Conditions for establishing a branch in Vietnam of a foreign fund management company​

Conditions for establishing a branch in Vietnam of a foreign fund management company​ (Image from Internet)

1. Conditions for establishing a branch in Vietnam of a foreign fund management company

According to Clause 2, Article 76 of the Securities Law 2019, the conditions for establishing a branch in Vietnam of a foreign fund management company in Vietnam include:

- Authorized and approved by the regulatory and supervisory authority in the country of origin to manage public funds and establish a branch in Vietnam;

- The licensing authority of the country of origin and the State Securities Commission of Vietnam have signed a bilateral or multilateral cooperation agreement on information exchange, management cooperation, inspection, and supervision of securities and securities market activities; the remaining operational period (if any) is at least 05 years;

- Not being a shareholder, capital contributor, or owning more than 5% of the charter capital of a securities investment fund management company in Vietnam, either directly or indirectly through authorization, trust investment along with related persons;

- The capital allocated to the branch in Vietnam meets the provisions specified in Clause 1, Article 75 of the Securities Law 2019 as follows: Capital contribution to the charter capital of a securities investment fund management company must be in Vietnamese Dong; the minimum charter capital required to be granted a license for establishment and securities business operations of a securities investment fund management company in Vietnam as per the Government of Vietnam's regulations.

- Ensuring conditions of facilities and personnel as prescribed in Clauses 4 and 5, Article 75 of the Securities Law 2019 for the proposed branch in Vietnam as follows:

+ Conditions on facilities include:

++ Having an office that ensures the operation of the securities business;

++ Having adequate facilities, technical equipment, office equipment, and an appropriate technology system for securities business operations.

+ Conditions on personnel include:

Having a General Director (Director), at least 05 employees with a fund management practicing certificate, and at least 01 compliance control employee. The General Director (Director) must meet the following standards:

++ Not currently under criminal prosecution, serving a prison sentence, or being prohibited from practicing securities as per legal regulations;

++ Having at least 04 years of experience in the operational departments of organizations in the fields of finance, securities, banking, insurance, or financial, accounting, investment departments in other enterprises;

++ Holding a fund management practicing certificate or an equivalent certificate as per the Government of Vietnam's regulations;

++ Not being administratively sanctioned in the field of securities and securities market in the last 06 months from the time of filing the application.

In case there is a Deputy General Director (Deputy Director) in charge of operations, they must meet the standards specified in points a, b, and d of Clause 5, Article 75 of the Securities Law 2019 and hold a securities practicing certificate appropriate to their responsibilities.

- Complying with the provision in point c, Clause 2, Article 77 of the Securities Law 2019 as follows: Business activities have been profitable for the last 02 consecutive years before the year of participating in capital contribution, share purchase, or equity contribution, and the most recent annual financial statements must be audited with an unqualified opinion.

2. Regulations on enterprise registration, business registration for fund management company in Vietnam

The registration of enterprises, business registration for securities companies and foreign fund management companies is regulated in Article 71 of the Securities Law 2019 as follows:

- After being granted the License for establishment and securities business operations, the securities companies, securities investment fund management companies must register their enterprises according to the provisions of the Enterprise Law 2020, and the branches of foreign securities companies and securities investment fund management companies in Vietnam must register their business with the Business Registration Authority.

- Securities companies, securities investment fund management companies are organized in the form of limited liability companies or joint-stock companies as prescribed in the Enterprise Law 2020.

Vo Tan Dai

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE