On 29 June 2016, the State Bank issued Circular 12/2016/TT-NHNN guiding offshore investments. Under Circular 12, an investor engaging in offshore investment is required to open an investment capital account in VND or an applicable foreign currency at a commercial bank in Vietnam. The account can only be opened once the investor has received approval from the Ministry of Planning and Investment to undertake offshore investment. All remittance in relation to the offshore investment must be conducted through this account.
For an offshore investment project with multiple investors, each investor must open its own investment capital account.
Non-credit institution investor must also register its foreign currency offshore investment activity with the local branch of the State Bank of Vietnam.
Foreign Holding in Securities Business
Under Decree 86/2016/ND-CP dated 1 July 2016 of the Government on securities business investment conditions, a foreign investor may acquire more than 51% of the charter
capital of a Vietnamese securities business (eg securities firm and fund management company) if it satisfies the following key conditions:
- It has at least two years’ operational experience in the banking, securities or insurance sector.
- It is based in a jurisdiction which has multilateral or bilateral cooperation agreement on management and supervision of securities activities with the State Securities Commissio of Vietnam.
- The acquisition is approved by the highest decision making body of the foreign organization and the securities business entity.
For more information, click Asia Counsel Insights 20 July 2016
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