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Vietnam: Conditions for IPO for conversion of a limited liability company into a joint-stock company

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15:07, 14/02/2021

Recently, the Government of Vietnam issued Decree 155/2020/ND-CP guidelines Law on Securities 2019 , which stipulates the conditions for the initial public offering of shares to convert a limited company into a joint stock company, which stipulates the conditions for IPO for conversion of a limited liability company into a joint-stock company.

According to Article 15 of Vietnam's Decree 155/2020/ND-CP, the conditions for IPO for conversion of a limited liability company into a joint-stock company include:

There is a plan for conversion of a limited liability company into a joint-stock company which is approved by the Board of Members or the owner of the company.
There is an issuance plan approved by the Board of Members or the owner of the company; there is a plan for use of revenue generated by the offering (unless shares are offered in the manners specified in Point b Clause 1 Article 10 of this Decree) which is approved by the Board of Members or the owner of the company.
The contributing members of the owner of the company has an agreement to together hold at least 20% of charter capital of the issuing organization for at least 01 year from the end of the offering.
The foreign ownership ratio in the public company is conformable with law.
There is an agreement between the members whose stakes are offered and the issuing organization on the issuing plan and offer price if case members’ stakes are offered.

In addition, the conditions specified in Vietnam's Law on Securities must also be satisfied.

More details can be found in Vietnam's Decree 155/2020/ND-CP, effective from January 1, 2021.

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