What is the holding of foreign strategic investors in Vietnamese credit institutions?
What is a foreign strategic investor?
Pursuant to Clause 6, Article 3 of Decree No. 01/2014/ND-CP on foreign strategic investors as follows:
Interpretation of terms
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6. Foreign strategic investor means a foreign organization which has financial capacity and has a written commitment of competent person to bind its long-term benefit with Vietnamese credit institutions and support Vietnamese credit institutions in transferring modern technologies; developing banking products and services, raising the administration and financial capacity.
Thus, a foreign investor is an organization legally established under foreign law that commits to long-term investment in a Vietnamese credit institution. This organization must support Vietnamese credit institutions in transferring modern technologies; developing banking products and services, raising the administration and financial capacity.
What is the holding of foreign strategic investors in Vietnamese credit institutions? (Image from the Internet)
Regulations on conditions for foreign organizations to purchase shares and become foreign strategic investors in Vietnam?
In Article 10 of Decree No. 01/2014/ND-CP, the conditions for foreign organizations to purchase shares and become foreign strategic investors in Vietnam are as follows:
Conditions for foreign organizations to purchase shares and become foreign strategic investors
1. Conditions specified at Clauses 1, 2, 3, 4 Article 9 of this Decree.
2. Being foreign banks, foreign financial companies, foreign finance-leasing companies which are allowed to perform the banking activities as prescribed by law of countries where they are headquartered. Foreign financial companies are only allowed to be the strategic investors at Vietnamese financial companies. Foreign financial companies are only allowed to be the strategic investors at Vietnamese finance-leasing companies.
3. Having experiences in international operation of banking and finance from 5 years or longer.
4. Having minimum total assets of 20 billion U.S Dollar in the year preceding the year of submission of dossier of share purchase.
5. Having written commitment and clear plan on binding long-term benefit with Vietnamese credit institutions and support Vietnamese credit institutions in applying modern technologies; developing banking products and services, raising the administration and financial capacity.
6. Not owning 10% or more of charter capital at any other credit institution in Vietnam;
7. Committing or having owned 10% or more of charter capital of Vietnamese credit institutions where foreign organizations request for purchasing shares and becoming the foreign strategic investor.
Thus, a foreign organization that purchases shares and becomes foreign strategic investors needs to ensure the following conditions:
+ Conditions specified at Clauses 1, 2, 3, 4 Article 9 of this Decree.
+ Being foreign banks, foreign financial companies, foreign finance-leasing companies which are allowed to perform the banking activities as prescribed by law of countries where they are headquartered. Foreign financial companies are only allowed to be the strategic investors at Vietnamese financial companies. Foreign financial companies are only allowed to be the strategic investors at Vietnamese finance-leasing companies.
+ Having experiences in international operation of banking and finance from 5 years or longer.
+ Having minimum total assets of 20 billion U.S Dollar in the year preceding the year of submission of dossier of share purchase.
+ Having written commitment and clear plan on binding long-term benefit with Vietnamese credit institutions and supporting Vietnamese credit institutions in applying modern technologies; developing banking products and services, raising the administration and financial capacity.
+ Not owning 10% or more of charter capital at any other credit institution in Vietnam;
+ Committing or having owned 10% or more of charter capital of Vietnamese credit institutions where foreign organizations request for purchasing shares and becoming the foreign strategic investor.
What is the maximum holding of foreign strategic investors in Vietnamese credit institutions?
Pursuant to the provisions of Clause 3, Article 7 of Decree No. 01/2014/ND-CP on holdings of foreign investors as follows:
Holdings of foreign investors
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3. The holding of a foreign strategic investor shall not exceed 20% of charter capital of a Vietnamese credit institution.
Thus, the holding of a foreign strategic investor in Vietnamese credit institutions is a maximum of 20%.
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