New Regulations Open Up Vietnam to Foreign Investors
Jan. 28 – The Vietnamese Ministry of Finance issued Circular No. 213/2012/TT-BTC last week in a move to increase the participation of foreign investors in Vietnam’s securities market. The Circular also includes provisions on disclosure requirements for foreign investors. It will take effect on February 15 and will replace Decision No. 121/2008/QD-BTC.
Under the Circular, it will be easier for foreign investors to open securities trading accounts. Furthermore individual foreign investors will no longer need to submit judicial background records; only a notarized copy of a valid passport or other official identification documents will be necessary. Documents obtained in the investor’s country of origin may be notarized and certified under foreign law and given consular certification under Vietnamese law.
The new regulation will also shorten the time needed for securities trading codes to be issued. The codes will be granted by the Vietnam Securities Depository Center within five days for institutional investors and within three days for individual investors. Codes may also be granted to foreign investors with insufficient documentation, and will remain active for up to nine months until the foreign investor submits the necessary document(s).
The Ministry of Finance has also recently issued circulars which pertain to the qualifications and financial requirements for foreign investors incorporating a fund management company.
The following documents are necessary to apply for a license to establish either a domestic or foreign-invested fund management company:
- An application form;
- Minutes and resolution of the shareholder’s meeting approving the establishment of the fund management company;
- The company’s proposed charter;
- A memorandum of understanding for the leasing of a head office;
- A business plan for the company’s first three years;
- Documentary evidence of the financial capacity of the company’s investors; and
- A list of all the shareholders, board of management/control board members and principal management staff.
The State Securities Commission will be required to issue a notice in lieu of the “in-principal approval” provided for under Decision 35/2007/QD-BTC within 20 days upon the submission of an application. Afterwards, the applicant will have three months to correct any errors in the application packet. If there are any corrections, the commission will issue the license with seven days.
Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.
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