Vietnam: Regulations on private placement of shares from January 1, 2021

Vietnam: Regulations on private placement of shares from January 1, 2021 - Illustrative image.

Under Article 125 of the Enterprise Law 2020, the private placement of shares of a non-public joint stock company in Vietnam shall satisfy the following conditions:

- The offering is not made through mass media;

- Shares are offered to fewer than 100 investors, not including professional securities investors or only offered to professional securities investors.

Notably, the private placement of shares of a non-public joint stock company in Vietnam  shall be carried out as follows:

- The company shall issue a decision on private placement of shares in accordance with this Law;

- The company’s shareholders exercise their rights to buy shares, except consolidation and acquisition of companies:

+ The company shall send a written notification by express mail to the shareholders’ mailing addresses written in the shareholder register at least 15 days before the deadline for subscribing for shares;

+ The notification shall contain the full name, signature, mailing address, nationality and legal document number if the shareholder is an individual; names, EID numbers or legal document number and headquarters address if the shareholder is an organization; the shareholder’s current shares and holding; the total quantity of shares offered and the number of shareholders having the right to buy them; the offered price; deadline for subscribing; full name and signature of the company’s legal representative. The notification shall be enclosed with the share subscription form issued by the company. If the share subscription form is not sent to the company by the deadline, it will be considered that the shareholder has renounced the right to buy shares;

+ Shareholders may transfer their right to buy shares to other persons.

- In case the shares are not completely bought by the shareholders and the persons that receive the rights to buy shares, the remaining number of shares shall be offered by private placement under conditions that are not more favorable than those offered to the shareholders, unless otherwise accepted by the GMS.

Further details may be found in Enterprise Law 2020 effective January 1, 2021.

Le Vy

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE