What are the requirement of a joint stock company in Vietnam for offering its shares publicly? At which agency do I register for a public offering in Vietnam?
What are the requirement of a joint stock company in Vietnam for offering its shares publicly?
In Clause 1, Article 15 of the 2019 Law on Securities in Vietnam, a joint-stock company (the issuer) shall satisfy the following requirements to offer its shares publicly:
- The contributed charter capital is at least 30 billion VND on the offering date according to the accounting books;
- The company has profit over the last 02 years and has no accumulated loss on the offering date;
- There is a plan for issuance and use of capital generated by the offering ratified by the General Meeting of Shareholders;
- At least 15% of its voting shares have been sold to at least 100 non-major shareholders. If the issuer’s charter capital is 1.000 billion VND or above, the ratio shall be 10%.
- Before the offering date, the major shareholders have made a commitment to hold at least 20% of the issuer’s charter capital for at least 01 year from the end of the offering;
- The issuer is not undergoing criminal prosecution and does not have any unspent conviction for economic crimes;
- The offering is consulted by a securities company, unless the issuer is already a securities company;
- The issuer has a commitment to have its shares listed or registered on the securities trading system after the end of the offering;
- The issuer has an escrow account to receive payments for the offered shares.
What is the application for registration of public offering of shares of a joint stock company in Vietnam?
Article 18 of the 2019 Law on Securities in Vietnam stipulates that the application for registration of a public offering is as follows:
Application for registration of public offering
1. An application for registration of public offering consists of:
a) The application form;
b) The prospectus;
c) The issuer’s charter;
d) The decision of the General Meeting of Shareholders to ratify the plan for issuance and the plan for use of capital generated by the offering, and the commitment to have the shares listed or registered on the securities trading system;
dd) The commitment to comply with the regulations in Point d and Point e Clause 1 Article 15 of this Law;
e) The major shareholders’ written commitment to hold at least 20% of the company’s charter capital for at least 01 year from the end of the offering;
g) The contract with a securities company for public offering consulting;
h) A bank’s or FBB’s confirmation on opening of an escrow account to receive payments for the offered shares;
i) The public offering underwriting agreement (if any).
2. An application for follow-on offering consists of:
a) The application form;
b) The documents specified in Points b, c, d, g, h and i Clause 1 of this Article and the written commitment mentioned in Point e Clause 1 Article 15 of this Law;
c) A competent authority’s decision to approve the project and the plan for making up for shortage of capital in the event mentioned in Point d Clause 2 Article 15 of this Law;
d) The statement on use of capital generated by the latest offering which must be audited within 02 years from the date of application, unless the audited statement has detailed descriptions of the use of capital generated by the latest offering.
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Thus, an application for registration of public offering consists of:
- The application form;
- The prospectus;
- The issuer’s charter;
- The decision of the General Meeting of Shareholders to ratify the plan for issuance and the plan for use of capital generated by the offering, and the commitment to have the shares listed or registered on the securities trading system;
- The commitment to comply with the regulations in Point d and Point e Clause 1 Article 15 of this Law;
- The major shareholders’ written commitment to hold at least 20% of the company’s charter capital for at least 01 year from the end of the offering;
- The contract with a securities company for public offering consulting;
- A bank’s or FBB’s confirmation on opening of an escrow account to receive payments for the offered shares;
- The public offering underwriting agreement (if any).
What are the requirement of a joint stock company in Vietnam for offering its shares publicly? At which agency do I register for a public offering in Vietnam? (Image from the Internet)
At which agency do I register for a public offering in Vietnam?
In Article 16 of the 2019 Law on Securities in Vietnam on public offering registration as follows:
Public offering registration
1. Before a public offering, issuers and shareholders of public companies shall register with the State Securities Commission, except for the cases specified in Clause 2 of this Article.
2. Public offering registration is not required in the following cases:
a) Offering of debt instruments of the Government, Government-backed bonds issued by policy banks, and municipal bonds;
b) Offering of bonds issued by international financial institutions approved by Vietnam’s Government;
c) Public offering to convert state-owned enterprises, wholly state-owned single-member limited liability companies, public service agencies into joint-stock companies;
d) Sale of securities under an effective court judgment or decision or under an arbitral decision; sale of securities of the asset manager or recipient in case of bankruptcy or insolvency.
Thus, before a public offering, issuers and shareholders of public companies shall register with the State Securities Commission.
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