What are the Procedures for applying for Establishment and Operation License of insurance companies in Vietnam?
Vietnam: How many business types of insurance companies and reinsurance companies are there?
Pursuant to Article 62 of the Law on Insurance Business 2022, it is stipulated as follows:
Business types of insurance companies and reinsurance companies
1. Joint-stock company.
2. Limited liability company.
Accordingly, there will be two business types of insurance companies and reinsurance companies: Joint-stock company and Limited liability company.
What are the Procedures for applying for Establishment and Operation License of insurance companies in Vietnam?
What are the general licensing conditions applicable to insurance companies in Vietnam?
Pursuant to the provisions of Article 64 of the Law on Insurance Business 2022, it is stipulated as follows:
General licensing conditions applicable to insurance companies and reinsurance companies
1. Licensing conditions concerning founding shareholders or members:
a) In order to obtain business licences or permits, entities and persons applying for these licenses or permits must have the rights of business incorporation and management in Vietnam under the Corporate Law;
b) In order to obtain business licences or permits, entities applying for these licenses or permits need to have legal personality and is operating in Vietnam; if each entity makes at least 10% of capital contribution, they must ensure that they generate profits within 03 consecutive fiscal years immediately before the date of submission of application packages for these licenses or permits, and must meet financial conditions in accordance with the Government’s regulations;
c) In order to obtain business licences or permits, insurers and reinsurers previously licensed for their establishment and operation in Vietnam that contribute capital to set up insurance companies; new reinsurers must generate business profits during 03 consecutive years immediately before the date of submission of application packages for these licenses and permits, and must meet the prudential ratio or the minimum required capital requirement specified herein.
2. Licensing conditions concerning capital or assets:
a) The amount of Vietnamese-dong contribution to the charter capital must not be less than the minimum required amount of charter capital under the Government’s regulations;
b) Founding shareholders and capital-contributing members shall not be allowed to contribute borrowed funds or funds or assets held in trust for other entities and persons for equity participation purposes.
3. Licensing conditions concerning personnel: Any nominee for a Chairperson of the Board of Directors or Chairperson of the Board of Members, Director or General Director, legal representative or actuary in an entity applying for such business licence and permit must meet managerial competency and qualification conditions and standards prescribed in Article 81 herein.
4. The applicant for such business licence and permit must choose their business type in accordance with this Law and must have the draft charter conforming to the regulations of the Corporate Law.
According to the above regulations, insurance enterprises are granted a license to establish and operate when they meet the above general conditions.
What are the Procedures for applying for Establishment and Operation License of insurance companies in Vietnam?
Pursuant to Article 16 of Decree 46/2023/ND-CP stipulates as follows:
Procedures for applying for Establishment and Operation License
1. An application for Establishment and Operation Licenses shall be prepared as per this Decree; and submitted in person at the Ministry of Finance, or sent by post, or through the online public service system if eligible.
2. Within 30 days of receiving an incomplete or invalid application, the Ministry of Finance shall notify the applicant in writing to supplement or revise the application. The time limit for supplementation or revision of the investor’s application is 6 months from the date of notification. In case the investor fails to supplement or revise the application within the prescribed time limit, the Ministry of Finance will deny the application.
The time limit for the applicant to supplement or revise their application is 12 months from the date of the first notication by the Ministry of Finance. If the applicant fails to complete the application within the specified time limit, the Ministry of Finance has the discretion to deny the application.
3. Within 60 days of receiving a complete or valid application, the Ministry of Finance shall grant an Establishment and Operation License to the insurer, reinsurer, or foreign branch in Vietnam according to the Appendix II hereto appended. If the application is rejected, the Ministry of Finance shall provide an explanation in writing. The Ministry of Finance may only deny the application if the capital contributor or the insurer, reinsurer, or foreign branch to be established in Vietnam does not fully satisfy the requirements and/or application as prescribed in this Decree, or the documents therein are forged or falsified as specified in Clause 3, Article 15 of this Decree.
Accordingly, the Procedures for applying for Establishment and Operation License of insurance companies are as follows:
Step 1: An application for Establishment and Operation Licenses shall be prepared as per this Decree; and submitted in person at the Ministry of Finance, or sent by post, or through the online public service system if eligible.
Step 2: Within 30 days of receiving an incomplete or invalid application, the Ministry of Finance shall notify the applicant in writing to supplement or revise the application.
The time limit for supplementation or revision of the investor’s application is 6 months from the date of notification. In case the investor fails to supplement or revise the application within the prescribed time limit, the Ministry of Finance will deny the application.
The time limit for the applicant to supplement or revise their application is 12 months from the date of the first notication by the Ministry of Finance. If the applicant fails to complete the application within the specified time limit, the Ministry of Finance has the discretion to deny the application.
Step 3: Within 60 days of receiving a complete or valid application, the Ministry of Finance shall grant an Establishment and Operation License to the insurer, reinsurer, or foreign branch in Vietnam according to the Appendix II of Decree 46/2023/ND-CP.
If the application is rejected, the Ministry of Finance shall provide an explanation in writing. The Ministry of Finance may only deny the application if the capital contributor or the insurer, reinsurer, or foreign branch to be established in Vietnam does not fully satisfy the requirements and/or application as prescribed in this Decree, or the documents therein are forged or falsified as specified in Clause 3, Article 15 of Decree 46/2023/ND-CP.
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