Profile
Vietnamese
CONDITIONS FOR FOREIGN INVESTORS TO ESTABLISH SECURITIES COMPANIES
The stock market is closely related and has a profound impact on a country’s economy, so with the goal of integrating into the international stock market but still maintaining the national economy, Vietnam has set strict conditions for foreign investors to establish securities companies.
CONDITIONS ON FOREIGN INVESTORS’ OWNERSHIP RATIO IN SECURITIES COMPANIES
Securities are a type of long-term valuable document or book entry confirming the legal rights and interests of the owner in the capital or assets of the issuing organization. Securities can generate profits or bring risks in income to the owner, so they have a price and are a commodity in the securities market. Securities today are expressed in intangible form through accounting records using electronic data to express the rights and interests in ownership of assets or capital for joint stock companies. Types of valuable documents considered as securities are regulated by the laws of each country with certain differences.
In particular, Vietnamese law stipulates that securities include: shares (showing the ownership relationship with the company); bonds (showing the creditor relationship); investment fund certificates and other types of securities such as convertible bonds or preferred shares. Vietnam is on the path of economic development, increasingly attracting the participation of domestic and foreign investors in the stock market.
According to Vietnam’s commitment when joining the WTO, the conditions for foreign investors to own a securities company in Vietnam with a charter capital of 51% or more are as follows:
⭕️The General Meeting of Shareholders, the Board of Members or the owner of the foreign organization approves the purchase of shares or capital contributions to own 51% or more of the charter capital of the securities business organization in Vietnam;
⭕️The General Meeting of Shareholders, the Board of Members or the owner of the securities business organization in Vietnam approves the permission for the foreign organization to purchase shares or capital contributions to own 51% or more of the charter capital;
⭕️Only use equity and other legal sources of capital to purchase shares or capital contributions and are not subject to ownership restrictions as prescribed;
⭕️The most recent annual financial report up to the time of application submission of the foreign organization (or the most recent consolidated financial report in case the foreign organization is a parent company) is prepared and audited in accordance with foreign law in accordance with international accounting and auditing standards.
CONDITIONS FOR FOREIGN INVESTORS TO ESTABLISH A SECURITIES COMPANY
Conditions on capital of a securities trading company
The contributed capital at the time of establishment of a securities trading company must be at least equal to the legal capital as prescribed in Clauses 1 and 2, Article 71 of Decree 58/2012/ND-CP. The legal capital for the company’s business operations is as follows:
- Securities brokerage: 25 billion VND;
- Securities self-trading: 100 billion VND;
- Securities investment consulting: 10 billion VND;
- Securities issuance underwriting: 165 billion VND;
The contributed capital to establish a securities trading enterprise or a branch of a foreign fund management company in Vietnam must be in Vietnamese Dong. In case an organization requests a license for many business operations, the legal capital is the total legal capital corresponding to each business operation requested for a license as above.
CONDITIONS FOR PERSONNEL OF SECURITIES TRADING COMPANIES
An organization intending to conduct securities trading must have a list of expected company personnel, including at least 03 securities practitioners suitable for each business activity for which the company requests a license to establish and operate.
The General Director (Director) of a securities company must meet the following standards:
✔️Not being prosecuted for criminal liability or serving a prison sentence or being prohibited by the court from practicing business according to the provisions of law;
✔️Have at least 02 years of experience working in professional departments in the fields of finance, banking, securities or in the finance, accounting, investment departments of other enterprises and have at least 02 years of management and operation experience;
✔️Have a Certificate of practice in financial analysis; Certificate of practice in fund management;
✔️Not being penalized under securities and stock market laws within the last 6 months up to the time of application submission.
CONDITIONS FOR PERSONNEL OF SECURITIES TRADING COMPANIES
An organization intending to conduct securities trading must have a list of expected company personnel, including at least 03 securities practitioners suitable for each business activity for which the company requests a license to establish and operate.
The General Director (Director) of a securities company must meet the following standards:
✔️Not being prosecuted for criminal liability or serving a prison sentence or being prohibited by the court from practicing business according to the provisions of law;
✔️Have at least 02 years of experience working in professional departments in the fields of finance, banking, securities or in the finance, accounting, investment departments of other enterprises and have at least 02 years of management and operation experience;
✔️Have a Certificate of practice in financial analysis; Certificate of practice in fund management;
✔️Not being penalized under securities and stock market laws within the last 6 months up to the time of application submission.
CONDITIONS ON SHAREHOLDERS AND CAPITAL CONTRIBUTORS IN THE COMPANY
The structure of shareholders and capital contributors in the company must meet the provisions in Clause 10 and Clause 6, Article 71 of Decree 58/2012/ND-CP and must ensure:
✔️At the time of registration for establishment, the organization participating in capital contribution has no accumulated losses on the most recent audited annual financial statements and the most recent reviewed semi-annual financial statements (if any);
✔️In case the securities company is organized in the form of a single-member limited liability company, the owner must be a commercial bank, insurance company or foreign organization that must meet the regulations.
ACCORDING TO CLAUSE 10, ARTICLE 71 OF DECREE NO. 58/2012/ND-CP
Conditions for foreign organizations to participate in contributing capital to establish or purchase to own 100% of the capital of a securities business organization must meet the following requirements:
✔️Being an organization operating in the fields of banking, securities, insurance and having a minimum operating period of 02 consecutive years prior to the year of participation;
✔️The specialized management and supervision agency in the foreign country in the fields of banking, securities, insurance and the State Securities Commission have signed a bilateral or multilateral cooperation agreement.
ACCORDING TO CLAUSE 6, ARTICLE 71 OF DECREE NO. 58/2012/ND-CP
The conditions for organizations participating in contributing capital to establish a securities business organization must meet the following:
✔️Have legal status; not in a warning status; not in cases where they are not allowed to establish and manage enterprises according to regulations;
✔️Business activities have been profitable in the previous 2 consecutive years. In addition:
⭕️In case of organizations operating in the fields of banking, securities, insurance, they must not be in a warning status; meet the conditions according to regulations;
⭕️In case of other economic organizations:
Have a minimum operating period of 05 consecutive years immediately before the year of participating in contributing capital to establish a securities business organization;
After deducting long-term assets, the remaining equity must be at least equal to the expected contributed capital;
The minimum working capital must be equal to the expected contributed capital.
Only equity capital and other valid capital sources may be used according to regulations; The most recent audited financial report must have no exceptions.
For comprehensive free CONSULTATION ON SECURITIES ENTERPRISE ESTABLISHMENT SERVICES FOR FOREIGN INVESTORS IN VIETNAM, please contact:
Phone: (+84) 961 366 238
Email:
Headquarters: No.44/A32-NV13, Gleximco A, Le Trong Tan street, An Khanh, Hoai Duc, Ha Noi, Vietnam.
Southern branch: A9.05 BLOCK A, SkyCenter Building, 5B Pho Quang Street, Ward 2, Tan Binh District, Ho Chi Minh City, Vietnam.
Central branch: 177 Trung Nu Vuong, Hai Chau District, Da Nang City
Facebook: https://www.facebook.com/hangluatSiglaw
