VIETNAM Law and Practice Contributed by: Minh Duong, Phong Nguyen and Justin Gisz, Asia Counsel Vietnam Law Company Limited
attractive to international investors in the future. This change is scheduled to take effect in Sep - tember 2026, with the final confirmatory review by FTSE Russell scheduled in March 2026. In general, the LOE and Decree No 153 govern the private issuance of bonds and shares by non-public companies, while the LOS and Decree 155 regulate other scenarios, such as public offerings and the operation of securities intermediaries. Private place - ment of bonds by non-public joint stock companies will now be subject to an additional condition that the issuer’s total liabilities (including the value of bonds to be issued) must not exceed five times its equity capital, as reflected in the audited financial statements for the fiscal year immediately preceding the issuance year. Apublic company is defined as a JSC that meets either of the following two conditions: • it has a charter capital of at least VND30 billion, with 10% of the shares held by 100 or more non- major shareholders; or • it has completed an IPO that has been registered with the SSC. To proceed with a public offering of bonds or shares, businesses must meet stringent requirements under the law regarding their financial capacity and opera - tional performance. For example, the issuer’s opera - tions in the preceding year must have been profitable, with no accumulated losses and no overdue debt exceeding one year. Additional conditions will be required for businesses that intend to be listed on a standard stock exchange, such as the Ho Chi Minh City Stock Exchange (HOSE) or the Hanoi Stock Exchange (HNX). Foreign investors are permitted to invest in bonds issued by Vietnamese companies. Those who intend to invest in equity instruments can engage in the Viet - namese stock market through one of the following methods: • direct investment – foreign investors can trade stocks directly on the stock exchange; or
• indirect investment – foreign investors can entrust their capital to securities investment fund man - agement companies or branches of foreign fund management companies in Vietnam. For direct investment, foreign investors are required to register a securities trading code with the Viet - nam Securities Depository and Clearing Corporation (VSDC) before initiating investment activities. This obligation does not apply to indirect investments, as the entrusting unit will handle matters related to trans - action code registration. Regardless of investment method, FDIs must comply with the requirements on foreign ownership limitations. 5.3 Investment Funds Foreign investors structured as investment funds do not require any additional regulatory review beyond the standard requirements for foreign investors. The investment activities of investment funds are gov - erned by the same rules and regulations that apply to other foreign investors. The obligations of foreign investors operating in the Vietnamese stock market are outlined in Circular 51/2021/TT-BTC of the MOF (as amended). These obligations encompass a range of aspects, including: • indirect investment – foreign investors can par - ticipate in the Vietnamese stock market through securities investment funds or branches of foreign fund management companies; • securities depository account opening – foreign investors are required to open a securities deposi - tory account with the VSDC to facilitate their stock transactions; • securities trading code registration – foreign inves - tors must register a securities trading code with the VSDC to identify their transactions on the stock exchange; and • reporting and information disclosure obligations – foreign investors are subject to various reporting and information disclosure requirements, including the submission of periodic reports and the disclo - sure of material events to the SSC and the relevant stock exchange.
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