Is a private enterprise in Vietnam allowed to issue stocks?

Is a private enterprise in Vietnam allowed to issue stocks?

Article 188 of the Law on Enterprises 2020 provides for private enterprises as follows:

1. A sole proprietorship is an enterprise owned by a single individual whose liability for its entire operation is equal to his/her total assets.

2. A sole proprietorship must not issue any kind of securities.

3. An individual may only establish one sole proprietorship. The owner of a sole proprietorship must not concurrently own a household business or hold the position of general partner of a partnership.

4. A sole proprietorship must not contribute capital upon establishment  or purchase shares or stakes of partnerships, limited liability companies or joint stock companies.

Clause 1 Article 4 of the Securities Law 2019 provides as follows:

1. “securities” include the following assets:

a) Shares, bonds, fund certificates;

b) Warrants, secured warrants, pull options, depository receipts;

c) Derivatives;

d) Other kinds of securities defined by the Government.

Pursuant to the current regulations, private enterprises are not allowed to issue shares in Vietnam.

Can a private business owner in Vietnam hire a director to manage?

In Article 190 of the Law on Enterprises 2020, there are provisions on management of private enterprises as follows:

1. The sole proprietorship’s owner has total authority to decide all of its business activities, use of post-tax profit and fulfillment of other financial obligations as prescribed by law.

2. The owner may directly or hire another person to hold the position of Director/General Director. In case of an hired Director/General Director, the owner is still responsible for every business activity of the enterprise.

3. The sole proprietorship’s owner is its legal representative who will represent it during civil proceedings, as the plaintiff, defendant or person with relevant interests and duties before the court and arbitral tribunals, and in performance of other rights and obligations prescribed by law.

Pursuant to the current regulations, the owner of a private enterprise may hire another person as a director to manage and administer business activities in Vietnam.

Best Regards!