VIETNAM Law and Practice Contributed by: Minh Duong, Phong Nguyen and Justin Gisz, Asia Counsel Vietnam Law Company Limited
Equity transfer In an LLC, owners have a statutory right of first offer for transferring their interests. In a JSC, shares are generally freely transferable, with some restrictions on founding shareholders and limi - tations outlined in the company charter. Listing on stock exchanges Only JSCs can be listed on Vietnamese stock exchanges. Corporate governance JSCs feature multiple decision-making bodies with distinct responsibilities, fostering a more structured and transparent governance framework. The structure of LLCs is simpler, enabling faster deci - sion-making for business agility. Public company status A JSC can become a public company by meeting either of the two following criteria: • at least 100 shareholders and VND30 billion mini - mum paid-up charter capital, with 10% of voting shares held by at least 100 non-major sharehold - ers; or • successful completion of an initial public offering (IPO). Public company status requires registration with the State Securities Commission of Vietnam (SSC). Choosing the Right Form JSCs are ideal for seeking third-party equity invest - ments, implementing complex ownership structures, and listing on the stock exchange. LLCs are suitable for smaller businesses with fewer owners, and for quick decision-making and opera - tional agility. Ultimately, the best choice depends on the investors’ specific investment goals, capital requirements and desired governance structure.
• amending the investment registration certificate (if applicable) to reflect the buyer as the project inves - tor; and • registering the ownership of specific assets (eg, real properties, trade marks, intellectual property, automobiles). Special Procedures Specific procedures apply to M&A transactions involv - ing State-owned companies or PPP project compa - nies. For example, acquiring shares or assets from a State-owned company requires a compulsory bidding and competitive offer process to ensure fair value, and acquiring interests in a PPP company requires approval from the authority signing the PPP contract. Notably, from 1 July 2025, several requirements for the capital transfer in PPP project companies are now lifted, such as (i) minimum ratio of each member of a consortium; (ii) restricted equity transfer before completing construction or beginning the operation phase of the project; and (iii) assignee’s financial and management capacity for the implementation of the PPP contracts. 4. Corporate Governance and Disclosure/Reporting 4.1 Corporate Governance Framework Investors in Vietnam have two primary company forms to choose from: Limited Liability Companies (LLCs) and Joint Stock Companies (JSCs). Both offer limited liability to owners, meaning their liability is capped at their capital contribution. Ownership is also deter - mined by the proportion of capital invested. However, there are several key differences between the two forms, as follows. Key Differences Capital structure and flexibility An LLC cannot issue shares, limiting flexibility in rais - ing capital. A JSC can issue various share classes, offering great - er flexibility for attracting investment and tailoring ownership rights.
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