Application for approval for conversion of business types of credit institutions in Vietnam

Application for approval for conversion of business types of credit institutions in Vietnam (Internet image)

Regarding this issue, LawNet responded as follows:

1. Conditions for conversion of business types of credit institutions in Vietnam

According to Article 17 of Circular 36/2015/TT-NHNN, the conditions for conversion of business types are prescribed as follows:

(1) The converting credit institution must have a project for conversion of business type prescribed in Article 19 of Circular 36/2015/TT-NHNN and it is ratified by its competent body.

(2) If a credit institution having its business type converted from a limited liability company into a joint-stock company, it must satisfy fully the following conditions:

- The condition prescribed in Clause 1 of Article 17 of Circular 36/2015/TT-NHNN;

- The converting credit institution must satisfy the conditions for stock offer as prescribed in law on securities and relevant laws;

- Founding shareholders (if any), major shareholders and/or strategic shareholders of the converted credit institution must satisfy the conditions prescribed in law on founding shareholders of a newly established credit institution.

- Shareholders and/or strategic shareholders being foreign investors of the converted credit institution must satisfy the conditions prescribed in law on foreign investors buying shares of Vietnamese credit institutions;

- Each organization or individual buying shares must comply with law on share ownership rates.

(3) If a credit institution having its business type converted from a single-member limited liability company into a multi-member limited liability company and vice versa, from a joint-stock company into a limited liability company, it must satisfy fully the following conditions:

- The condition prescribed in Clause 1 of this Article;

- Owners, capital contributors receiving transfer of stakes and/or new capital contributors of the converted credit institution must satisfy the conditions prescribed in law on owners and founding members of a newly established credit institution;

- Owners, capital contributors receiving transfer of stakes and/or new capital contributors of the converted credit institution must comply with regulations of law on stake rates.

2.  Application for approval for conversion of business types of credit institutions in Vietnam

Specifically, in Clause 2, Article 18 of Circular 36/2015/TT-NHNN, the application for approval for conversion of business types include:

(1) A written document of legal representative of the credit institution requesting for:

(i) Approval for conversion of business type; recognition of charter registration;

(ii) Approval for other contents (if any);

(2) An application for approval by the State bank prescribed in Point a (ii) of this Clause as prescribed by the State bank and relevant laws;

(3) A charter of the converted credit institution which is ratified by its competent body;

(4) Minutes, resolutions or decisions of the competent body of the converting credit institution that approve the modification to the project for conversion of business type and other issues related to conversion of business type (if any);

(5) A written document of the legal representative of the converting credit institution clarifying the contents of modification in comparison with the project for conversion of business type requesting to the Governor of the State bank to approve the rules of conversion of business type (if any);

(6) Minutes, resolutions or decisions of the competent body of converted credit institution that approve the charter; election and appointment of positions, members of the Board of Directors, Member assembly or the Control Board; regulations on organization and operation of Board of Directors, Member assembly or the Control Board of the converted credit institution and other issues related to the converted credit institution;

(7) Meeting minutes of Board of Directors or Member assembly of the converted credit institution in terms of election of the President of Board of Directors or the President of Member assembly; meeting minutes of the Control Board of the converted credit institution in terms of election of the Chief of the Control Board; decisions of owners of the converted credit institution in terms of appointment of the President, members of Member assembly and/or the Control Board;

(8) Decisions of Board of Directors or Member assembly of the converted credit institution in terms of appointment of General Director (Director), Deputy General Director (Deputy Director) and Chief Accountant;

(9) List, contribution rate of capital contributors, founding shareholders, major shareholders, strategic shareholders and/or shareholders being foreign investors of the converted credit institution;

(10) Internal regulations on organization and operation of the converted credit institution in accordance with Point g Clause 1 of this Article that are approved by competent body, ratified by Board of Directors or Member assembly of the converted credit institution;

(11) Apart from the documents prescribed in (1), (2), (3), (4), (5), (6), (7), (8), (9), (10), a credit institution converted from a limited liability company into a joint-stock company must submit the following additional documents:

(i) A report on results of stock offering and a certification of revenues earned from the offering issued by a commercial bank where its escrow account is opened;

(ii) Documents of founding shareholders (if any), major shareholders and/or strategic shareholders of the converted credit institution similar to documents of a founding shareholder of a credit institution as prescribed in regulations on issuance of organization and operation licenses to credit institutions issued by the State Bank.

(iii) Documents of shareholders and/or strategic shareholders being foreign investors of the converted credit institution in accordance with regulations of the State Bank on documents and procedures for approval for foreign investors buying shares of Vietnamese credit institutions;

(12) Apart from the documents prescribed in (1), (2), (3), (4), (5), (6), (7), (8), (9), (10), a credit institution converted from a single-member limited liability company into a multi-member limited liability company and vice versa, or a credit institution converted from a joint-stock company into a limited liability company must submit the following additional documents:

(i) Stake transfer contract or an agreement on investment contribution or documents certifying the completion of capital transfer;

(ii) A document of legal representative of the converting credit institution certifying the status of capital contributor of the converted credit institution;

(iii) Documents of owners, capital contributors receiving transfer of stakes and/or new capital contributors of the converted credit institution similar to documents of an owner or a founding member of a credit institution as prescribed in regulations on issuance of organization and operation licenses to credit institutions issued by the State Bank.

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