- 1Law No. 32/2001/QH10 of December 25, 2001 on organization of the Government
- 2Law no. 60/2005/QH11 of November 29, 2005 on enterprises
- 3Law No. 20/2004/QH11 of June 15, 2004 amending and supplementing a number of articles of The Law on credit institutions
- 4Law No. 10/2003/QH11 of June 17, 2003, amending and supplementing a number of articles of the Vietnam State Bank Law
- 5Law No. 06/1997/QH10 of December 12, 1997 on The State Bank of Vietnam
- 6Law No. 07/1997/QH10 of December 12, 1997 on credit institutions
- 7Law No.70/2006/QH11 of June 29, 2006 on securities
THE GOVERNMENT | SOCIALIST REPUBLIC OF VIET NAM |
No: 69/2007/ND-CP | Hanoi , April 20, 2007 |
DECREE
ON FOREIGN INVESTORS' PURCHASE OF SHARES OF VIETNAMESE COMMERCIAL BANKS
THE GOVERNMENT
Pursuant to the December 25, 2001 Law on Organization of the Government;
Pursuant to the December 12, 1997 Law on the State Bank of Vietnam and the June 15, 2003 Law Amending and Supplementing a Number of Articles of the Law on the State Bank of Vietnam;
Pursuant to the December 12, 1997 Law on Credit Institutions and the June 15, 2004 Law Amending and Supplementing a Number of Articles of the Law on Credit Institutions;
Pursuant to the November 29, 2005 Law on Enterprises;
Pursuant to the June 29, 2006 Law on Securities;
Pursuant to Vietnam's international commitments;
At the proposal of the Governor of the State Bank of Vietnam,
DECREES:
Chapter I
GENERAL PROVISIONS
Article 1.- Governing scope
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2. When a Vietnamese bank is listed on the securities market, foreign investors may purchase shares of that bank in accordance with the law on securities and securities market and shall comply with shareholding percentages specified in Article 4 of this Decree.
Article 2.- Subjects of application
1. Vietnamese banks, including:
a/ Equitized state-owned commercial banks;
b/ Joint-stock commercial banks.
2. Foreign investors.
3. Other organizations and individuals involved in foreign investors' purchase of shares of Vietnamese banks.
Article 3.- Interpretation of terms
1. In this Decree, the terms below are construed as follows:
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a/ "Foreign organization" means an organization which is set up under foreign law and operates and conducts business activities in a foreign country or/and in Vietnam;
b/ "Foreign individual" means a person of foreign nationality who resides in a foreign country or in Vietnam.
2. "Foreign credit institutions" means foreign organizations, including foreign banks, foreign financial companies and other foreign financial organizations, which operate mainly and regularly in the banking domain.
3. "Existing foreign shareholder" means a foreign investor that is allowed by the State Bank of Vietnam to purchase shares and that owns shares of joint-stock commercial banks before the effective date of this Decree.
The benefits and obligations of existing foreign shareholders must comply with regulations of the State Bank of Vietnam.
4. "Foreign strategic investor" means a foreign credit institution which has prestige, financial capacity and ability to assist Vietnamese banks in developing banking products and services, raising administration capacity and applying modern technologies; and which has strategic interests conformable with Vietnamese banks' development strategies and meets specific criteria set by Vietnamese banks.
5. Affiliated persons of an organization or individual, including:
a/ The parent company of that organization or company under the same parent company of that organization;
b/ The parent company-managing person or organization, person or organization competent to appoint manager of the parent company of that organization;
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d/ Manager, Control Board's member, person or organization competent to appoint manager of that organization;
e/ Shareholder or shareholder group that owns 10% or more of the total common shares of that organization;
f/ Husband, wife, father, adoptive father, mother, adoptive mother, child, adopted child, and sibling (and their spouses) of a manager, Control Board's member or shareholder that owns 10% or more of the total common shares of that organization;
g/ Husband, wife, father, adoptive father, mother, adoptive mother, child, adopted child, and sibling (and their spouses) of that individual;
h/ Individuals authorized to represent the persons defined at Points a, b, c, d, e, f and g of this Clause for the authorizing persons and affiliated persons of the authorizing persons and authorized persons.
Article 4.- Shareholding principles applicable to foreign investors
1. The maximum shareholding percentage for foreign investors (including existing foreign shareholders) and their affiliated persons is 30% of the charter capital of a Vietnamese bank.
2. The maximum shareholding percentage for a foreign investor other than foreign credit institution or his/her/its affiliated person is 5% of the charter capital of a Vietnamese bank.
3. The maximum shareholding percentage for a foreign credit institution and its affiliated person is 10% of the charter capital of a Vietnamese bank.
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In special cases, the Prime Minister may, at the proposal of the State Bank of Vietnam, decide to allow a foreign strategic investor or his/her/its affiliated person to hold shares exceeding 15% but not exceeding 20% of the charter capital of a Vietnamese bank.
5. When a foreign credit institution holds convertible bonds, upon the conversion of bonds into stocks, the shareholding percentages specified in Clauses 1, 2, 3 and 4 of this Article must be complied with.
6. The total number of shares owned by foreign credit institutions in an equitized state-owned commercial bank is the same as that owned by Vietnamese banks at that state-owned commercial bank. The Governor of the State Bank of Vietnam shall guide the implementation of this provision.
7. Vietnamese banks shall decide on shareholding percentages for foreign investors at the banks, which, however, must not exceed the percentages specified in this Article.
Article 5.- Competence to approve foreign investors' purchase of shares of Vietnamese banks
The Governor of the State Bank of Vietnam shall approve in writing foreign investors' purchase of shares of Vietnamese banks in accordance with the provisions of this Decree and relevant provisions of law.
Article 6.- Participation in administration in Vietnamese banks
1. A foreign credit institution may become a strategic investor of only one Vietnamese bank.
2. A foreign credit institution may take part in the Managing Boards of two Vietnamese banks at most.
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Currency used in foreign investors' share purchase and sale transactions in Vietnamese banks is Vietnam dong.
Chapter II
SPECIFIC PROVISIONS
Section 1. FORMS, PRICES, AND COMPETENCE TO DECIDE ON ALTERNATIVES FOR, SELLING SHARES TO FOREIGN INVESTORS
Article 8.- Forms of selling shares
1. State-owned commercial banks may sell their shares to foreign investors upon equitization.
2. Joint-stock commercial banks may sell their shares to foreign investors upon increase of their charter capital.
3. Shareholders of a Vietnamese bank may assign their shares to foreign investors that have been allowed by competent agencies to purchase shares of that bank.
Article 9.- Share selling prices
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2. The selling prices of shares of a joint-stock commercial bank to foreign investors shall be determined through auction or agreed upon by the involved parties.
3. The prices of assigning shares of shareholders of a Vietnamese bank to foreign investors shall be agreed upon by the involved parties.
Article 10.- Competence to decide on share-selling alternatives
1. State-owned commercial banks shall offer equitization alternatives, including the sale of shares to foreign investors, and submit them to the Prime Minister for approval.
2. Joint-stock commercial banks shall offer alternatives for increasing their charter capital, including the sale of shares to foreign investors, and submit them to the General Council of Shareholders for decision.
3. Shareholders of a Vietnamese bank may decide to assign their shares to foreign investors in accordance with law and the charter of that bank.
Section 2. CONDITIONS FOR PURCHASE, SALE AND ASSIGNMENT OF SHARES
Article 11.- Conditions for sale of shares
1. A Vietnamese bank that wishes to sell its shares to foreign investors must fully meet the following conditions:
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b/ Having a healthy financial status meeting relevant conditions set by the State Bank of Vietnam;
c/ Having an efficient administration and executive apparatus as well as inspection, control and internal audit systems;
d/ Having not been sanctioned for violations of the regulations on banking operation safety for 24 months counting to the time the State Bank of Vietnam makes consideration.
2. For Vietnamese banks that fail to fully meet the conditions specified in Clause 1 of this Article, the State Bank of Vietnam may consider on a case-by-case basis and submit to the Prime Minister for decision the sale of shares of those banks to foreign investors.
Article 12.- A foreign credit institution that wishes to purchase shares of a Vietnamese bank must fully meet the following conditions:
1. Having the minimum total "Credit" assets of USD 20 billion in the year preceding the year of registration of share purchase.
2. Having international banking experience.
3. Being rated by international credit-rating organizations as capable of fulfilling financial commitments and carrying out normal operations even in case of unfavorable economic changes.
4. Foreign strategic investors shall, apart from meeting the conditions specified in Clauses 1, 2 and 3 of this Article, commit in writing to assisting Vietnamese banks in developing banking products and services, improving administration capacity and applying modern technologies.
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1. Foreign strategic investors and their affiliated persons may only assign shares under their ownership to other organizations or individuals (both at home and abroad) at least five years after they become foreign strategic shareholders of a Vietnamese bank.
2. Foreign credit institutions and their affiliated persons that own 10% of the charter capital of a Vietnamese bank may only assign shares under their ownership to other organizations or individuals (both at home and abroad) at least three years after they own 10% of the charter capital of a Vietnamese bank.
Section 3. RIGHTS AND OBLIGATIONS OF FOREIGN INVESTORS
Article 14.- Rights of foreign investors
1. To enjoy the rights like other shareholders as provided for in the charter of the Vietnamese bank where they purchase shares.
2. To convert into foreign currencies incomes from share purchase investment and revenues from assignment of shares for transfer abroad after fulfillment of financial obligations in accordance with Vietnamese law.
3. To join Managing Boards, Control Boards or Executive Boards of Vietnamese banks in accordance with law and the charters of the Vietnamese banks where they purchase shares.
4. To have other lawful rights and interests protected by the State of the Socialist Republic of Vietnam in accordance with Vietnamese law.
Article 15.- Obligations of foreign investors
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2. To ensure the lawfulness of capital sources used for share purchase and the validity of dossiers of application for share purchase in accordance with Vietnamese law.
3. To fully transfer the amount of capital already registered for the purchase of shares of Vietnamese banks under regulations of the State Bank of Vietnam.
4. To notify the State Bank of Vietnam of changes in their share capital in Vietnamese banks.
Chapter III
IMPLEMENTATION PROVISIONS
Article 16.- Responsibilities of Vietnamese banks
After obtaining the Vietnam State Bank Governor's written approval to allow foreign investors to purchase shares, Vietnamese banks shall notify in the mass media the sale of their shares to foreign investors and sell the shares in accordance with law.
Article 17.- Handling of violations
All violations of the provisions of this Decree shall, depending on their nature and severity, be handled in accordance with law.
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This Decree takes effect 15 days after its publication in "CONG BAO."
Article 19.- Implementation guidance
1. The Governor of the State Bank of Vietnam shall guide the implementation of this Decree.
2. Ministers, heads of ministerial-level agencies, heads of government-attached agencies, presidents of provincial/municipal People's Committees, chairmen of managing boards, and general directors (directors) of Vietnamese banks shall implement this Decree.
ON BEHALF OF THE GOVERNMENT
PRIME MINISTER
Nguyen Tan Dung
- 1Circular No. 38/2014/TT-NHNN dated December 08, 2014, providing for dossier, order and procedures for approving the foreign investor’s purchase of Vietnamese credit institution’s shares
- 2Circular No.07/2007/TT-NHNN of November 29, 2007 guiding the implementation of a number of contents of The Government’s Decree No. 69/2007/ND-CP dated April 20, 2007 on purchase of shares of Vietnamese commercial banks by foreign investors
- 3Law No.70/2006/QH11 of June 29, 2006 on securities
- 4Law no. 60/2005/QH11 of November 29, 2005 on enterprises
- 5Law No. 32/2001/QH10 of December 25, 2001 on organization of the Government
- 6Law No. 06/1997/QH10 of December 12, 1997 on The State Bank of Vietnam
- 7Law No. 07/1997/QH10 of December 12, 1997 on credit institutions
Decree No. 69/2007/ND-CP of April 20, 2007, on foreign investors'' purchase of shares of Vietnamese commercial banks
- Số hiệu: 69/2007/ND-CP
- Loại văn bản: Nghị định
- Ngày ban hành: 20/04/2007
- Nơi ban hành: Chính phủ
- Người ký: Nguyễn Tấn Dũng
- Ngày công báo: Đang cập nhật
- Số công báo: Đang cập nhật
- Ngày hiệu lực: 28/05/2007
- Ngày hết hiệu lực: 20/02/2014
- Tình trạng hiệu lực: Hết hiệu lực