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Official Gazette

Sunday, February 23, 2020

New regulations in effect

Updated: 09:37’ - 01/07/2009

- From June 1, foreign investors may purchase and hold up to 49 per cent of equity of public companies (both listed and unlisted), except for bank stocks which are still subject to the 30% cap. At the same time, enterprises which are owned by foreign entities by more than 49% can now be listed on the Vietnamese stock market.

These are two significant changes enacted under Prime Minister Decision No. 55/2009/QD-TTg of April 15, prescribing holding rates of foreign investors on the securities market and replacing Decision No. 238/2005/QD-TTg of September 29, 2005.

Only foreign securities-trading institutions may pool capital to found or buy shares from Vietnam-based securities companies with a maximum proportion of 49 per cent of charter capital, and only those managing securities investment funds and foreign insurance companies are allowed to pool capital to found or buy shares from fund management companies, also under the 49 per cent cap.

To date, there are seven companies which used to be foreign-invested and permitted to be listed under Decision No. 238 and Finance Ministry Circular No. 90/2005/TT-BTC of October 17, 2005, including Mirae joint-stock company, Mirae fiber joint-stock company, Taicera ceramic industry company, Chang Yih flooring tile company, Tung Kuang joint-stock company, Taya electric wire and cable company, and Full Power joint-stock company.

However, foreign shareholders that are holding more than 49 per cent of these companies’ capital are not required to sell their shares to reduce their holdings to below the cap before these companies are officially listed until they wish to trade in these securities on the market.

One company of this type is Everpia Vietnam Company which is applying for listing though 90 per cent of its charter capital is held by foreigners who commit to making long-term investment in Vietnam. The biggest concern of these investors is that they would not be allowed to purchase more stocks to maintain their holding rate whenever the company issues new stocks or takes other diluting activities.

- From June 22, insurers that fight over or buy off clients, provide insurance, insurance brokerage or reinsurance without a license, unlawfully enter into merger or acquisition deals or promote unqualified managerial officials will face a fine of up to VND 70 million (against current level of VND 20 million).

Decree No. 41/2009/ND-CP of May 5 replaces Decree No. 118/2003/ND-CP of October 13, 2003, on sanctioning of administrative violations in insurance business, and specifies some new violations which are subject to fines of VND 10-70 million, much heavier than current ones, including forging or modifying documents in license application dossiers or failing to comply with procedures for changing appointed actuaries, or these actuaries’ acts of improperly setting up professional reserves for life insurance policies, failing to make periodical reports or assess reinsurance programs.

- Viet kieu (overseas Vietnamese) wishing to return to their home country for permanent residence are required, as of June 26, to evidence their ownership of lawful homes in Vietnam.

These applicants’ lawful homes may be houses legally owned by or leased or lent to them under written contracts. Permanent residence registration by current tenants being Viet kieu is subject to consent of their landlords.

Only Viet kieu holding valid foreign passports or surrogate papers, e.g., permanent residence permits issued by foreign authorities, or Vietnamese passports, can apply for permanent residence in Vietnam.

As guided by the Ministry of Public Security and the Ministry of Foreign Affairs in Joint Circular No. 05/2009/TTLT-BCA-BNG, guiding formalities for Viet kieu to register their permanent residence in Vietnam, these persons wishing to permanently reside in centrally run cities (Hanoi, Ho Chi Minh City, Hai Phong, Da Nang and Can Tho) should evidence their continuous stay in these cities for at least one year and make registrations in their relatives’ household registration books or their own household registration books made before their departure from the country.

- Unlicensed users or reproducers of television broadcasts, cinematographic works or computer programs may face, from June 30, a heavy fine of up to VND 500 million (against current VND 70 million) under Decree No. 47/2009/ND-CP of May 13, 2009, on sanctioning of administrative violations of copyright and related rights, which supersedes Decree No. 56/2006/ND-CP. 

The regulation empowers specialized inspectors of the Ministry of Culture, Sports and Tourism or provincial-level Culture, Sports and Tourism Services and heads of provincial-level administrations who are on duty to impose this maximum fine on these infringements as well as illegal reproduction of works, direct or indirect recording of performances, and infringements valued at over VND 500 million.

Customs, market management and people’s security forces, border guards and coast guards are also competent to punish some kinds of infringement.

VNL_KH1 

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