Note about the stock market's maximum foreign ownership ratio in Vietnam

Note about the stock market’s maximum foreign ownership ratio in Vietnam

Foreign ownership in the stock market is already regulated by the Government’s Decree No. 155/2020/ND-CP dated December 31, 2020, which details the implementation of a number of articles of the Securities Law. The State Securities Commission recently released guidelines and notes on the application of the aforementioned regulations for public businesses, organizations, and individuals.

Define the maximum ownership ratio in specific case in Vietnam

In terms of determining the maximum foreign ownership ratio, public businesses determine the maximum state ownership ratio for each industry as well as the rate of foreign ownership based on registered business lines. Article 139 of Decree 155/2020/ND-CP specifies the maximum state ownership ratio at the company.

On the national investment portal (https://vietnaminvest.gov.vn), the maximum state ownership ratio for each industry is determined based on international commitments, regulated by the government, and market access requirements for foreign investors.

If a public company declares a maximum state equity ratio of 0%, it must specify the sector (or business area of the industry) in which foreign investors have not yet been accessed.

In case the maximum state ownership ratio is announced at >0%, the registered business lines are not detailed or the scope is wide, the company needs to clarify the details of the registered business lines excluding operations. Foreign investors have not been approached.

In case a public company decides that the maximum foreign ownership ratio is lower than the rate allowed by law, the specific ratio must be approved by the General Meeting of Shareholders and specified in the company’s charter.

On that basis, the State Securities Commission notes that public companies need to clarify the scope of business for each line of business, report to the nearest General Meeting of Shareholders to amend and detail the registered business lines (if any), specifically approve the maximum state ownership ratio (in case the decision is lower than permitted by law) in accordance with the expected announcement of the maximum state ownership ratio.

The deadline for implementing notification procedures in Vietnam

Regarding the time limit for a public company to carry out the procedures for notifying the maximum state ownership ratio, according to the provisions of Article 141 of Decree 155/2020/ND-CP, the public company is responsible for determining the business investment industry and the maximum foreign ownership ratio in the company as prescribed in Clause 1, Article 139 of Decree 155/2020/ND-CP; and at the same time comply with the deadline for carrying out the procedures for notification of the maximum state ownership ratio as follows: Within 07 working days from the date the State Securities Commission confirms the completion of the registration of a public company.

In case a public company has not yet notified the maximum foreign ownership ratio as prescribed in Decree 155/2020/ND-CP, the company must carry out the procedures for notifying the maximum foreign ownership ratio. Before submitting the application file for listing registration, listing transfer, registration for trading, offering for sale or issuance of securities, shareholders of a public company offer shares to the public.

The public company must carry out the procedures for notifying the change of the foreign ownership ratio within 30 days from the date of occurrence of one of the following events: (i) Change in business investment or business lines leading to a change in the maximum foreign ownership ratio in the company; (ii) There is a change in the legal regulations on foreign ownership in the fields of investment and business that the company is operating; (iii) The company’s charter stipulates to change the maximum foreign ownership ratio.

On the basis of the above provisions, the State Securities Commission notes that public companies actively carry out the procedures for announcing the maximum state ownership ratio, and organizations and individuals comply with regulations on the maximum state ownership ratio on the stock market.

ASL LAW is a top-tier Vietnam law firm. If you need any advice, please contact us for further information or collaboration.

    CONTACT

    Your infomation


    *** Other services of ASL LAW – full-service Vietnam law firm ***

    Retainer service to enterprises

     

    International trademark registration

    Oversea investment consultancy for Vietnamese enterprises

     

    Patent in Vietnam

    PCT Patent in Vietnam

     

    PCT Patent Vietnam Entry

    Intellectual property services (Vietnam IP Firm)

     

    Vietnam Patent Agent

    Trademark in Vietnam

     

    Vietnam Patent Firm

    Vietnam Trademark Agent

     

    Patent translation in Vietnam

    How to register a trademark in Vietnam

     

    Vietnam Patent Translation Agent

    Copyright in Vietnam

     

    Vietnam IP Firm

    Vietnam Trademark

     

    Vietnam IP Agent

    Notes to company formation in Vietnam

     

    M&A

    How to open a company in Vietnam

     

    Banking & financial services

    Open representative office in Vietnam

     

    Contract consultancy

    Establish company in Vietnam

     

    Employment and labor

    Corporate services in Vietnam

     

    Litigation and dispute resolution

    Vietnam Law Firm

     

    Franchise in Vietnam

    Vietnam Antidumping Law Firm

     

    Vietnam Franchise registration

    Vietnam countervailing law firm

     

    Vietnam Business Law Firm

    Vietnam Real estate law firm

     

    Vietnam construction law firm

    Law firm in Hanoi

     

    Law Firm in Ho Chi Minh

     

     

    Contact Me on Zalo
    +84366667697
    WhatsApp chat