Regulation on the proportion of purchasing shares of Vietnamese commercial bank by foreign investors

 The proportion of purchasing shares of Vietnamese commercial bank by foreign investors

 Vietnamese Government has just issued new Decree No. 01/2014/ND-CP dated 3 January 2014 with key changes as follows:

 1. The proportion of share ownership of a foreign individual does not exceed 5% of the charter capital of a Vietnamese commercial bank. It is unchanged from previous regulation.

 2. The proportion of share ownership of a foreign entity should not exceed 15% of the charter capital of a Vietnamese commercial bank, with the exception for foreign strategic investors whose proportion might reach 20%.These rates were 10% and 15% for commercial bank and 5% for non commercial bank entity from previous regulations.

 3. The proportion of share ownership of a foreign investor and his/her relatives should not exceed 20% of the charter capital of a Vietnamese commercial bank. It is 10% from previous regulation.

 4. The total proportion of share ownership of foreign investors should not exceed 30% of the charter capital of a Vietnamese commercial bank (it is unchanged from previous regulation). The total proportion of share ownership of foreign investors in a Vietnamese non-bank institution shall comply with the legal texts on public and listed companies.

 5. In special cases to implement the restructuring of non-performing commercial banks for the sake of the prudent banking sector, the Prime Minister will decide the proportion of share ownership of a foreign entity and a foreign strategic investor, however, the total proportion of share ownership of foreign investors in a restructured non-performing commercial bank might exceed the set ceiling proportion in case by case.

 6. The above-mentioned foreign ownership proportion also includes the capital proportion bought by entrusted individuals or entities.

 7. When the foreign investors convert their convertible bonds of Vietnamese commercial banks into shares, they are required to comply with the share ownership condition in line with law.

 8. The Decree also stipulates the forms and procedures for purchase of shares; conditions and price of shares of Vietnamese commercial banks; rights and obligations of foreign investors, and the responsibilities of the relevant authorities, Vietnamese commercial banks, and others.

 This Decree will take effect on February 20, 2014 and replace Decree No. 69/2007/ND-CP dated April 20, 2007 on purchasing shares of Vietnamese commercial banks by foreign investors

 This rule may be applied for Vietnamese credit institutions 

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