Client Alert 090226
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Lawyers
Client Alert June 26, 2009
Decision No. 88/2009/QD-TTg by the Prime Minister issuing regulations on capital contribution and purchase of shares by foreign investors in Vietnamese enterprises, replacing Decision No. 36/2003/QD-TTg issued by the PM on 11 March 2003 越南總理 2009 年 6 月 18 日簽發第 88/2009/QD-TTg 號決定，公佈外國投資業 者出資，購買越南企業股份之規定。本規定代替總理 2003 年 3 月 11 日之第 36/2003/QD-TT 號決定。
DNH LAW LLC Suite 606, Indochina Park Tower, 4 Nguyen Dinh Chieu St., Dist. 1, Ho Chi Minh City, Vietnam
Client Alert
Issued together with the Decision No. 88/2009/QD-TTg of the Prime Minister dated 18 June 2009 is the detailed regulations on the capital contribution to and purchase of shares of Vietnamese enterprises by foreign investors . Two months back on 14 April 2009 the Prime Minister issued Decision No. 55/2009/QD-TTg which sets foreign holding at 49% in all public companies. Shares of listed public companies are being traded at either the main exchange - Ho Chi Minh Stock Exchange (HoSE), or the Hanoi Stock Exchange (HNX) for small-mid cap companies. HNX, newly converted from Hanoi Securities Trading Center (HaSTC) as a state-owned 1-member limited liability company was inaugurated on 24 June 2009. Along with the launch of HNX, a new trading floor UPCoM was also put in place for trading shares of unlisted public companies. This Decision and the accompanying detailed regulations provide foreign investors with the needed legal guidance on foreign holdings in domestic nonpublic companies. Foreign holdings in a public company, either listed or unlisted has been capped at 49%. Foreign investors investing in a non-public company by way of acquiring interest in such a company had, prior to this Decision been limited to 30% under the prior Decision No. 36/2003/QDTTg dated 11 March 2003 by the Prime Minister (“Decision 36”). Subsequent to the enactment of the Law on Investment and Law on Enterprise, as well as to becoming a member of WTO, the 30% limitation became one of the major issues faced by foreign investors when establishing presence in Vietnam via purchasing equity interests in local companies as some local licensing authorities held the view that Decision 36 had never been replaced thus the cap of 30% was still a valid rule; while other agencies in different localities viewed otherwise. Under Decision 88, the previous 30% limit on foreign holding is no longer applicable. Foreign Investors Foreign individuals and companies incorporated in foreign jurisdictions and companies organized in Vietnam with more than 49% of its capital contributed by a foreign party are subject to this Decision 88. Vietnamese Enterprises Vietnamese enterprises are those which are organized as joint stock companies, limited liability companies, partnership, or private enterprises.
越南政府總理 2009 年 6 月 18 日簽署之第 88/2009/QDTTg 號決定，发布关于外國投資業者出资，购买越南企 业股份之规定。本规定取消越南政府 2003 年 3 月 11 日 簽署之第 36/2003/QD-TTg 关于外國投資業者出资，购 买越南企业股份不超过 30%的规定。 本決定之適用 外國投資業者包括外國公司和個人。在越南設立之公 司，外方持股超過 49%，亦視爲外國公司。 越南企业包括股份有限公司，责任有限公司，合伙，和 私人企业。 外國投資業者对越南企业出资、购买越南企业之股份将 不受原 30%持股限制。除越南法律或越南签订的国际条 约明确限制外國投資業者持股的情况（如：公众公司外 國投資業者持股不超过 49%；银行外國投資業者持股 不超过 30%，等），外國投資業者对越南企业出资、购 买越南企业之股份将不受持股限制。 生效期 此決定于 2009 年 8 月 15 日起開始生效。
Scope of the Regulations Decision 88 with 4 Chapters and 13 Articles provides that there will be no limitation on the capital contribution to, or purchasing shares/equities of Vietnamese enterprises, except where foreign holding is restricted under specific Vietnamese laws or international treaties to which Vietnam is a party. (e.g., 49% in public companies; 30% in banks; none in exploration, etc.). Effective Date The Decision 88 will take effect on 15 August 2009.
DNH LAW LLC
www.dnhlaw.com
Vol. 09, No. 0225
Page 1
Client Alert
For further information, please contact:
Mr. John Yue 岳強律師 Ho Chi Minh City, Vietnam 越南胡志明市 +84 91 864 9890 [email protected]
Mr. Pham Trung Hau Ho Chi Minh City, Vietnam +84 91 360 3729 [email protected]
This publication is issued periodically to keep DNH LAW clients and other interested parties informed of current legal developments that may affect or otherwise be of interest to them. The contents contained in this publication do not constitute legal opinion and should not be regarded as a substitute for legal advice. Copyright 2009 DNH LAW. All Rights Reserved.
DNH LAW LLC
www.dnhlaw.com
Vol. 09, No. 0225
Page 2
Client Alert June 26, 2009
Decision No. 88/2009/QD-TTg by the Prime Minister issuing regulations on capital contribution and purchase of shares by foreign investors in Vietnamese enterprises, replacing Decision No. 36/2003/QD-TTg issued by the PM on 11 March 2003 越南總理 2009 年 6 月 18 日簽發第 88/2009/QD-TTg 號決定，公佈外國投資業 者出資，購買越南企業股份之規定。本規定代替總理 2003 年 3 月 11 日之第 36/2003/QD-TT 號決定。
DNH LAW LLC Suite 606, Indochina Park Tower, 4 Nguyen Dinh Chieu St., Dist. 1, Ho Chi Minh City, Vietnam
Client Alert
Issued together with the Decision No. 88/2009/QD-TTg of the Prime Minister dated 18 June 2009 is the detailed regulations on the capital contribution to and purchase of shares of Vietnamese enterprises by foreign investors . Two months back on 14 April 2009 the Prime Minister issued Decision No. 55/2009/QD-TTg which sets foreign holding at 49% in all public companies. Shares of listed public companies are being traded at either the main exchange - Ho Chi Minh Stock Exchange (HoSE), or the Hanoi Stock Exchange (HNX) for small-mid cap companies. HNX, newly converted from Hanoi Securities Trading Center (HaSTC) as a state-owned 1-member limited liability company was inaugurated on 24 June 2009. Along with the launch of HNX, a new trading floor UPCoM was also put in place for trading shares of unlisted public companies. This Decision and the accompanying detailed regulations provide foreign investors with the needed legal guidance on foreign holdings in domestic nonpublic companies. Foreign holdings in a public company, either listed or unlisted has been capped at 49%. Foreign investors investing in a non-public company by way of acquiring interest in such a company had, prior to this Decision been limited to 30% under the prior Decision No. 36/2003/QDTTg dated 11 March 2003 by the Prime Minister (“Decision 36”). Subsequent to the enactment of the Law on Investment and Law on Enterprise, as well as to becoming a member of WTO, the 30% limitation became one of the major issues faced by foreign investors when establishing presence in Vietnam via purchasing equity interests in local companies as some local licensing authorities held the view that Decision 36 had never been replaced thus the cap of 30% was still a valid rule; while other agencies in different localities viewed otherwise. Under Decision 88, the previous 30% limit on foreign holding is no longer applicable. Foreign Investors Foreign individuals and companies incorporated in foreign jurisdictions and companies organized in Vietnam with more than 49% of its capital contributed by a foreign party are subject to this Decision 88. Vietnamese Enterprises Vietnamese enterprises are those which are organized as joint stock companies, limited liability companies, partnership, or private enterprises.
越南政府總理 2009 年 6 月 18 日簽署之第 88/2009/QDTTg 號決定，发布关于外國投資業者出资，购买越南企 业股份之规定。本规定取消越南政府 2003 年 3 月 11 日 簽署之第 36/2003/QD-TTg 关于外國投資業者出资，购 买越南企业股份不超过 30%的规定。 本決定之適用 外國投資業者包括外國公司和個人。在越南設立之公 司，外方持股超過 49%，亦視爲外國公司。 越南企业包括股份有限公司，责任有限公司，合伙，和 私人企业。 外國投資業者对越南企业出资、购买越南企业之股份将 不受原 30%持股限制。除越南法律或越南签订的国际条 约明确限制外國投資業者持股的情况（如：公众公司外 國投資業者持股不超过 49%；银行外國投資業者持股 不超过 30%，等），外國投資業者对越南企业出资、购 买越南企业之股份将不受持股限制。 生效期 此決定于 2009 年 8 月 15 日起開始生效。
Scope of the Regulations Decision 88 with 4 Chapters and 13 Articles provides that there will be no limitation on the capital contribution to, or purchasing shares/equities of Vietnamese enterprises, except where foreign holding is restricted under specific Vietnamese laws or international treaties to which Vietnam is a party. (e.g., 49% in public companies; 30% in banks; none in exploration, etc.). Effective Date The Decision 88 will take effect on 15 August 2009.
DNH LAW LLC
www.dnhlaw.com
Vol. 09, No. 0225
Page 1
Client Alert
For further information, please contact:
Mr. John Yue 岳強律師 Ho Chi Minh City, Vietnam 越南胡志明市 +84 91 864 9890 [email protected]
Mr. Pham Trung Hau Ho Chi Minh City, Vietnam +84 91 360 3729 [email protected]
This publication is issued periodically to keep DNH LAW clients and other interested parties informed of current legal developments that may affect or otherwise be of interest to them. The contents contained in this publication do not constitute legal opinion and should not be regarded as a substitute for legal advice. Copyright 2009 DNH LAW. All Rights Reserved.
DNH LAW LLC
www.dnhlaw.com
Vol. 09, No. 0225
Page 2
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