Answer

 Question: We are an US-based investment company. We have already set up our wholly owned company in Vietnam. We consider purchasing shares from unlisted Vietnamese companies. Is there any difference if our Vietnam-based company purchases the shares? Could we purchase 100% shares of a company? What are the conditions that we have to satisfy?

Answer:

Under the Decision No. 88/2009/QD-TTg of the Prime Minister promulgating the regulation on foreign investors’ contribution of capital to, and purchase of shares from Vietnamese enterprises, the foreign investors means (i) Organizations established and operating under foreign laws and their overseas and Vietnam-based subsidiaries, or (ii) Organizations established and operating in Vietnam with a foreign holding rate of over 49%, or (iii) Investment funds and securities companies with a foreign holding rate of over 49%; or (iv) Foreign individuals who do not hold Vietnamese citizenship, reside overseas or in Vietnam. Your wholly owned company in Vietnam shall be considered as foreign investor. Therefore, the conditions applying to your Vietnam-based company shall be the same as those applying to your US-based company.

You may purchase up to 100% shares of a Vietnamese company, except for a certain cases such as public companies, companies operating in sectors governed by specialized laws or international treaties to which Vietnam is a party. For a Vietnamese company operating in different sectors in which the limitation of foreign holding rates varies, the maximum share to be purchased shall not exceed the lowest foreign holding rate prescribed for any of these sectors. For a 100% State owned company, the maximum share to be purchased shall be at levels prescribed in plans approved by competent authorities.

For purchasing shares in Vietnamese companies, you shall have to satisfy following conditions:

(1) Having investment capital accounts opened at commercial banks in Vietnam. All activities of purchasing and selling shares, transferring contributed capital portions, collecting and using dividends and divided profits, remitting money abroad and other activities related to investment in Vietnamese companies shall be carried out via these accounts;

(2) Having copies of business registration certificates or other equivalent documents evidencing the legal status, certified by a competent authority of the country where your company have established;

(3) Other conditions specified in the charters of Vietnamese companies to be purchased and not contrary to law.