Foreign investment in vietnam's securities company
After more than 20 years of establishment and development, Vietnam’s stock market has made important achievements in the process of international integration, especially since Vietnam joined the World Trade Organization (WTO) in 2007. WTO Protocol on Accession have opened up many opportunities for foreign investors to engage in securities trading in Vietnam. The following article will address the conditions and procedures that foreign investors need to perform when they wish to contribute capital to a Vietnamese securities company.
Legal documents (for reference):
Law on Enterprise 2014;
Law on Securities 2006 ( Amending, Supllementing a number of articles of Law on Securities 2010) and its guidelines (Decree No.58/2012/NĐ-CP, Decree No.60/2015/NĐ-CP);
International commitments and treaties to which Vietnam is a signatory (such as WTO Protocol on Accession).
The conditions that foreign investors have to fulfill:
The investor’s charter capital: According to WTO Protocol on Accession, foreign investors are now able to own 100% of the capital of a securities company. However, in accordance with the Law on Securities, Decree 58/2012/NĐ-CP is amended by Decree 60/2015/NĐ-CP, investors should meet the following conditions to own 100% Capital of a securities trading company:
Being organization operating in banking, securities, insurance area with a minimum of 02 years of operation preceding the year participating in capital contribution for establishment, share purchase and contributed capital;
The specialized management and supervision agency in foreign country in the area of banking, securities, insurance and the State Securities Commission have signed bilateral or multilateral cooperation agreement on information exchange, management cooperation, inspection and supervision of securities activities and securities market;
Meeting relevant provisions in Clause 6, Article 71 of Decree 58/2012/NĐ-CP.
If foreign investors are organizations failing to meet requirements stipulated in Decree 58/2012/NĐ-CP, or if they are individual investors, they shall be entitled to hold less than 51% of the charter capital of a securities trading organization; The form of investment, operating scope, Vietnamese partners, and other aspects are conformable with the international agreements to which the Socialist Republic of Vietnam is a signatory:
On the form of investment: contribute capital, buy shares or capital contributes of the market research companies.
Due to the fact that securities trading is a conditional business line, foreign investor has to carry out the procedure to register the capital contribution or purchase of shares/capital contribution.
An application for registration of capital contribution or purchase of shares/capital contribution:
A written for registration of capital contribution or purchase of shares/capital contributions, which specify information about the business organization to which investment is made; the holding of the foreign investor after making investment;
A copy of the ID card or passport (if the investor is an individual); a copy of the Certificate of establishment or an equivalent paper that certifies the legal status of the investor (if the investor is an organization);
A procuration or service contract (in case company’s legal presentative does not directly do the formality to file and receive the result).
Procedures for registration of capital contribution or purchase of shares/capital contributions:
The investor shall submit the application prescribed above at the Service of Planning and Investment of the province where the headquarter of the business organization is situated;
If the contribution of capital, purchase of shares/capital contributions satisfies the conditions of the Law on Investment 2014, the Service of Planning and Investment shall send a written notification to the investor within 15 days from the day on which the satisfactory application is received. If conditions are not satisfied, the Service of Planning and Investment shall notify the investor in writing and provide explanation.
After receiving the permit, foreigners shall contribute capital to the securities company. The company receiving the capital contribution will carry out procedures for changing its members/shareholders in accordance with the law. But if foreign investors wish to contribute capital to establish a foreign-invested securities company, the implementation process will be: Apply for Invesment Registration Certificate è Establish foreign-owned market research Vietnam. These procedures will take more time than contributing capital to an operating company.
All procedures related to foreign investors to contribute capital to Vietnam’s securities company, please contact the Viet An Law Firm for more details.
Currently, foreign investors are developing business into our country more and more strongly. However, for a number of reasons, foreign investors want to terminate operations in Vietnam; At that time,…
Extension of the term for investment capital contribution is a very important procedure to record the term for new capital contribution on the investment registration certificate when the enterprise cannot…