What is duration for joint-stock companies to submit application for public company registration in Vietnam?

What is duration for joint-stock companies to submit application for public company registration in Vietnam? 

Article 32 of the Law on Securities 2019 stipulates that public companies are as follows:

1. A joint-stock company will become a public company in one of the following cases:

a) 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;

b) The company has successfully made its IPO by registration with SSC as prescribed in Clause 1 Article 16 of this Law.

2. The joint-stock company mentioned in Point a Clause 1 of this Article shall submit the application for public company registration as prescribed in Clause 1 Article 33 of this Law to SSC within 90 days from the day on which the requirements specified in Point a Clause 1 of this Article are fully satisfied.

3. Within 15 days from the receipt of the valid application from the joint-stock company mentioned in Point a Clause 1 of this Article, or from the receipt of the report on completion of the offering prescribed in Point b Clause 1 of this Article, SSC shall confirm the registration of the public company, publish the company’s name, operations and other information on SSC’s media.

Thus, according to the above provisions in Vietnam, a joint stock company shall submit an application for public company registration within 90 days from the date on which the company completes the capital contribution and has a shareholder structure. 

If your joint-stock company is intending to submit an application for public company registration, please note whether your company falls into one of the two cases prescribed by the law in Vietnam. If you fall into one of these two cases, you have 90 days to file for public company registration.

How much is fine for late submission of application for public company registration in Vietnam? 

According to Article 13 of Decree 156/2020/ND-CP, violations against regulations on application for public company registration are as follows:

1. A warning shall be imposed for late submission of application for public company registration of up to 01 month.

2. A fine ranging from VND 5.000.000 to VND 10.000.000 shall be imposed for late submission of application for public company registration of exceeding 01 month to 03 months.

3. A fine ranging from VND 10.000.000 to VND 30.000.000 shall be imposed for late submission of application for public company registration of exceeding 03 months to 06 months.

4. A fine ranging from VND 50.000.000 to VND 70.000.000 shall be imposed for late submission of application for public company registration of exceeding 06 months to 12 months.

5. A fine ranging from VND 70.000.000 to VND 100.000.000 shall be imposed for committing one of the following violations:

a) Late submission of application for public company registration of exceeding 12 months to 24 months;

b) The application for public company registration contains inaccurate information about business operations, shareholders, assets, financial status and other issues.

6. A fine ranging from VND 100.000.000 to VND 150.000.000 shall be imposed for late submission of application for public company registration of exceeding 24 months to 36 months.

7. A fine ranging from VND 150.000.000 to VND 200.000.000 shall be imposed for late submission of application for public company registration of exceeding 36 months, or failing to submit the application for public company registration.

8. A fine ranging from VND 1.000.000.000 to VND 2.000.000.000 shall be imposed for forging documents or making certification on forged documents proving the public company’s satisfaction of eligibility requirements included in the application for public company registration.

9. Additional penalty:

The exhibits and instrumentalities of the violation in Clause 8 of this Article, which are forged documents, shall be confiscated.

10. Remedial measures:

a) The violating entity is compelled to provide accurate information in case of commission of the violation in Point b Clause 5 of this Article;

b) The violating entity is compelled to suspend procedures for public company registration in case of commission of the violation in Clause 8 of this Article.

Pursuant to Clause 3, Article 5 of Decree 156/2020/ND-CP as amended by Clause 4, Article 1 of Decree 128/2021/ND-CP stipulating fine levels:

3. Rules for determination of fines:

a) The maximum fine imposed upon an organization or individual for committing the violation prescribed in Clause 1 Article 35 or Clause 1 Article 36 of this Decree shall be respectively 10 times or 05 times the illegal gains or proceeds from the violation. Where no illegal gains or proceeds are obtained from the violation or the fine calculated according to the illegal gains or proceeds is smaller than the maximum fine specified in Point b of this Clause, the the maximum fine specified in Point b of this Clause shall be imposed;

b) The maximum fine for other securities-related violations shall be VND 3.000.000.000 if committed by an organization or VND 1.500.000.000 if committed by an individual;

c) The fines prescribed in Chapter II of this Decree are imposed upon violating organizations, except the cases in Clauses 3, 4 and 5 Article 15 and Clause 2 Article 30 of this Decree in which the fines are imposed upon individuals, and the cases in Clause 3 and Clause 5 Article 39 of this Decree in which both fines impose upon organizations and those impose upon individuals are specified. The fine imposed upon an individual shall be a half of the fine imposed upon an organization for committing the same violation.

Therefore, if your joint stock company submits the application for public company registration later than the time limit prescribed by law in Vietnam, it may be fined up to VND 200,000,000. The amount of the penalty will depend on how many months your company is late in paying.

What does application for public company registration in Vietnam comprise?

Pursuant to Article 33 of the Securities Law 2019, application for public company registration is as follows:

1. An application for public company registration consists of:

a) The application form;

b) The company’s charter;

c) The certificate of enterprise registration;

d) The information disclosure statement about the public company, including summary of the company’s organizational structure, business operations, management, shareholders, assets, financial status and other information;

dd) The latest annual financial statement audited by an independent audit organization. In case the company’s charter capital is increased after the end of the latest fiscal year, an audited financial statement of the latest period is required;

e) The list of shareholders.

2. The Minister of Finance shall promulgate the model information disclosure statement and provide for the application for public company registration after consolidation, merger or division.

An application for public company registration includes the above-mentioned documents in Vietnam.

Best Regards!