Profile
Vietnamese
Foreign investors contribute capital to securities trading companies
To achieve the position of being listed on the stock exchange, companies must not only have enough economic potential but also have enough expertise and undergo strict conditions. Therefore, their reputation is quite high, so foreign investors contributing capital to securities companies have been attracting a lot of FDI capital from individuals to foreign organizations.
This helps open up a securities trading industry, where securities experts will invest to help users. Thereby minimizing the possibility of capital loss for non-professional customers who still want to invest in securities. So what are the things that foreign investors need to know before contributing capital to a securities trading company? Let’s find out in the article below.
WHAT IS CAPITAL CONTRIBUTION TO A SECURITIES COMPANY ?
First, it is necessary to understand that “contributing capital to a company” is when an individual or organization uses assets (money or assets of similar value) to contribute to the charter capital of a company.
Therefore, contributing capital to a securities company is the activity of an individual or organization using money or assets of equivalent value to contribute to a securities company. Capital can be contributed to the charter capital before the establishment of the company or added to the charter capital after the company is established. Providing capital to a securities company, the foreigner who provides capital will not receive money but will receive from the company a value equivalent to the amount of capital invested.
CONDITIONS FOR FOREIGN INVESTORS TO CONTRIBUTE CAPITAL TO SECURITIES COMPANIES
Regarding foreign entities contributing capital to securities trading companies
If foreign investors wish to contribute assets to a securities trading company, they must first determine their capital contribution rights. According to the provisions of Vietnamese law and Vietnam’s international treaties, according to Article 17 of the Enterprise Law 2020, Vietnamese law only prohibits the following individuals and organizations from providing capital to securities companies:
- State agencies (such as the Government, the National Assembly, the President, etc.), or armed forces units from using state assets to invest in enterprises for personal gain for the organization they are working for.
- Other entities that the Law on Public Employees; the Law on Cadres and Civil Servants; the Law on Anti-Corruption do not allow to contribute capital to establish a securities trading company (if any)
So if it is not the case of the above prohibition, then foreign investors have the right to contribute capital to a securities trading company.
Charter capital of foreign investment in securities trading companies
According to Article 175 of Decree 155/2020/ND-CP, an organization providing securities consulting services in Vietnam must have a charter capital of at least VND 10 billion or more to establish a company. This is the total charter capital of foreign and domestic investors. Foreign investors can provide capital to establish a securities company in Vietnam. However, if the capital ratio of foreign investors exceeds 51%, investment registration procedures must be carried out.
The forms of capital that foreign investors can use are very diverse and rich, creating flexibility for investors and thereby encouraging more investment in securities trading companies in Vietnam. Specifically, foreign investors can contribute capital in three forms:
- Real gold, cash (USD, VND, Euro, …).
- Land use rights and assets attached to land (houses, architectural works, production forests, construction works, etc.), intellectual property rights (copyrights, patents, rights related to copyrights, etc.)
- Technology and technical secrets. For example: Dat Bike electric vehicle production formula
Types of securities companies that can contribute capital to
Contribute capital to a single-member limited liability company, a limited liability company with two or more members, and a partnership if contributing capital to establish the company from the beginning. Contribute capital by purchasing shares in a joint stock company, contributing capital to a single-member limited liability company, a two-member limited liability company, and a partnership if contributing additional capital after the company has been established.
Other specialized requirements
International documents of which Vietnam is a member allow foreign investors to own 100% of the charter capital of a securities trading company. However, Vietnam’s domestic law, specifically Decree 58/2012/ND-CP (amended by Decree 60/2015/ND-CP) requires foreign investors to meet the following additional conditions to own 100% of the charter capital of a securities trading company:
- Belonging to the group of enterprises operating in the fields of securities, banking, insurance
- Having been operating for at least 02 consecutive years immediately preceding the year of capital contribution.
- Having a cooperation agreement (bilateral or multilateral) related to cooperation, information sharing, supervision,… of securities activities and markets between foreign management, inspection and supervision agencies and the State Securities Commission of Vietnam.
- Other conditions are specified in Clause 6 of Decree 58/2012/ND-CP.
PROCEDURE FOR FOREIGN INVESTORS TO CONTRIBUTE CAPITAL TO A SECURITIES COMPANY
Foreign investors contribute capital to operating securities companies
|
Step one: Prepare adequate, correct and valid documents to register for capital contribution to a securities company. |
The registration form for capital contribution, share purchase, and capital contribution includes the following contents: Information of the company receiving the capital contribution (company name, enterprise code, etc.); Ratio of charter capital ownership of the foreign investor after contribution. | 01 original document |
| ID card/passport (if the foreign investor is an individual); or Certificate of establishment or other equivalent document (if the foreign investor is an organization). | 01 certified copy | |
| Authorization letter (if the investor does not directly submit the application but authorizes another person) | 01 copy | |
| Step 2: Submit application for capital contribution to securities company | Place of submission: Business registration office of the province/city where the securities trading company is headquartered. Some typical addresses:
|
|
| Step 3: Get results | Within 15 days from the date of receiving valid documents, investors will receive the results. If the capital contribution is not approved, the Investment Registration Office will notify in writing. Once the results of the capital contribution to the securities trading company are available, investors can contribute capital by opening an investment account at a commercial bank in Vietnam. | |
Foreign investors contribute capital to establish a securities trading company
Step 1: Application for Investment Certificate
- 01 Application for investment project execution.
- 01 copy of house/office lease contract to implement the investment project.
- 01 certified copy of Vietnamese ID card/passport (if joint venture with Vietnam);
- 01 certified copy of foreign investor’s passport (for foreign individuals)
- Investment project proposal. The proposal includes quite a lot of content, such as: investor information, objectives, scale, capital sources and capital mobilization plan, location, project completion deadline and investment plan, proposed investment incentives, labor demand, impact assessment, etc.
- 01 certified copy of ID card/passport of the investment representative of the foreign investment organization in Vietnam (if it is an organization);
- 01 Annual Financial Statement audited by a foreign agency for the last two years (must be certified by a consular agency and valid for 90 days) ((if an organization)
- 01 certified copy of the Enterprise Registration Certificate Of the foreign organization (if an organization);
- 01 Certificate of account balance of the foreign investor equal to at least the investment amount. If the account is abroad, the documents must be consularly certified, translated into Vietnamese and notarized.
Step 2: Submit an application for an Investment Certificate to the Investment Registration Office – Department of Planning and Investment, where the enterprise is headquartered
Step 3: Establish an FDI enterprise in the securities business sector
INCENTIVES WHEN FOREIGN INVESTORS CONTRIBUTE CAPITAL TO SECURITIES COMPANIES IN VIETNAM
State policy: opening the market to welcome foreign investors to contribute capital to securities companies, allowing investors to contribute up to 100% foreign capital to securities companies; short procedures; diverse investment forms suitable for many needs of investors; foreign individuals or organizations can contribute capital; etc.
Siglaw’s policy ensures incentives:
- Free consultation, 24/7, for all questions about contributing capital to securities trading companies in Vietnam
- Ensure work is completed quickly, neatly, 100% on time as agreed
- A team of lawyers and consultants with more than 10 years of experience in consulting and executing procedures for capital contribution to securities companies
Phone: (+84) 961 366 238
Email:
- vphn@siglaw.com.vn
- vphcm@siglaw.com.vn
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
