Regulations on related persons in Vietnam under the Law on Credit Institutions 2024

Regulations on related persons in Vietnam under the Law on Credit Institutions 2024 (Internet image)

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Regulations on related persons in Vietnam under the Law on Credit Institutions 2024

Pursuant to Clause 24, Article 4 of the Law on Credit Institutions 2024, related person means an organization or individual that has a direct or indirect relation with another organization or individual in any of the following cases:

(1) Parent company with subsidiary and vice versa; parent company with sub-subsidiary and vice versa; credit institution with its subsidiary and vice versa; credit institution with its sub-subsidiary and vice versa; among subsidiaries of a parent company or credit institution; among sub-subsidiaries of a subsidiary of a parent company or credit institution; managers, controllers or members of the Board of Controllers of a parent company or credit institution, and individual or organization competent to appoint these persons with a subsidiary and vice versa;

(2) Company or credit institution with its managers, controllers or members of the Board of Controllers, or with company or organization competent to appoint these persons and vice versa;

(3) Company or credit institution with organization or individual that owns 5% or more of the charter capital or voting share capital of that company or credit institution and vice versa;

(4) Individual with his/her spouse; natural father/mother, foster father/mother, stepfather, stepmother, father-in-law, mother-in-law; natural/foster child, stepchild, daughter-in-law, son-in-law; sibling; half-sibling; brother/sister-in-law of the sibling or half-sibling (hereinafter referred to as “spouse, father, mother, child or sibling”); maternal grandfather/grandmother, paternal grandfather/grandmother; maternal/paternal grandchild; and maternal/paternal aunt, uncle and nibbling;

(5) Company or credit institution with individual defined at (4), with manager, controller, member of the Board of Controllers, capital contributor or shareholder owning 5% or more of the charter capital or voting share capital of that company or credit institution and vice versa;

(6) Individual authorized to act as a representative of an organization or individual's stake with authorizing organization or individual; individuals authorized to act as representatives of stakes of an institution;.

(7) Other juridical persons and individuals that pose risks to the operation of the credit institution or foreign bank’s branch, defined according to the rules and regulations of the credit institution or foreign bank’s branch or specified in writing by the State Bank of Vietnam through inspection or supervision;

(8) Regarding a people's credit fund, a person related to a client of the fund falls within one of the cases specified in (2), (3), (5) and (7); client with his/her spouse, father, mother, child or sibling.

More details can be found in Law on Credit Institutions 2024, taking effect on July 1, 2024, except for Clause 3, Article 200 and Clause 15, Article 210 of the Law on Credit Institutions 2024, which takes effect on January 1, 2025.

The Law on Credit Institutions 2010 (amended in 2017) expires from the date the Law on Credit Institutions 2024 takes effect, except for the provisions in Clauses 1, 2, 3, 4 , 8, 9, 12 and 14 of Article 210 of the Law on Credit Institutions 2024.

Ho Quoc Tuan

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