Vietnam: Criteria of the valuation organization for assessing the value of private investment companies

According to Article 21 of Circular No. 227/2012/TT-BTC of the Ministry of Finance of Vietnam, the activities of investment companies must comply with Clause 1 Article 89 of Decree No. 58/2012/ND-CP of Vietnam’s Government. When making investments in real estate, the investment company must appoint an independent valuation organization. The independent valuation organization must:

- Be a valuation enterprise as prescribed by laws on valuation, or a real estate trader licensed to valuate real estate as prescribed by laws on real estate trading.

- Not be a person related to the asset management company or supervisory bank; not be a person related to the partners in the transactions of the real estate being valuated;

- Have at least 03 employees that have the valuer's certificate or real estate valuer's certificate. These employees must have at least 05 years of experience of real estate valuation.

Moreover, if the prospectus of the investment company allows, the investment company may take loans from the depository bank or supervisory bank in the following manners:

- Taking loans to buy securities on margin up to the line of credit passed by the General meeting of shareholders;

- Running up an overdraft loans up to the limit passed by the General meeting of shareholders;

- Taking loans or giving loans of securities if permitted by law;

- The sales that guarantee to repurchase securities.

Note: The investment company must ensure that the total debts and amounts payable do not exceed 30% of the total asset value of the investment company at the time of taking loans.

View more details at Circular No. 227/2012/TT-BTC of the Ministry of Finance of Vietnam, effective from July 01, 2013.

Le Vy

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE