What are regulations on legal capital of life insurance enterprises in Vietnam? What are requirements for establishment of insurance enterprises organized as a limited liability business in Vietnam?

What are requirements for establishment of insurance enterprises organized as a limited liability business in Vietnam?

Pursuant to Clause 1 Article 7 of the Decree 73/2016/NĐ-CP (amended by Article 11 of the Decree 151/2018/NĐ-CP) stipulating requirements for establishment of insurance enterprises organized as a limited liability business in Vietnam as follows:

Apart from general requirements defined in Article 6 of this Decree, founding investors of an insurance enterprise organized as a limited liability business must be organizations that meet the following requirements:

a) Foreign organizations:

- Trade in insurance abroad and have been permitted by foreign competent authorities to conduct expected business lines in Vietnam, or act as an outward investing subsidiary of a foreign insurance enterprise and have been mandated by the foreign insurance enterprise to invest in the incorporation of an insurance enterprise in Vietnam.

- Have operated for at least 7 years in the sector of business in which they intend to engage in Vietnam;

- Have total worth of assets of at least 02 billion US dollars in the year immediately preceding the year that the application for licensing is submitted;

- Have not seriously violated any laws on insurance business of the home country for 03 consecutive years immediately preceding the year in which the application for licensing is submitted.

b) Vietnamese organizations:

- Trade in finance, banking or insurance;

- Have total worth of assets of at least 2,000 billion Vietnam dongs in the year immediately preceding the year that the application for licensing is submitted.

Pursuant to Clause 1 Article 6 of the Decree 73/2016/NĐ-CP (amended by Article 11 of the Decree 151/2018/NĐ-CP) stipulating as follows:

b) Investors must actualize their capital contributions in cash, which must not be financed by a loan or investment trust from other entities;

c) Corporate investors contributing to 10% or more of the charter capital are required to have conducted a profitable business in 03 consecutive years immediately preceding the year that the application for licensing is submitted and to have not incurred cumulative losses prior to the application for licensing.

d) Corporate investors conducting business lines that require a legal capital must undertake that their owner’s equity less the minimum legal capital is at least equal to the planned amount of investment;

dd) If a corporate investor is an insurance enterprise, insurance broker enterprise, commercial bank, financial enterprise or securities enterprise, it must fulfill and maintain financial safety conditions and obtain permission by competent authorities to make the said investments as per specialized laws.

What are regulations on legal capital of life insurance enterprises in Vietnam?

Pursuant to Clause 2 Article 10 of the Decree 73/2016/NĐ-CP stipulating legal capital of life insurance enterprises in Vietnam as follows:

2. Legal capital of life insurance enterprises:

a) Provision of life insurance (except unit-linked insurance and retirement insurance) and health insurance: 600 billion Vietnam dongs;

b) Provision of insurance according to Point a of this Section and unit-linked insurance or retirement insurance: 800 billion Vietnam dongs;

b) Provision of insurance according to Point a of this Section, unit-linked insurance and retirement insurance: 1,000 billion Vietnam dongs;

Depending on type of isurance that the enterprise provides, legal capital shall be 600, 800, and 1,000 billion Vietnam dongs.

Best regards!