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Official Gazette

Sunday, September 20, 2020

Listing of Vietnamese companies in Singapore*

Updated: 08:51’ - 03/03/2011

(Continued from last issue)


After the appointment of the advisors, the working team will concurrently conduct a due diligence investigation on the business of the company and, as the case may be, that of its subsidiaries, prepare the financial statements, draft the prospectus and prepare the listing application to be submitted to the Singapore Exchange (the Application Review Stage). After approval has been obtained from the Singapore Exchange, the prospectus will have to be lodged with the MAS and posted on the MAS website for public scrutiny (the Prospectus Review Stage). Subsequent to approval from the MAS, the prospectus will be registered and the public offer process can begin.

The indicative timeline for the listing process is as follows:

Effective on March 1, 2010, for a period of one year, a new review process is being tested by the MAS in order to improve the efficiency and reduce the time for listing of the company. The company may submit the draft prospectus to MAS for pre-lodgment review at the Application Review Stage subject to the key issues relating to the listing application being cleared by Singapore Exchange.

Continuing Listing Obligations

Post-listing, companies with a primary listing on the HoSE or HNX and a secondary listing on the Singapore Exchange, must continue to comply with Vietnamese listing obligations and such Singapore listing rules as may be required by the Singapore Exchange from time to time. Key continuing listing obligations which may be required by the SGX-ST and which may be more stringent than applicable Vietnamese laws, home exchange’s and SSC’s rules, may include:

·    A related person transaction may need to be announced and/or approved by the board of directors[1] or by the shareholders;

·    Depending on the value of the transaction, a major acquisition or disposal of assets may need to be announced and/or approved by the board of directors[2] or by the shareholders; and,

·    The issuer must release all information and documents in English to the SGX-ST at the same time as they are released to the home exchange, and must inform the SGX-ST of any issue of additional securities and the decision of the home exchange.

Practical Issues Facing Vietnamese Companies in Seeking an SGX-ST Listing

While there is no precedent for the listing of a Vietnamese incorporated company on the SGX-ST, we envisage certain practical issues which Vietnamese companies may encounter in any overseas listings in general and SGX-ST listings in particular:

Foreign shareholding limit under Vietnamese rules

Shareholders on the SGX-ST will be considered “foreign shareholders” for the purposes of calculating foreign shareholding in the company. They will be aggregated with foreign shareholders that hold shares listed on the home exchange. As such, the company may need to structure the offering, monitor its foreign shareholding in Vietnam and seek necessary approval from competent Vietnamese authorities to ensure that the limit on foreign shareholdings is observed. Currently, the foreign shareholding cap applicable to a Vietnamese incorporated public company is 49 per cent or a percentage specified for certain industries. For example, foreign shareholdings in a bank cannot exceed 30 per cent of its charter capital.


Under Vietnamese law[3], a Vietnamese listed company may prepare its financial statements in accordance with (i) international accounting standards, or (ii) both international accounting standards and VAS. This is satisfactory provided that the statements are accompanied by an explanation of the differences.

Significant time and resources may be required to prepare financial statements to be included in the prospectus and for compliance subsequent to the listing on the Singapore Exchange. This will be an issue, at least in the beginning, if the company and its accounting staff are not familiar with the international accounting reporting standards (i.e., FRS, IFRS or US GAAP).


The prospectus for the offering must contain all the information that investors and their professional advisers would reasonably require in order to make an informed assessment. Certain specific information is required by the Singapore securities laws and regulations. As such, the drafting and verification of the information to be disclosed in the prospectus necessarily require extensive due diligence on the company’s business, often to an extent which is unfamiliar to a Vietnamese company.

Infrastructure Matters

Vietnamese and Singapore authorities are working towards setting up an infrastructure to facilitate listings of Vietnamese companies in Singapore, including such matters as shareholding custody, the movement of shares between the home and overseas exchanges, currency conversion to enable Vietnamese companies to transfer funds overseas (for example, in connection with payment of dividends) and transfer of proceeds from overseas offerings and future fund raisings to Vietnam. In addition, while the tax obligations in connection with Vietnamese stocks listed overseas have a direct impact on the attractiveness of Vietnamese stocks to foreign shareholders, the application of tax laws (such as Personal Income Tax and Corporate Income Tax Laws) still await further clarifications and guidance from the Vietnamese tax authorities.

Reporting requirements

A Vietnamese company seeking secondary listing in Singapore must comply with the announcement requirements presented below. The announcements must be translated into English and must be released to the SGX-ST at the same time as they are released in Vietnam:

·    Announcement of its annual and quarterly financial statements:

·    Annual financial statements:

There are differences in respect of timelines for the disclosure of annual financial statements between the SGX-ST rules and the HoSE/HNX rules which need to be reconciled.

Rule 705 of the Listing Manual of the SGX-ST requires a listed issuer on the SGX-ST to announce its annual financial statements not later than 60 days after the end of the relevant fiscal year. According to Vietnamese rules[4] (based on which HoSE and HNX adopt their rules), the annual financial statements must be completed within 90 calendar days after the fiscal year ends and must be published within 10 calendar days after the foregoing 90 calendar days. The annual financial statements must also be audited by an independent auditing firm.

As such, the company may need to seek SGX-ST’s agreement that, post-listing, the company’s annual accounts will be released within 100 calendar days after the year-end. Also, given the necessity to reconcile its VAS financial statements to the IFRS, FRS or US GAAP, as the case may be, it would be difficult for the company to comply with the SGX-ST reporting requirements within the prescribed timeframe. The company will need to assess the timeframe required to prepare IFRS account and make relevant proposal to SGX-ST regarding the timeframe for disclosure.

·    Quarterly financial statements:

Rule 705 of the Listing Manual requires a listed issuer on the SGX-ST to announce its quarterly financial statements not later than 45 days after the end of the relevant quarter. According to the HoSE/HNX rules, quarterly financial statements (for the first and the third quarters) must be announced within 25 calendar days after the quarter ends. Biannual financial statements must be announced within 45 calendar days after the end of the second and fourth quarters.

As such, if the issuer is able to prepare IFRS account, it will be able to comply with the above mentioned requirement on simultaneous release of information and documents on the SGX-ST and HoSE/HNX and Rule 705, i.e., by releasing IFRS account simultaneously on HoSE/HNX and the SGX-ST within 25 days or 45 days, as the case may be, after the quarter ends.

·    Announcement of extraordinary events such as frozen bank accounts, suspension of operations, or bankruptcy, etc. An announcement must be made in the company’s website and through the HoSE/HNX’s media (i.e., the relevant exchange’s website or securities market bulletin), depending on the type of each event, within 24 hours or 72 hours from the occurrence of the event;

·    Announcement upon special request of the SSC or of HoSE/HNX. The announcement must be made within 24 hours from receipt of such request;

·    Announcement of internal shareholders’ transactions[5]. The announcement must be made in the form of a written report according to a set form provided in Circular 09 and submitted to the SSC, the HoSE/HNX and the listed company within three working days before the transaction date and three working days after completion. The transaction can take place 24 hours after the HoSE/HNX has made such announcement.

·    A company listing in Singapore is also required under the Singapore laws to disclose all information which is necessary to avoid the establishment of a false market in its shares or which would likely materially affect the price of its shares. As such, information concerning the company internally, the appointment or cessation of service of its officers, the meetings of the company, the acquisition and realization of assets, the winding-up or judicial management, etc., must be announced to the Singapore Exchange within two business days of such occurrence.

Corporate Governance

The company may be required to implement additional corporate governance measures acceptable to the Singapore Exchange. Such measures would include, most importantly, measures to safeguard shareholders’ interest, resolution of conflicts of interest and internal control mechanism to ensure that related person transactions will be carried out on an arm’s length basis and on normal commercial terms. Such measures may include broadening the scope of duties of the Inspection Committee to take on the role of the Audit Committee in a company listed on the Singapore Exchange, ongoing disclosure by the management (including the directors and key executive officers) of transactions between the company and themselves or their related persons, development of a framework to identify and resolve or mitigate actual and potential conflicts of interest.

Another challenge facing potential Vietnamese issuers is the requirement to have at least two independent directors residing in Singapore. An “independent director” should have no relationship with the company, its related companies (i.e., subsidiaries or parent company of the issuer or subsidiaries of the parent company) or its officers, which could interfere or be reasonably perceived to interfere with the exercise of the director’s independent business judgment with a view to the best interests of the company. The residence requirement is satisfied if the director is a Singaporean citizen, a Singaporean permanent resident, or a person who has been issued a Singapore employment pass. 

Foreign Exchange

A company that lists its shares overseas has to open a foreign currency account with an authorized credit institution in Vietnam and make all foreign currency collections or payments in connection with their overseas listing via this account. Although there is no virtual restriction on currency conversion to effect the payment of dividends to Singapore shareholders in either Singapore or US dollars, the company needs to ensure that it can secure the foreign currency for such payment.

Additional considerations

A potential Vietnamese issuer in which the State has a controlling stake or which is regulated by specific governmental authorities such as the State Bank of Vietnam may need to seek additional approval for its proposed Singapore listing and also in respect of its post-listing obligations on the SGX-ST and proposed changes in its organizational or management structure in connection with the Singapore listing.


In summary, Vietnamese companies need to weigh the benefits and costs of listing overseas in light of their plans and goals. Discussions with lawyers, independent accountants and other professional advisors will also provide the companies with a better understanding. For more information on listing in Singapore, please also refer to the websites of the MAS and the SGX-ST The authors will be happy to assist if you have further inquiries on your company’s plans for a public offering in Singapore.-


Regulations in the making

v The National Assembly Standing Committee has recently summarized and reported on proposals of ministries and sectors on the development, passage or modification of 58 laws concerning operations of the market economy during 2011-16, including those on supports for small- and medium-sized enterprises, foreign trade management, management of treasuries, business registration, real estate registration, property auction services, management of prices (in replacement of the ordinance on prices), agriculture, deposit insurance, use of state capital for business purposes, etc. 

v Director of Tax Policy Department Vu Van Truong has recently told the press that the Ministry of Finance plans to make in 2011 an import duty cut of 1-6 per cent for 924 commodity items, first of all farm and fishery products, construction materials, home electronic appliances. Most of these products will enjoy an import duty rate reduction of 2-3 per cent.

The import tariff cut is made in compliance with Vietnam’s WTO accession commitments.

v The “next generation” of securities regulations: As announced by the State Securities Commission (SSC) on February 17, it plans to finalize and promulgate new regulations to promote some new operations and commodities in the securities market in 2011, including a circular guiding financial prudent ratios; a circular providing for the opening of many accounts by a single trader, purchase and sale of a type of securities on the same trading day, mechanism for account proxy, margin trading and purchase of odd lots of stocks; and new or tighter financial regulations on merger or consolidation of securities trading institutions, and on open-end funds, real estate funds and exchange-traded funds.

Exchange-traded funds (ETFs) constitute an increasingly popular tool for foreigners investing in the Vietnamese stock market and came to public attention when the VN-index of Ho Chi Minh City Stock Market (HoSE) was strongly supported by only a handful of blue-chip stocks despite a general downward trend. However, to date there has been no official report on ETFs that track VN-index. 

The SSC requires securities companies to concentrate efforts on concentrating their risk management systems and enhancing the internal control in their operations.

The SSC will also set out higher benchmarks and conditions for listing on the stock exchanges in the direction of increasing the minimum charter capital for listing (VND 120 and 30 billion on HoSE and Hanoi Stock Exchange (HNX), respectively, against current VND 80 and 10 billion), publicity, healthy finance criteria and information disclosure responsibility of public companies.

It will this year consider the establishment of a fourth market in addition to HoSE, HNX and UPCoM, and improve the securities depository registration system and the depository center will monitor traders’ accounts and deal with any abuse of their accounts. 

v The Information and Communications Ministry plans to gather suggestions of enterprises, agencies and organizations to amend Decree No. 97/2010/ND-CP on management of Internet services in 2011. 

At the same time, it will propose to the Government five groups of long-term measures to enhance the state management of Internet service providers, especially those involved in the commercial provision of games online, promote the development of telecommunications infrastructure, meet requirements of the control of information contents, ensure information safety and security and limit negative impacts on the Internet on society and the youth.

v Under Government Resolution No. 60/NQ-CP of December 17, 2010, on administrative procedure reforms in the banking sector, a great number of administrative procedures for licensing the establishment and operation, own capital and voluntary termination of operation of branches of domestic commercial banks will be pruned or simplified.

Many administrative procedures related to operations of Vietnam-based foreign and joint-venture credit institutions, including extension of the operation duration of Vietnam-based representative offices of foreign credit institutions, transfer of contributed capital portions among parties to joint-venture banks or capital contributors to wholly foreign-owned banks or to new partners outside their banks, will also be trimmed.       

v At a recent seminar on derivative products jointly organized by the State Bank and HSBC Vietnam, financial experts opined that though derivative financial tools (financial contracts closely related or derived from such financial tools as stocks, bonds, securities indexes, interest or exchange rates) have been legally permitted by the State Bank for use by commercial banks and enterprises to shield against market-induced financial risks, regulations facilitating the access to and application of these tools, especially by small- and medium-sized enterprises, remain insufficient and inappropriate to practical developments of the domestic monetary market.     

They also stressed the necessity to develop the monetary market and banking standards and governmental bond yield curve for monetary market participants to operate on an equal footing and uniform principles, and to conduct intensive communication to raise the business community’s awareness about market elements and benefits of derivative tools.

v Despite possible inconsistency between Vietnamese law and laws of countries hosting Vietnamese investment projects funded by the Vietnamese State, the prime requirement on amendments to Decree No. 78/2006/ND-CP, dated August 9, 2006, on offshore direct investment, is always that these projects should be stricter managed to guarantee the use efficiency of state capital.

Investors argued that the proposed amendment to Decree No. 78 to obtain this target that Vietnamese law on bidding for procurements, consultancy and construction for these projects will be applied might be impossible if foreign joint-venture parties to these projects are not convinced.

Drafters therefore proposed the addition of a chapter laying down a principle that all overseas direct investment projects funded by the Vietnamese state budget must comply with Vietnamese laws on management, investment and use of state capital.

There will be also new provisions on powers and responsibilities of agencies approving investment projects in the direction of creating favorable conditions for investors and concurrently facilitating supervision and control of efficiency of invested state capital by Vietnamese state authorities.  

v In a recent interview with the Vietnam Economic Times, former Planning and Investment Minister Tran Xuan Gia proposed five measures to improve operational effectiveness of state economic groups, including: (i) to establish and empower a sole authority to uniformly manage large state enterprises, including specialized economic groups, which may be a ministry powerful enough to manage and supervise state ownership at enterprises; (ii) to re-determine strategic objectives and “mission” of economic groups for the next 5-10 years, so that each group will become a globally competitive enterprise and rank among 20 leading enterprises in the region in the relevant industry or sector in terms of technology, capital, asset value, modern production process, product competitiveness, international market share and business administration; and not to assign these groups to perform public-utility and market regulation tasks which may affect the efficient use of their resources; (iii) to revaluate accurately both tangible and intangible assets of enterprises and to restructure them in all aspects towards proper performance of key tasks; (iv) to establish a transparent administration information system and an effective surveillance system from production and business units to executive boards, boards of directors and authorities representing the state ownership; and to develop an effective internal control system to control finance and business operations and to control and manage risks according to internationally accredited good management practices; and (v) to make public and transparent information at least according to standards presently applied to listing companies on the security market, and to request state corporations and economic groups to annually make consolidated financial statements and reports on assessment of the achievement of strategic objectives, and have them audited according to international standards before submitting to the National Assembly and publicizing them.-

[1] Supra note 2.

[2] Ibid.

[3] Article 17.3 of Decree 14/2007/ND-CP.

[4] Circular 09/2010/TT-BTC of January 15, 2010, of the Ministry of Finance (Circular 09), effective on March 1, 2010.

[5] Internal shareholders include those shareholders who are members of the board of management, members of the inspection committee, the director or general director, the deputy director or deputy general director, or the chief accountant, etc., and their “related persons” as defined under the Law on Securities.


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