What are the conditions for overseas offering of bonds by public companies in Vietnam?

Hello, Lawnet would like to answer as follows:

1. What is public company?

According to Clause 1 of Article 32 of the Law on Securities 2019, a joint-stock company will become a public company in one of the following cases:

- The company has a contributed charter capital of at least 30 billion VND and at least 10% of the voting shares are being held by at least 100 non-major shareholders;

- The company has successfully made its IPO by registration with SSC as prescribed in Clause 1 Article 16 of the Law on Securities 2019.

2. What are the conditions for overseas offering of bonds by public companies in Vietnam?

Under the provisions of Article 71 of Decree 155/2020/ND-CP, the conditions for overseas offering of bonds by public companies in Vietnam as follows:

- A public company may offer bonds overseas after SSC approves under the conditions specified in Clause 2 of Article 71 of Decree 155/2020/ND-CP and regulations of the host country are complied with.

- Conditions for approving overseas offering of bonds:

+ The bond issuance satisfies regulations of law on foreign ownership ratio.

+ There is the GMS’s decision to approve the offering plan and the plan for use of revenue obtained from the offering;

+ Regulations of law on foreign exchange management are complied with;

+ SBV has permitted the overseas issuance of bonds in accordance with regulations of law on credit institutions in case the issuer is a credit institution; The Ministry of Finance has permitted the overseas issuance of bonds in accordance with regulations of law on insurance business in case the issuer is an insurer.

Thus, conditions for approving overseas offerings of bonds that Vietnamese enterprises have to meet are:

- Being approved by the State Securities Commission to register for sale;

- Meeting regulations on the maximum foreign ownership ratio;

- There is a decision of the General Meeting of Shareholders through the plan of offering and using capital;

- Complying with regulations on foreign exchange management...

3. Application for overseas offering of bonds in Vietnam

According to Article 72 of Decree 155/2020/ND-CP, application for overseas offering of bonds in Vietnam as follows:

- The application for overseas offering of bonds following Form No. 19 in the Appendix of Decree 155/2020/ND-CP: Download 

- The decision of the GMS to approve the bond offering plan and the plan for use of revenue obtained from the offering; approve or authorized the Board of Directors to approve the plan for ensuring conformable foreign ownership ratio.

- The written confirmation of a permitted bank or FBB that the issuer has opened an escrow account to receive payment for bonds in foreign currencies as prescribed by regulations of law on foreign exchange management.

- The written approval from SBV for overseas issuance of bonds in accordance with regulations of law on credit institutions in case the issuer is a credit institution; the written approval from the Ministry of Finance for overseas issuance of bonds in accordance with regulations of law on insurance business in case the issuer is an insurer.

- The draft documents for offering registration with the competent authority of the host country or opinions of an international legal counseling company that the offering does not have to be registered with a competent authority of the host country

Best regards!

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Key word: bonds | overseas offering of bonds | offering of bonds | in Vietnam | public companies | Vietnam |

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