Integrated document No. 04/VBHN-NHNN dated March 31, 2025 Decree on prescribing foreign investors’ purchase of shares of Vietnamese credit institutions

THE STATE BANK OF VIETNAM -------	THE SOCIALIST REPUBLIC OF VIET NAM Independence-Freedom-Happiness -----------------
No. 04/VBHN-NHNN	Hanoi, March 31, 2025

 

DECREE

PRESCRIBING FOREIGN INVESTORS’ PURCHASE OF SHARES OF VIETNAMESE CREDIT INSTITUTIONS

The Government’s Decree No. 01/2014/ND-CP dated January 03, 2014 prescribing foreign investors’ purchase of shares of Vietnamese credit institutions, which comes into force from February 20, 2014, is amended by:

The Government’s Decree No. 69/2025/ND-CP dated March 18, 2025 providing amendments to the Government’s Decree No. 01/2014/ND-CP dated January 03, 2014 prescribing foreign investors’ purchase of shares of Vietnamese credit institutions, which comes into force from May 19, 2025.

Pursuant to the Law on Government Organization dated December 25, 2001;

Pursuant to the Law on the State Bank of Vietnam dated June 16, 2010;

Pursuant to the Law on Credits Institutions dated June 16, 2010;

Pursuant to the Law on Enterprises dated November 29, 2005;

Pursuant to the Law on securities dated June 29, 2006 and the Law on amendments to the Law on securities dated November 24, 2010;

At the request of the Governor of the State Bank of Vietnam (SBV);

The Government promulgates a Decree prescribing foreign investors’ purchase of shares of Vietnamese credit institutions[1],

Chapter I

GENERAL PROVISIONS

Article 1. Scope[2]

1. This Decree provides for conditions and procedures for purchase of shares, maximum total aggregate shareholding of foreign investors, maximum shareholding of a foreign investor, and maximum shareholding of a foreign investor and its related persons at a Vietnamese credit institution; conditions to be satisfied by Vietnamese credit institutions selling shares to foreign investors.

2. Foreign-invested economic organizations that are required to meet the same relevant conditions and follow the same procedures for investment as foreign investors when making investment or capital contribution or purchasing shares in accordance with regulations of law shall comply with regulations applicable to foreign investors enshrined herein when purchasing shares of Vietnamese credit institutions.

Article 2. Regulated entities

1. Joint-stock credit institutions and credit institutions converting legal form into joint-stock credit institutions (hereinafter referred to as “Vietnamese credit institutions”).

2. Foreign investors.

3. Other organizations and individuals involved in foreign investors’ purchase of shares of Vietnamese credit institutions.

Article 3. Definitions

For the purpose of this Decree, the terms herein are construed as follows:

1. Joint-stock credit institution means a credit institution that is established and organized in the form of a joint-stock company. Joint-stock credit institution include joint-stock commercial banks, joint-stock finance companies, and joint-stock finance lease companies.

2. Credit institution converting legal form into joint-stock credit institution means a credit institution that is undergoing conversion of its legal form from a credit institution operating in the form of a limited liability company into a credit institution operating in the form of a joint-stock company.

3. Foreign investors include foreign organizations and foreign individuals.

4. [3] Foreign individual means any person who holds foreign nationality.

5. [4] Foreign organization means an organization that is established under the law of a foreign country and carries out business investment activities in Vietnam.

6. Foreign strategic investor means a foreign organization that is financially capable and has a competent person’s written commitment to form a long-term interest-based attachment with a Vietnamese credit institution and assist this Vietnamese credit institution in receiving transfer of modern technologies, developing banking products and services, and improving its management, administration and financial capacity.

7. Shareholding includes direct and indirect shareholding.

8. [5] Credit institution given “very poor” rating and facing difficulties prescribed in clause 6 Article 7 hereof is a credit institution falling in any of the following circumstances:

a) A credit institution that is placed under special control by SBV;

b) A commercial bank that is subject to mandatory transfer;

c) A credit institution that is rated “very poor” according to the latest ranking results announced by SBV.

9. [6] Total aggregate shareholding of foreign investors means the sum of shareholdings of the foreign individuals, foreign organizations and economic organizations prescribed in clause 2 Article 1 hereof.

Article 4. Currency used in share purchase and sale transactions

The currency used in foreign investors’ share purchase and sale transactions in Vietnamese credit institution is Vietnamese dong (VND).

Article 5. Participation in administration of Vietnamese credit institutions

1. Participation in and appointment of representative for contributed capital amount to participate in the Board of Directors of a Vietnamese credit institution shall comply with provisions of the Law on Credit Institutions and relevant laws.

2. Each foreign investor shall only be allowed to participate in, or appoint its representative for contributed capital amount to participate in, the Board of Directors of a Vietnamese credit institution, except the following cases:

a) The foreign investor participates in, or appoints its representative for contributed capital amount to participate in, the Board of Directors of another credit institution that is a subsidiary of the Vietnamese credit institution of which it participates in, or appoints its representative for contributed capital amount to participate in, the Board of Directors.

b) The foreign investor participates in, or appoints its representative for contributed capital amount to participate in, the Board of Directors of a “very poor” rated credit institution to carry out restructuring according to the plan approved by SBV.

Chapter II

SPECIFIC PROVISIONS

Section 1. FORMS, PERCENTAGE AND PROCEDURES FOR SHARE PURCHASE

Article 6. Forms of share purchase by foreign investors

1. Foreign investors purchase shares from existing shareholders of joint-stock credit institutions.

2. [7] Foreign investors purchase shares in case credit institutions conduct offering of shares, issue shares to increase their charter capital or sell treasury stocks which they purchased before January 01, 2021.

3. Foreign investors purchase shares in case where credit institutions convert legal form into joint-stock credit institutions.

Article 7. Shareholding of foreign investors

1. A foreign individual’s shareholding shall not exceed 5% of the charter capital of a Vietnamese credit institution.

2. A foreign organization’s shareholding shall not exceed 15% of the charter capital of a Vietnamese credit institution, except the case prescribed in clause 3 of this Article.

3. The shareholding of a foreign strategic investor shall not exceed 20% of the charter capital of a Vietnamese credit institution.

4. The shareholding of a foreign investor and their related persons shall not exceed 20% of the charter capital of a Vietnamese credit institution.

5. [8] Total aggregate shareholding of foreign investors shall not exceed 30% of the charter capital of a Vietnamese commercial bank, except the cases prescribed in clauses 6, 6a of this Article or during the period over which provisions of clause 9 Article 14 hereof apply. Total aggregate shareholding of foreign investors shall not exceed 50% of the charter capital of a Vietnamese non-bank credit institution, except the cases prescribed in clause 6 of this Article.

6. [9] In order to ensure the safety of the credit institution system, the Prime Minister may in some special cases decide the shareholding of a foreign organization, the shareholding of a foreign strategic investor, and total aggregate shareholding of foreign investors at a credit institution given “very poor” rating and facing difficulties which may exceed such limits prescribed in clauses 2, 3, 5 of this Article on a case-by-case basis.

6a. [10] Total aggregate shareholding of foreign investors at a commercial bank that acts as the transferee under an approved mandatory transfer plan (excluding those commercial banks over 50% of charter capital of which is held by the State) may exceed 30% but shall not exceed 49% of its charter capital during the validity period of such mandatory transfer plan.

7. [11] The shareholdings specified in clauses 1, 2, 3, 4, 5, 6, 6a of this Article include those shares purchased by other organizations or individuals using funding entrusted by foreign investors.

8. Foreign investors that covert convertible bonds of Vietnamese credit institutions into shares must also meet the shareholding requirements and conditions for ownership of shares laid down herein.

Article 8. Authority, procedures and documentation requirements for foreign investors’ purchase of shares of Vietnamese credit institutions

1. Regarding the cases where the purchase of shares leads to the shareholding of 10% or more of charter capital; cases of share purchase and establishment of foreign strategic investor status of a Vietnamese credit institution:

a) The Vietnamese credit institution (for a credit institution whose shares are not yet listed/registered for trading[12]) or the foreign organization (for a credit institution whose shares have been listed/registered for trading[13]) shall prepare an application for approval of transaction, and send it directly, by post or electronically to SBV before performing any transaction.

b) Within 40 days from its receipt of an adequate and valid application, in consideration of the conditions set out in Articles 9, 10 of this Decree, SBV shall consider whether to issue a decision to approve the foreign organization's purchase of shares or not. If an application is refused, SBV shall give a written response clearly stating reasons for such refusal.

2. Regarding purchase of shares resulting in shareholding of 5% or more of the charter capital, and additional purchase of shares by a foreign organization that holds 5% or more of the charter capital of a Vietnamese credit institution, except the cases prescribed in clause 1 of this Article, foreign investors shall follow the procedures laid down in clause 2 Article 37[14] of the Law on Credit Institutions.

3. Regarding other cases of share purchase, except the cases prescribed in clauses 1 and 2 of this Article:

a) The foreign investor that wishes to purchase shares of a Vietnamese credit institution whose shares are not yet listed/registered for trading[15] shall send an application directly or by post to that Vietnamese credit institution for its consideration and making of decision which must be conformable with provisions of Article 7 of this Decree.

The Vietnamese credit institution shall impose specific provisions on the application documents to be submitted by foreign investors that wish to purchase shares in accordance with regulations of law.

Within 20 days from its receipt of an adequate and valid application, the Vietnamese credit institution shall give a written response to the foreign investor. If an application is refused, the Vietnamese credit institution shall clearly state reasons for such refusal.

b) Foreign investors are allowed to purchase shares of joint-stock credit institutions whose shares have been listed/registered for trading[16] in accordance with regulations of law on securities and securities market, and must comply with provisions of Article 7 hereof.

4. SBV shall promulgate specific regulations on order, procedures and documentation requirements for foreign investors’ purchase of shares of Vietnamese credit institutions as prescribed in clauses 1, 2 of this Article.

Section 2. CONDITIONS FOR HOLDING OF SHARES

Article 9. Conditions for foreign organization’s purchase of shares resulting in its shareholding of 10% or more of charter capital of a Vietnamese credit institution

1. It is rated “stable” or equivalent or higher by a reputable international credit rating agency.

2. It has sufficient funding for purchasing shares as demonstrated in its financial statements which have been audited by an independent audit organization of the year preceding the year of application submission, and such funding is derived from lawful sources as prescribed by law.

3. Its purchase of share does not cause adverse influence on the safety and stability of the system of Vietnamese credit institutions; does neither create monopoly nor limit competitiveness among Vietnamese credit institutions;

4. The foreign investor has not committed any serious violations against regulations on money, banking, securities and securities market of the country where such foreign investor is headquartered, and those of Vietnam within the last 12 months prior to the date of application submission.

5. The value of its total assets is equivalent to at least USD 10 billion, for a foreign investor that is a bank, finance company or finance lease company, or it maintains a charter capital equivalent to at least USD 1 billion, for a foreign investor that is another organization, in the year preceding the year of application submission.

Article 10. Conditions for foreign organization’s purchase of shares and establishment of foreign strategic investor status

1. It meets the conditions set out in clauses 1, 2, 3, 4 Article 9 of this Decree.

2. It is a foreign bank, foreign finance company or foreign finance lease company that is licensed to perform banking activities in accordance with regulations of law of the country where it is headquartered. A foreign finance company may only act as a strategic investor of a Vietnamese finance company. A foreign finance lease company may only act as a strategic investor of a Vietnamese finance lease company.

3. It has at least 5 years’ experience in performing international finance and banking activities.

4. The value of its total assets in the year preceding the date of application submission is equivalent to at least USD 20 billion.

5. It has a written commitment and clear plan for forming a long-term interest-based attachment with a Vietnamese credit institution and assist this Vietnamese credit institution in receiving transfer of modern technologies, developing banking products and services, and improving its management, administration and financial capacity.

6. It does not hold 10% or more of the charter capital of any other credit institution in Vietnam;

7. It is committed to hold or is holding at least 10% of the charter capital of the Vietnamese credit institution of which it is applying for purchase of shares and foreign strategic investor status.

Section 3. VIETNAMESE CREDIT INSTITUTIONS SELLING SHARES

Article 11. Conditions for Vietnamese credit institutions' sale of shares to foreign investors

1. A credit institution converting legal form into a joint-stock credit institution must have an equitization plan or conversion plan which has been approved by a competent authority in accordance with regulations of law, and includes the plan for sale of shares to foreign investors.

2. [17] A joint-stock credit institution must have a plan for increase of charter capital or plan for sale of treasury stocks which has been approved by its General Meeting of Shareholders and includes the plan for offering or issuance of shares to foreign investors. A joint-stock credit institution over 50% of charter capital of which is held by the State shall be required to complete procedures according to regulations of law on financial management of state-owned enterprises before submitting the plan for increase of charter capital or plan for sale of treasury stocks to its General Meeting of Shareholders for approval.

Article 12. Selling prices of shares sold to foreign investors

1. The prices of shares sold to foreign investors of Vietnamese credit institutions which are not yet listed/registered for trading[18] shall be determined through auction or agreement.

2. The prices of shares sold to foreign investors of joint-stock credit institutions which have been listed/registered for trading[19] shall be determined in accordance with regulations of law on securities and securities market.

3. Deposits for share purchase transactions shall be made according to specific agreements between foreign investors and Vietnamese credit institutions in accordance with regulations of law.

Section 4. RIGHTS AND OBLIGATIONS OF FOREIGN INVESTORS

Article 13. Rights of foreign investors

1. Be entitled to all rights of a shareholder as prescribed by the law of Vietnam, the Charter of the joint-stock credit institution from which the foreign investor purchases shares, and specific agreements which are conformable with the law of Vietnam and included in the share purchase and sale contract signed by and between the foreign investor and the Vietnamese credit institution.

2. Make outward remittance of incomes from the foreign investor’s investment in or purchase of shares, and proceeds from their transfer of shares after having fulfilled all financial obligations as prescribed by the law of Vietnam.

3. Participate in or appoint their representative to participate in the Board of Directors and/or the Board of Controllers of or to act as an executive of the joint-stock credit institution from which the foreign investor purchases shares in conformity with this credit institution’s Charter and the law of Vietnam.

4. Have other legitimate rights and interests protected by the State of the Socialist Republic of Vietnam in accordance with regulations of the law of Vietnam and international conventions to which Vietnam is a signatory.

Article 14. Obligations of foreign investors

1. Fulfill all obligations of a shareholder as prescribed by the law of Vietnam, the Charter of the joint-stock credit institution from which the foreign investor purchases shares, and specific agreements which are conformable with the law of Vietnam and included in the share purchase and sale contract signed by and between the foreign investor and the Vietnamese credit institution.

2. Ensure and take responsibility for the legality of their funding used for purchasing shares, the validity of their application for share purchase, and the accuracy of their provided information and documents in accordance with regulations of the law of Vietnam.

3. Provide adequate information on the foreign investor's related persons holding shares of, and information on the foreign investor’s holding of shares through their related persons and investment trust at the Vietnamese credit institution from which the foreign investor purchases shares, and assume responsibility for the accuracy of such provided information.

4. Transfer adequate funding for purchasing shares of the Vietnamese credit institution as agreed upon in the share purchase and sale contract signed by and between the foreign investor and the Vietnamese credit institution, and in conformity with regulations of law.

5. A foreign strategic investor shall not be allowed to transfer the shares which they are holding at a Vietnamese credit institution to any other organization or individual within at least 5 years from the date on which they are certified as a strategic investor of that Vietnamese credit institution as specified in the written approval given by SBV.

6. A foreign investor that holds at least 10% of the charter capital of a Vietnamese credit institution shall not be allowed to transfer the shares which they are holding to any other organization or individual within at least 3 years from the date on which they are certified to hold at least 10% of the charter capital of this credit institution.

6a. [20] When the limits on shareholding of foreign investors prescribed in Article 7 hereof are exceeded as a result of foreign investors’ additional purchase of shares offered by a credit institution in proportion to each shareholder’s holding of ordinary shares at that credit institution, the following provisions shall apply:

a) If the shareholding of a foreign investor or a foreign investor and its related person prescribed in Article 7 hereof is exceeded, within a maximum duration of 6 months from the time of occurrence of such excess, the foreign investor shall take appropriate actions to reduce its shareholding as well as ensure its compliance with the corresponding shareholding limit prescribed in Article 7 hereof.

b) If total aggregate shareholding of foreign investors prescribed in Article 7 hereof is exceeded, the foreign investors shall not be allowed to additionally purchase shares of that credit institution until the requirement regarding total aggregate shareholding of foreign investors prescribed in Article 7 hereof is satisfied.

6b. [21] Foreign investors are not required to fulfill the obligations specified in clauses 5, 6 of this Article when they transfer shares in accordance with provisions of point a clause 6a of this Article.

7. A foreign investor that wishes to purchase shares of a “very poor” rated joint-stock credit institution which is subject to restructuring as prescribed in clause 6 Article 7 of this Decree shall develop and submit a plan for purchase of shares and restructuring of that “very poor” rated credit institution to SBV for its review, appraisal and submission to the Prime Minister for his decision.

8. Strictly comply with Vietnam’s regulations on foreign exchange management in force.

9. [22] Upon expiry of the mandatory transfer plan, foreign investors shall not be allowed to additionally purchase shares of the commercial bank that acts as the transferee under such mandatory transfer plan (unless that commercial bank offers shares to its existing shareholders or a foreign investor sell their shares at that commercial bank to another foreign investor under a specific agreement) until total aggregate shareholding of foreign investors at that commercial bank falls below 30% of its charter capital.

Chapter III

IMPLEMENTATION ORGANIZATION[23]

Article 15. Responsibilities of regulatory authorities

1. SBV shall:

a) Provide guidelines for and inspect, supervise the implementation of this Decree;

b) Provide information on purchase and sale of shares by foreign investors under its jurisdiction for the Ministry of Finance to serve cooperation in performing management tasks as prescribed herein.

c. [24] In case total aggregate shareholding of foreign investors at a commercial bank that acts as the transferee under an approved mandatory transfer plan is allowed to exceed 30% of its charter capital according to such mandatory transfer plan, SBV shall notify the Ministry of Finance of Vietnam (via the State Securities Commission of Vietnam) in writing of the approved maximum total aggregate shareholding of foreign investors, starting and ending dates of the validity period of the mandatory transfer plan.

2. The Ministry of Finance shall:

a) Manage, and provide guidelines on, foreign investors’ purchase of shares of joint-stock credit institutions whose shares have been listed/registered for trading[25] in a manner ensuring that they comply with the shareholding limits prescribed herein and regulations of law on securities and securities market;

b) Provide information on purchase and sale of shares by foreign investors under its jurisdiction for SBV to serve cooperation in performing management tasks as prescribed herein.

Article 16. Responsibilities of Vietnamese credit institutions

1. Organize the sale of shares in accordance with regulations of this Decree and relevant laws.

2. Carry out disclosure of information in accordance with regulations of law.

3. [26] Submit in an adequate and timely manner to competent authorities reports on purchase of shares by the foreign investors and economic organizations prescribed in clause 2 Article 1 hereof.

Article 17. Handling of violations

Any violations against regulations of this Decree shall be considered and handled in accordance with provisions of the Decree prescribing penalties for administrative violations in banking and monetary sector.

Article 18. Effect

This Decree comes into force from February 20, 2014 and replaces the Government’s Decree No. 69/2007/ND-CP dated April 20, 2007 prescribing foreign investors’ purchase of shares of Vietnamese commercial banks.

Article 19. Implementation

Ministers, heads of ministerial agencies, heads of Governmental agencies, Chairpersons of People’s Committees of central-affiliated cities or provinces, Chairpersons of Boards of Directors, Chairpersons of Boards of Members, and General Directors (Directors) of Vietnamese credit institutions, foreign investors and relevant organizations and individuals are responsible for the implementation of this Decree./.

 

CERTIFIED BY PP. GOVERNOR DEPUTY GOVERNOR Doan Thai Son