Regulations for founding shareholders of joint stock non-bank credit institutions in Vietnam

Regulations for founding shareholders of joint stock non-bank credit institutions in Vietnam

(1) A founding shareholder must be the one who does not join any other credit institution duly established and operating in Vietnam as a strategic shareholder, founding shareholder, owner or founding member.

(2) Founding shareholders are not allowed to use their funds raised or borrowed from other entities to make capital contribution.

(3) In addition to the provisions of (1) and (2), a founding shareholder who is an individual must:

- Hold the Vietnamese citizenship;

- Not be prohibited from establishment of enterprises as provided for in the Law on enterprises and the Law on officials.

(4) In addition to the provisions of (1) and (2), a founding shareholder who is an organization must:

- Be established in accordance to the law of Vietnam;

- Have a profitable business in the last 03 fiscal years preceding the year in which the application is submitted and up to the date of submission of additional documents to the application;

- Have fulfilled its tax and social insurance obligations in accordance with regulations of law up to the date of application submission;

- A Vietnamese enterprise (except for Vietnamese commercial banks) must also:

(i) maintain the owner's equity of at least VND 500 billion and total assets of at least VND 1.000 billion in the last 03 fiscal years preceding the year in which the application is submitted. If the enterprise’s business line is subject to legal capital requirements, it must ensure that the difference between the owner's equity, as recorded in the audited financial statements of the fiscal year preceding the year in which the application is submitted, and the legal capital shall not be smaller than the capital amount to be contributed as promised;

(ii) If an enterprise is licensed to operate in securities and insurance sectors, it must comply with capital contribution requirements laid down in relevant laws;

- A Vietnamese commercial bank must also:

(i) have total assets of at least VND 100.000 billion, have fully complied with regulations on risk management, and have maintained minimum provision for losses as required at the time of the application submission and up to the date of submission of additional documents to the application;

(ii) have not violated SBV’s regulations on limits and prudential ratios in the year preceding the year in which the application is submitted and up to the date of submission of additional documents to the application;

(iii) maintain the minimum capital adequacy ratio upon completion of capital contribution to the non-bank credit institution;

(iv) have not incurred any penalties for administrative violations in monetary and banking sector in the last 02 years preceding the year in which the application is submitted and up to the date of submission of additional documents to the application.

Circular 05/2023/TT-NHNN takes effect from August 6, 2023.

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