the Ministry of Finance has the right to refuse to consider and issue a License.
  • Within 60 days after receiving a complete and valid dossier, the Ministry of Finance shall issue a License. In case of refusal to grant a License, the Ministry of Finance shall issue a written explanation clearly explaining the reasons therefor.
  • In case of issuance of establishment and operation license, the Ministry of Finance shall concurrently issue a written approval in principle to the proposed manager of a foreign insurance enterprise/branch in Vietnam.

State fees: 70,000,000/license

Procedures after insurance / reinsurance enterprises are granted establishment and operation licenses

  • At least 30 days before the date of official operation, insurance enterprises, reinsurance enterprises, foreign branches in Vietnam that have been granted establishment and operation licenses must disclose the contents of the license and the date of operation. is expected to officially operate on 01 printed newspaper in 03 consecutive issues or on Vietnam’s electronic newspaper with the following main contents:
    • Name and address of the head office, branch and representative office of the insurance enterprise or insurance brokerage enterprise; name and address of the foreign branch;
    • Content, scope and duration of activities;
    • Level of charter capital and contributed charter capital of insurance enterprises and insurance brokerage enterprises; allocated capital of the foreign branch;
    • Full name of the legal representative of the insurance enterprise, foreign branch or insurance brokerage enterprise;
    • License number and date;
    • Licensed insurance and insurance brokerage services.
  • Within 60 days from the date of issuance of the License, the insurance enterprise must use part of the contributed charter capital or the allocated capital to make a deposit at a commercial bank operating in Vietnam. The deposit level is equal to 2% of the legal capital.
  • Within 12 months from the date of issuance of the License, an insurance enterprise or an insurance broker enterprise must complete the following procedures in order to officially operate:
    • Convert the capital deposited in the escrow account into charter capital (or allocated capital);
    • Build the organizational structure, management apparatus, internal control, internal audit, risk management system in accordance with the form of operation in accordance with this Law and other relevant laws. mandarin; elect and appoint a legal representative; elect and appoint positions approved by the Ministry of Finance;
    • Promulgating internal management regulations on organization and operation, internal regulations on risk management and basic professional processes in accordance with the law;
    • Make a full deposit in accordance with this Law at a commercial bank operating in Vietnam;
    • Having a head office, physical and technical facilities, and a technological system suitable to the professional process of insurance business;
    • To publish the contents of the license for establishment and operation.

Notes: If within 12 months from the date of issuance of the License, the insurance enterprise, foreign branch, or insurance brokerage business fails to complete the prescribed procedures to commence operation, the Ministry of Finance License will be revoked.

If Clients have any inquiry about establishing a foreign-invested insurance business in Vietnam or have demand for conduct this procedure, please don’t hestitate to contact Viet An Law to approach the best support and advice.

Related Acticle

Establish a foreign invested (FDI) company in Long An

Establish a foreign invested (FDI) company in Long An

Establish a foreign invested company (FDI) in Long An to take advantage of the province’s dynamic investment climate. Long An province has attracted more than USD 11.1 billion in foreign…
Domestic Travel Service License Fees in Vietnam 2024

Domestic Travel Service License Fees in Vietnam 2024

Circular No. 43/2024/TT-BTC stipulates a 50% reduction in state fees for domestic travel licensing from July 1, 2024, to the end of 2024. This amendment promotes the development of the…
Post establishment process of JSC company in Vietnam

Post establishment process of JSC company in Vietnam

Key procedures after establishing a JSC company in Vietnam will be navigating in the next steps of this article. According to information from the Department of Business Registration Management (Ministry…
Minimum capital level for establishing a company in Vietnam

Minimum capital level for establishing a company in Vietnam

The minimum capital requirement for establishing a foreign-invested company in Vietnam is an important factor that businesses need to consider when planning their investment in Vietnam. According to the current…
Established company seals under Vietnamese law

Established company seals under Vietnamese law

During the operation process, the company seal is an important component, often used to stamp internal enterprise documents, economic contracts, etc. Therefore, enterprises need to comply with legal regulations on…

CONTACT VIET AN LAW

Hanoi Head-office

#3rd Floor, 125 Hoang Ngan, Hoang Ngan Plaza, Trung Hoa, Cau Giay, Hanoi, Vietnam

info@vietanlaw.com

Ho Chi Minh city office

Room 04.68 vs 04.70, 4th Floor, River Gate Residence, 151 – 155 Ben Van Don Street, District 4, HCM, Viet Nam

hcm@vietanlaw.com

SPEAK TO OUR LAWYER

English speaking: (+84) 9 61 57 18 18 - Lawyer Dong Van Thuc ( Alex) (Zalo, Viber, Whatsapp)

Vietnamese speaking: (+84) 9 61 37 18 18 - Dr. Lawyer Do Thi Thu Ha (Zalo, Viber, Whatsapp)