INVESTING IN VIETNAM COMPANY – HOW MANY PERCENT OF STOCKS FOREIGN INVESTORS CAN HOLD?

  • Currently, the number of foreigners investing in Vietnamese enterprises is increasing. One of the things that foreign investors are most interested in when carrying out procedures to invest in Vietnamese enterprises is how many percent of stock they can hold in the enterprise? To answer this question, Vu Nhu Hao and Associates Law firm would like to give advice to customers as follows:

    I. Legal basis:
    – Investment Law 2014
    – Decree No. 118/2015 / ND-CP Detailing and guiding the implementation of some articles of the Investment Law
    – Decree No. 60/2015 / ND-CP amending and supplementing a number of articles of Decree No. 58/2012 / ND-CP dated July 20, 2012 of the Government detailing and guiding the implementation of a number of articles of the securities law and the law on amendments and supplements to a number of articles of the securities law.

    II. Consulting content.

    Investment in capital contribution, share purchase, capital contribution to economic organizations is stipulated in Articles 24, 25 and 26 of the 2014 Investment Law and is detailed in Article 46 of Decree No. 118/2015 / ND- CP. Accordingly, foreign investors may contribute capital to economic organizations in the following forms:

    “a) Purchase of shares issued for the first time or additionally issued shares of joint-stock companies;
    b) Contribute capital to limited liability companies and partnerships;
    c) Contributing capital to other economic organizations not falling into the cases specified at Points a and b of this Clause.
    Foreign investors buy shares and contributed capital of economic organizations in the following forms:
    a) Purchasing shares of joint stock companies from companies or shareholders;
    b) Purchase of contributed capital of members of a limited liability company to become a member of a limited liability company;
    c) Purchase of contributed capital of capital-contributing members in partnerships to become capital-contributing members of partnerships;
    d) Purchase of contributed capital portions of other economic organization members not falling into the cases prescribed at Points a, b and c of this Clause. “

    With the share of capital contribution, as stipulated in Article 22 of the 2014 Investment Law:

    “Foreign investors are entitled to own unlimited charter capital in economic organizations, except in the following cases:
    a) Foreign investors’ ownership in listed companies, public companies, securities business organizations and securities investment funds in accordance with the law on securities;
    b) Foreign investors’ ownership in equitized State enterprises or other ownership changes shall comply with the provisions of law on equitization and transformation of State enterprises;
    c) The ownership ratio of foreign investors other than those specified at Points a and b of this Clause shall comply with other provisions of relevant laws and international treaties to which the Socialist Republic of Vietnam is. Is a member.”
    For foreign ownership in public companies (Clause 2 Article 1 Decree 60/2015 / ND-CP amending and supplementing a number of articles of Decree No. 58/2012 / ND-CP dated July 20, 2012) in 2012 of the Government detailing and guiding the implementation of a number of articles of the securities law and the law amending and supplementing a number of articles of the securities law):
    “first. Foreign ownership rate in public companies is as follows:
    a) In cases where an international treaty of which Vietnam is a member contains provisions on foreign ownership ratios, the international treaty shall be complied with;
    b) In case a public company operates in the business and investment lines and the law on investment and related laws stipulates a foreign ownership rate, the provisions of such law shall apply.
    For public companies operating in conditional investment business lines applicable to foreign investors without specific regulations on foreign ownership, the maximum foreign ownership ratio is 49%”;

    In general, the current law does not have the most general provisions restricting the percentage of foreign investors’ ownership of shares and contributed capital in Vietnamese enterprises. Depending on the specific industry, foreign investors wishing to register, the foreign investors’ ownership of shares and contributed capital in Vietnamese enterprises will be implemented in accordance with regulations. of Vietnamese law as well as international treaties to which Vietnam is a member.

    If you still have questions or want to use our legal services, you can contact us via the following means:

    Vu Nhu Hao and Associates Company Limited Law Company
    Skype: vu.nhu.hao
    E-mail: LawyerVuNhuHao@Gmail.com
    Facebook: https: //www.facebook.com/LuatsuNhaTrang
    Cellphone: 0914 086292
    Address: 16 Mac Dinh Chi, Phuoc Tien, Nha Trang, Khanh Hoa

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