Decree No.01/2014/ND-CP (“Decree 01”), which sets out regulations on the purchase of shares in Vietnamese credit institutions (“VCIs”) by foreign investors, was passed by the Government on 3 January 2014 and took effect on 20 February 2014.
The new Decree 01 replaces Decree No. 69/2007/ND-CP, which governed the same area.
Specifically, Decree 01 governs the acquisition of shares by foreign investors in joint-stock VCIs and VCIs undergoing equitization.
According to Decree 01, there are three forms of share acquisition:
- Purchase of shares in joint-stock VCIs;
- Purchase of shares in the event joint-stock VCIs sell their shares to increase charter capital or sell treasury shares; and
- Purchase of shares in the event VCIs transform their legal form into a joint-stock VCI.
Decree 01 further sets a limit on foreign ownership in VCIs, which varies from 5% to 30% of the VCI’s charter capital, depending on the type of investor (foreign individual, foreign organization or foreign strategic investor).
Decree 01 also lists out conditions that are applicable to foreign investors purchasing the shares when the resulting shareholding would be more than 10%, as well as general conditions against strategic investors. On the other side of the transaction, the Decree specifies conditions against VCIs for selling their shares.
Accordingly, Decree 01 sets out the relevant rights and obligations to which the foreign investors acquiring a VCI’s shares are entitled.
By Vietnam Law Insight, LNT & Partners.
Disclaimer: This Briefing is for information purposes only. Its contents do not constitute legal advice and should not be regarded as detailed advice in individual cases. For more information, please contact us or visit the website: Http://LNTpartners.com