Requirements for share repurchase by a public company in Vietnam

According to Article 36 of the Law on Securities 2019 of Vietnam, in order to repurchase its own shares, a public company shall satisfy the following requirements:

- There is a decision of the General Meeting of Shareholders to approve the share repurchase to reduce its charter capital and a repurchase plan which specifies the repurchase quantity, time and price;

- The company has sufficient funds to repurchase its shares from the following sources: share premium, development investment funds, undistributed post-tax profits, other equity funds used for charter capital increase as prescribed by law;

- A securities company is assigned to carry out the transaction, unless the repurchasing company is a member of Vietnam Stock Exchange (VSE);

- All conditions are satisfied if the public company has conditional business lines;

- It is not the following cases:

+ The company has overdue debts according to the latest audited annual financial statement. In case the expected repurchase date is later than 06 months from the end of the fiscal year, overdue debts will be identified according to the latest audited or examined biannual financial statement;

+ Shares are being offered or issued to raise additional capital;

+ The company’s shares are being offered in a tender offer;

+ There was a share repurchase or an additional share issuance to increase capital over the last 06 months.

View more details at the Law on Securities 2019 of Vietnam, effective from January 01, 2021.

Ty Na

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