Foreign Stock Investment Hampered by Legal Restrictions

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Feb. 12 – Foreign investors wanting to enter the Vietnamese stock market they are deterred by roadblocks relating to cumbersome procedures.

A foreign investor wanting to enter the stock market must have their legal record authorized by various agencies and visa approved by the Vietnam Securities Depository before getting a trade code. For foreigners residing in the country, papers need to be certified in their home country’s consulate before it is submitted to Vietnam’s Department of Foreign Affairs. Moreover, foreign investors are only allowed to buy amount of shares.

In June, the cap for foreign investors was raised from 30 percent to 49 percent for local non-bank companies. Foreign investors have increased investment in the Vietnamese stock market amounting to almost US$1.84 billion worth of shares in the Ho Chi Minh Stock Exchange last year, an increase of 34 percent from the previous year.

Majority of foreign investors come from the region notably Japan, China and South Korea. “The number of foreign investors opening accounts to trade directly on the Vietnam market will rise in the coming time,” Tran Anh Dung, chief broker at the Bao Viet Securities Company branch in Ho Chi Minh City told Thanh Nien News. “Thus there needs to be brokers who know foreign languages to work with them or to translate information concerning certain stocks and firms when needed.”