Cases where public offering registration is not required in Vietnam

Cases where public offering registration is not required in Vietnam (Internet image) 

Regarding this issue, LawNet would like to answer as follows:

1. Cases where public offering registration is not required in Vietnam

According to Clause 2, Article 16 of the Law on Securities 2019, public offering registration is not required  in the following cases:

- Offering of debt instruments of the Government, Government-backed bonds issued by policy banks, and municipal bonds;

- Offering of bonds issued by international financial institutions approved by Vietnam’s Government;

- Public offering to convert state-owned enterprises, wholly state-owned single-member limited liability companies, public service agencies into joint-stock companies;

- Sale of securities under an effective court judgment or decision or under an arbitral decision; sale of securities of the asset manager or recipient in case of bankruptcy or insolvency.

2. Requirements for public offering in Vietnam

Requirements for public offering in Vietnam under Article 15 of the Law on Securities 2019 are as follows:

-  A joint-stock company (the issuer) shall satisfy the following requirements to offer its shares publicly:

+ The contributed charter capital is at least 30 billion VND on the offering date according to the accounting books;

+ The company has profit over the last 02 years and has no accumulated loss on the offering date;

+ There is a plan for issuance and use of capital generated by the offering ratified by the General Meeting of Shareholders;

+ At least 15% of its voting shares have been sold to at least 100 non-major shareholders. If the issuer’s charter capital is 1.000 billion VND or above, the ratio shall be 10%.

+ Before the offering date, the major shareholders have made a commitment to hold at least 20% of the issuer’s charter capital for at least 01 year from the end of the offering;

+ The issuer is not undergoing criminal prosecution and does not have any unspent conviction for economic crimes;

+ The offering is consulted by a securities company, unless the issuer is already a securities company;

+ The issuer has a commitment to have its shares listed or registered on the securities trading system after the end of the offering;

+ The issuer has an escrow account to receive payments for the offered shares.

- In order to make follow-on offering, a public company (the issuer) shall satisfy the following requirements:

+ The requirements specified in Points a, c, e, g, h and i Clause 1 of this Article;

+ The company has profit in the preceding year and has no accumulated loss on the offering date;

+ The value of the new shares does not exceed the total value of shares outstanding at their face value, unless there is a commitment to buy all of the shares of the issuer for reselling or to buy all of the unsold shares of the issuer, shares issued to raise more capital from equity, shares issued for swapping, consolidation or acquisition of enterprises;

+ If the public offering is meant to raise capital to execute a project of the issuer, at least 70% of the offered shares must be sold to the investors. The issuer shall have a plan to make up for the shortage in case the capital generated by the offering is inadequate.

- In order to make a public offering of bonds, an enterprise (the issuer) shall satisfy the following requirements:

+ The contributed charter capital is at least 30 billion VND on the offering date according to the accounting books;

+ The issuer has profit in the preceding year and has no accumulated loss on the offering date; there is no debt that is overdue for more than 01 year;

+ There is a plan for issuance, use and repayment of the capital generated by the offering ratified by the General Meeting of Shareholders, Board of Directors, the Board of members or the company president;

+ The issuer has a commitment to fulfill its obligations to the investors in terms of conditions for issuance, payment, assurance of the lawful rights and interests of investors and other conditions;

+ The offering is consulted by a securities company, unless the issuer is already a securities company;

+ All of the requirements specified in Point e Clause 1 of this Article are satisfied;

+ The issuer has a credit rating if required by the Government;

+ The issuer has an escrow account to receive payments for the offered bonds;

+ The issuer has a commitment to have its shares listed on the securities trading system after the end of the offering.

- Requirements for public offering of convertible bonds are the same as those specified in Clause 2 and Point d Clause 3 of this Article.

- Requirements for initial public offering of fund certificates:

+ The total value of the offered fund certificates is 50 billion VND;

+ There is a plan for issuance and use of capital generated by the offering as prescribed by this Law;

+ The offering is supervised by a supervisory bank as prescribed by this Law;

+ The publicly offered fund certificates are listed on the securities trading system after the end of the offering, except open-end fund certificates.

- The Government shall specify the requirements and the application for public offering to convert state-owned enterprises, wholly state-owned single-member limited liability companies, public service agencies into joint-stock companies;

Offering of shares at lower prices than face values; public offering by shareholders of public companies, strictly controlled credit institutions; overseas offering and other cases of offering and issuance.

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