COUNTRY UPDATE-Vietnam: Securities & Banking

The State Bank of Vietnam (Ngan hang Nha nuoc Viet Nam, SBV) is the central bank of Vietnam. It is a ministry-level body under the administration of the government. The SBV governor is a member of the cabinet. The prime minister and the parliament of Vietnam (National Assembly) act jointly to nominate the governor of the SBV. The SBV's principal roles are to:
" Support monetary stability and implement monetary policies.
" Support institutions' stability and supervise financial institutions.
" Support banking facilities and recommend economic policies to the government.
" Support banking facilities for financial institutions.
" Manage the country's foreign exchange reserves.
" Manage foreign exchange and gold trading activities.
" Manage the borrowing and repayment of foreign loans, the provision of loans to foreign parties and recovery of foreign debts.
" Print and issue bank notes.
" Supervise all commercial banks' activities in Vietnam.
" Lend State money to commercial banks.
" Join the Ministry of Finance in issuing government bonds and government-guaranteed bonds.
" Act as an agent for the State Treasury in organizing bids and in issuing, depositing and making payment for treasury bonds and bills.
" Be in charge of other roles in monetary management and foreign exchange rates.
In 1990, the bank system was reorganized. This process led to a separation of the SBV from other commercial banks and was the start of the establishment of the private banking sector. A small number of major state-owned commercial banks still dominate Vietnam's banking sector.
According the Decision No. 22/2021/QD-TTg on classifying State-owned enterprises and state-owned enterprises undergoing divestment in the 2021 – 2025 period, the State will continue to hold at least 65% charter in state-owned commercial banks.
Up to date, based on publicly available information, the State ownership ratios in 4 largest state-owned commercial banks are as follows: (i) 80.9% in BIDV; (ii) 74.8% in Vietcombank; (iii) 64.46% in Vietinbank; and (iv) 100% in Agribank.
Foreign ownership restrictions for Vietnamese credit institutions
On January 3, 2014, the government adopted Decree No. 01/2014/ND-CP on the purchase by foreign investors of shareholding in Vietnamese credit institutions. Decree 01 became effective on February 20, 2014 and replaced Decree No. 69/2007/ND-CP on purchase by foreign investors of shareholding in Vietnamese commercial banks.
In Decree 01, Vietnamese credit institutions, which may offer shares, include:
" shareholding credit institutions (i.e., a credit institution established and organized in the form of a shareholding company and includes shareholding commercial banks, shareholding finance companies and shareholding finance leasing companies); and
" credit institution currently converting its legal form from a credit institution operating in the form of a limited liability company to a credit institution operating in the form of a shareholding company.
Foreign investors include foreign organizations (institutions) and foreign individuals. Foreign organizations include:
" organizations established and operating under the laws of a foreign country and any branch of such institutions overseas or in Vietnam; and
" an organization, closed-ended fund, members' fund or securities investment company established and operating in Vietnam with a foreign capital contribution ratio above 49%. Foreign individual means any person who does not hold Vietnamese nationality.
Decree 01 defines that shareholding ownership (shareholding) includes direct and indirect ownership. However, Decree 01 does not explain clearly the scope of direct and indirect ownership.
In the case of the purchase of shareholding by a foreign investor in a Vietnamese credit institution resulting in such foreign investor's ownership of shares below 5% charter capital of the Vietnamese credit institution, a prior approval of the SBV is not required. In other cases, any acquisition by foreign investors of shareholdings in a Vietnamese credit institution requires the prior approval of the SBV.
The shareholding ratio of any one foreign individual must not exceed 5% of the charter capital of one Vietnamese credit institution. The shareholding ratio of any one foreign organization must not exceed 15% of the charter capital of one Vietnamese credit institution.
Any foreign investor that is an organization owning 10% or more of the charter capital of any one Vietnamese credit institution is not permitted to assign the shareholding it owns to any other organization or individual within a minimum three-year period from the date of ownership of 10% or more of the charter capital in such credit institution.
The shareholding ratio of any one strategic foreign investor must not exceed 20% of the charter capital of one Vietnamese credit institution. The investor may not transfer its shares to the Vietnamese credit institution within five years after becoming a foreign strategic investor in the Vietnamese credit institution.
A strategic investor is defined as a foreign organization with financial capacity and whose authorized person provides a written undertaking to have a close connection regarding long-term interests with the Vietnamese credit institution and to assist the latter in transferring to modern technology, developing banking products and services, and raising its financial, managerial and operational capacity.
The shareholding ratio of any one foreign investor and its affiliates must not exceed 20% of the charter capital of one Vietnamese credit institution. The total shareholding ownership of all foreign investors must not exceed 30% of the charter capital of any Vietnamese commercial bank.
The total shareholding ownership of all foreign investors in any one Vietnamese non-banking credit institution shall be implemented in accordance with the law applicable to public companies and listed. When there are no specific regulations on the rate of foreign ownership, the maximum rate of foreign ownership will be 49% of the charter capital of such institution.
In a special case, in order to implement restructuring of a credit institution that is weak and/or facing difficulties, in order to ensure the safety of the credit institution system, the Prime Minister may, on a case-by-case basis, make a decision on the total shareholding ratio of any one foreign organization or any one foreign strategic investor, and the total level of shareholding of foreign investors in any weak shareholding credit institution which is restructured, in excess of the limits described above.
Under the Government's instruction in 2018, the Ministry of Finance (MoF) is required to draft a Government decree to allow foreign ownership ratio in commercial banks in Vietnam up to 50%. However, this decree would only be finalized and adopted in the fourth quarter of 2019. However, at the time of writing, the Government has not published any decrees allowing for the 50% rate that foreign investors consider very attractive. Further, according to the latest draft of the decree amending Decree 01, for certain banks categorized as credit institutions required to receive transfers, the foreign ownership ratio can reach up to 49%.
Nevertheless, a point worth noting is that Vietnam committed in the EU-Vietnam Free Trade Agreement to: (i) increase the share ownership ratio of European investors to 49% in two Vietnamese banks (except the aforementioned four largest State-owned banks) in the next five years; and (ii) after five years, there will be no limitation on foreign ownership ratio in Vietnamese commercial banks for European financial institutions.
The Agreements were signed in June 2019 and the EU-Vietnam Free Trade Agreement came into force on August 1, 2020..
Foreign exchange regulations
The Ordinance on Foreign Exchange, which was enacted by the Standing Committee of the National Assembly in December 2005 and became effective in June 2006, and amended on March 18, 2013, regulates currency exchange activities in Vietnam. The government promulgated Decree No. 70/2014/ND-CP to provide guidelines for both the Ordinance on Foreign Exchange and its amendments on March 18, 2013.
Decree 70 became effective on September 5, 2014 and replaced Decree No. 160/2006/ND-CP dated December 28, 2006 to provide detailed implementation of the ordinance.
Decree 70 governs the foreign exchange activities of residents and non-residents in current transactions, capital transactions, foreign loan borrowing, use of foreign currency and provision of foreign exchange services, the foreign currency market and rates of exchange, and the management of import and export of gold in Vietnam.
With regards to foreign loan borrowing, the government has also promulgated Decree No. 219/2013/ND-CP dated December 21, 2013 on the management and repayment of offshore loans that are not guaranteed by the government. Decree 219 became effective on February 15, 2014 and replaced Decree No. 134/2005/ND-CP on the same subject.
Decree 219 governs all businesses that are incorporated under the Enterprises Law, credit institutions and foreign bank branches under the Law on Credit Institutions, and cooperatives and unions of cooperatives established and operating under the Law on Cooperatives.
Offshore loans under Decree 219 include loans from non-residents under loan agreements, deferred payment commodities sale and purchase agreements, entrusted loan agreements and debt instruments issuance agreements that are not guaranteed by the government. In general, foreign borrowing must comply with the regulations of, and is subject to, registration with the SBV.
However, Decree 219 does not state clearly that requirements and types of loans should be registered, or any licensing/registration procedures. These issues have been addressed by the SBV's guidelines i.e., Circular No. 12/2022/TT-NHNN dated September 30, 2022, providing certain guidelines on foreign exchange control in relation to foreign borrowing activities. Circular 12 came into effect on November 15, 2022 and replaced Circular No. 03/2016/TT-NHNN and its amending circulars. Circular 12 has helped to improve the legal framework for the management of the borrowing and repayment of enterprises in general and enterprises not guaranteed by the government. Some highlights of the Circular 12 are:
Loans made in the form of deferred payment for the import of goods no longer require registration with the SBV. However, the opening and use of bank accounts and remittance activities must comply with the requirements of Circular 03.
Loans subject to registration with the State Bank include: (i) mid-term and long-term foreign loans, except foreign loans arising from issuance of letter of credit of credit institutions or branches of foreign banks ; (ii) short-term foreign loans having a principal payment period extended for which the total term is more than one year; and (iii) short-term foreign loans which are not renewed but loans' outstanding principal amounts have not been fully repaid prior to or within 30 working days after one year from the date of first loan withdrawal.
Circular 12 has also extended the timeline to register the offshore loans and amendments to the registered offshore loans, from 30 days (as previously stipulated in Circular No. 03/2016/TT-NHNN) to 30 working days from the signing date of the loan agreement or amendment agreement, giving more time for the borrower to prepare to lodge the application dossiers to the SBV for the registration of offshore loans or the registration of any amendments to the registered offshore loans.
A borrower that is not a foreign-invested enterprise must open a bank account for the purpose of a foreign loan at the authorized banks in Vietnam. For foreign invested enterprises, they may choose to use a direct investment capital account (DICA) for the purpose of receipts and expenditures, with respect to the medium or long-term offshore loan(s). A DICA can be utilized by the borrower for the same purpose, regarding the short-term loan(s) in addition to its current offshore loan account(s).
If the schedule of loan disbursement, repayment or interest payment changes by less than 10 days from the schedule already registered with the SBV, the borrower must only notify the changes on the Website for management of foreign loans and repayments that are not guaranteed by the Government (www.sbv.gov.vn or www.qlnh-sbv.cic.org.vn), and does not need to register the changes with the SBV. However, if the schedule changes by more than 10 days, then reregistration with the SBV is required.
Circular 12 also allows notification to SBV (instead of change registration) with regards to certain corporate changes of information that has been registered with SBV such as change (increase or decrease) in the amount of capital withdrawal, repayment of principal, interest, and fees within 100 currency units of the foreign loan currency compared with the corresponding content as previously certified by the SBV, change of address of the borrower within the province/city where it has headquarter, or change of trade names of the relevant banks who provide account services, etc.
The government issued Decree No. 88/2019/ND-CP on November 14, 2019 on sanctions of administrative violations in the field of monetary and banking operations. Decree 88 became effective on December 31, 2019 and replaced (i) Decree No. 96/2014/ND-CP dated December 12, 2014; (ii) Decree No. 95/2011/ND-CP dated December 20, 2011; and (iii) Decree No. 202/2004/ND-CP dated December 10, 2004 on sanctions of administrative violations in the field of monetary and banking operations.
This decree was said to loosen forex and gold trading and relevant activities in Vietnam. According to this decree, monetary penalties in relation to gold and forex trading, price listing/payment/advertising in forex/gold, etc. were significantly reduced i.e., from VND 600 million (approximately $26,000) to VND 250 million (approximately $11,000). For instance, potential penalty for violations re: trading on gold bars without a license is only a warning for the first time getting caught or a possible penalty for violations re: forex activities conducted by credit organizations without licenses may be up to VND 250 million (approximately $11,000) which is about 3 times less than the amount stated in Decree 96. On another note, forex/gold relevant to trading violations may be confiscated and the certificate of registration for forex agent and business operation license of gold of relevant parties may be suspended or revoked.
Developments in securities regulation
In early 2007, the first Securities Law of Vietnam (No. 70/2006/QH11, 2007) came into effect, which consisted of 11 chapters and 136 articles (as amended on November 24, 2010). The Securities Law primarily covers domestic issues of Vietnam dong-denominated securities and is, therefore, limited to public issues of securities and does not apply to the private placement of unlisted securities. The term "securities" covers a wide range of valuable instruments, including:
" Stocks.
" Bonds.
" Warrants.
" Certificates.
" Put and call options.
" Futures contracts, irrespective of their form.
" Investment capital contribution contracts.
Specifically, the Securities Law governs:
" Public offerings of securities.
" Listings.
" Dealing.
" Trading.
" Investment in securities.
" Securities services.
The establishment and regulation of securities companies and investment funds
The Securities Law 2019's area of application considers the systems for trading of listed securities and the systems for trading of unlisted securities, organized and run by the Vietnam Stock Exchange (VSE) and its subsidiaries. The local regulator, the State Securities Commission (SSC), controls and supervises these systems; however, they are independent legal entities. The SSC is a State body that the Ministry of Finance oversees.
The Government and the MoF have issued several decrees, decisions and circulars to implement the Securities Law. Under the Securities Law, publicly offered securities in Vietnam have to be denominated in VND. A joint-stock company must satisfy the following requirements to offer its shares publicly for the first time, among others:
a) the contributed charter capital is at least 30 billion VND on the offering date according to the accounting books;
b) the company has profit over the last two years and has no accumulated loss on the offering date;
c) there is a plan for issuance and use of capital generated by the offering ratified by the General Meeting of Shareholders;
d) at least 15% of its voting shares have been sold to at least 100 non-major shareholders. If the issuer's charter capital is 1.000 billion VND or above, the ratio shall be 10%; and
e) before the offering date, the major shareholders have made a commitment to hold at least 20% of the issuer's charter capital for at least one year from the end of the offering.
On January 10, 2012, the MoF issued Decision No. 62/QD-BTC re: approval of the project plan for the restructuring of securities companies. This decision was known as a key in the master plan to renovate the stock market/sector, insurance market and securities companies which have been submitted to the Party Politburo by the MoF. According to this decision, securities companies shall be evaluated based on the available capital/risk/accumulated losses index and categorized into three groups (normal, control and special control).
The decision does not provide any clear restructuring plan but promulgates certain controlling methods and penalties applicable to securities companies not satisfying the required available capital/risk index such as disclosure/report requirements, supervising or license withdrawal. On February 28, 2019, the Prime Minister issued Decision No.242/QD-TTg, approving the plan for restructuring.
Decree No. 155/2020/ND-CP was issued on December 31, 2020 to provide guidelines for Securities Law 2019 and the Law amending certain articles of the Securities Laws on offers for sale of securities, listing, trading, business and investment in securities, and services in relation to securities and securities market. This decree abolished Decree No. 58/2012/ND-CP dated July 20, 2012 and Decree No. 60/2015/ND-CP dated June 26, 2015.
Decree 155 does not limit foreign ownership applicable to public companies engaging in business lines that do not have a foreign-ownership threshold in Vietnam, and allows foreign companies to invest in government and company bonds in Vietnam.
Public offerings
To open the procedure for public offering it is necessary to file an application in the form of a registration statement, which includes:
" The prospectus.
" The audited financial statements for the preceding two fiscal years.
" The issuer's constitutional documents and relevant corporate resolutions.
The main contents of a prospectus are prescribed in Circular No. 120/2020/TT-BTC dated December 31, 2020 of the MoF providing guidance on the listing of securities on stock exchanges. Foreign investors should be aware of the lack of fixed standards for financial statements and accounting in Vietnam, which can result in inconsistencies in financial reporting and quality levels.
Private placements
A private placement is defined in the Securities Law 2019 as an arrangement for offering securities to less than one hundred investors, not including professional securities investors or for offering to professional investors only.
Securities Law 2019 as amended by Law No. 56/2024/QH dated November 29, 2024 on amendents to Law on Securities, Law on Accounting, Law on Independent Audit, Law on State Budget, Law on Management and Use of Public Property, Law on Tax Administration, Law on PIT, Law on Natural Reserves, and Law on Penalties for Administrative Violation provides conditions for a private placement made by public companies as follows:
a) there is a decision of the General Meeting of Shareholders to ratify the plan for issuance and the plan for use of capital generated by the private placement with specific criteria and quantity of investor, number of shares, offer prices or rules for determination thereof;
b) the private placement of shares or convertible bonds is only available to strategic investors and professional investors; the private placement of warrant-linked bonds is only available to professional investors;
c) the transfer of privately placed shares, convertible bonds and warrant-linked bonds is limited to three years for strategic investors and one year for professional investors from the ending date of the private placement, except for transfer between professional investors, transfer under an effective court judgment or decision, arbitral decision and transfer due to inheritance as prescribed by law;
d) there is an interval of at least six months between two private placements of shares, convertible bonds, warrant-linked bonds; and
e) the ratio of holding of shares, conversion of bonds into shares and execution of warrants by foreign investors is conformable with law.
If an application file is incomplete and invalid, the competent State authority shall, within five days from the date of receipt of the application file for registration of a private placement of shares, provide its opinion in writing requesting the issuing organization to amend the file. The date of receipt of the valid and complete file shall be the date on which the issuing organization completes the amendment and addition to the file.
Within 15 days from the date of receipt of the valid and complete file for registration, the State authority provides notification to the registering organization and publishes on its website the private placement of shares of the registering organization. The issuing organization shall, within 10 days from the selling tranche completion date, submit a report on the results of the private placement to the competent State authority on the standard form annexed to Decree No. 155/2020/ND-CP.
Conditions for listing on the Vietnam Stock Exchange (which has two subsidiaries being Hanoi Stock Exchange and the Ho Chi Minh Stock Exchange)
A company may have its shares listed if:
a) it is a joint stock company whose contributed charter capital at the time of listing application is at least 30 billion VND according to the latest audited financial statement and its net worth is at least 30 billion VND according to the weighted mean of buying price of shares in the latest public offering as prescribed by this Decree, or the average reference price of shares traded on UPCOM over the last 30 sessions before the application is submitted or the weighted mean of buying price in the first offering of the equitized enterprise;
b) the GMS has approved the listed; shares have been traded on UPCOM for at least two years unless the applicant has made a public securities offering or equitized;
c) ROE of the year preceding the application year is at least 5% and the business performance of two years preceding the application year is profitable; there are no debts that have been overdue for more than one year up to the application date; there is no accumulated loss according to the latest audited annual financial statement or examined mid-year financial statement in case the application is submitted after ending date of the period covered by the mid-year financial statement;
d) unless the enterprise is equitized, the applying organization has at least 15% of voting shares being held by at least 100 shareholders other than major shareholders; in case the organization's charter capital is at 1000 billion VND or over, the ratio shall be 10%;
e) shareholders that are individuals, organizations represented by President of the Board of Directors, members of the Board of Directors, Chief Controller, Controllers, General Director/Director, Deputy Director/Deputy General Director, chief accountant, Financial Director and people holding equivalent managerial positions have a commitment to keep holding 100% of the shares they are holding for six months from the first trading date on the Stock Exchange and 50% of these shares for the next six months, not including the state-owned shares owned by these individuals;
f) the company and its legal representative have not faced penalties for two years before the application date for the violations specified in Article 12 of the Law on Securities; and
g) there is a securities company that provides listing advisory services unless the applying organization is a securities company.
Registration at Vietnam Stock Exchange (VNX)
Companies wishing to register to list securities must lodge an application file for registration for listing with the VNX. An application file for registration to list shares shall comprise the following key documents, among other things:
" general meeting of shareholders' approval;
" register of shareholders, as entered one month prior to the date of lodging the application;
" prospectus;
" undertaking of certain shareholders such as members of the board of management or board of controllers, the director (general director), deputy director (deputy general director) and the chief accountant of the company, etc. to hold 100% of the shares they own for six months from the date of listing and 50% of this number of shares for the following six months;
" certificate from the Securities Depository Centre confirming registration by the institution and deposit of the shares at such Centre; and
" written consent from the State Bank in the case of a shareholding credit institution.
The VNX/HOSE/HNX shall approve or refuse to approve an application for registration for listing within 30 days from the date of receipt of a complete and valid application file, and in a case of refusal shall specify its reasons in writing.
Decree No. 155/2020/ND-CP dated December 31, 2020 on foreign ownership in stock market
In April 2009, the Prime Minister issued Decision 55/2009/QD-TTg governing the purchase and sale of "securities in Vietnam's stock market". It stipulates the difference between local investors and foreign investors, in accordance with foreign-invested local investment funds. It also states the 49% rule. This means that local investment funds and local securities investment companies are considered foreign investors if foreigners hold more than 49% of the interest of a corporation.
The above limitation of 49% was removed on September 1, 2015 under Decree No. 60/2015/ND-CP, i.e., generally, there is no limitation on foreign ownership ratio except for "conditional" sectors. In particular, the limitation would be subject to the WTO commitments or other specific domestic law (e.g., the 30% cap in the banking sector). Under Decree 155, the above limitation is elaborated as follows:
Maximum foreign ownership ratio in a public company:
a) If the business lines of the public company are regulated by a treaty to which Vietnam is a signatory, the treaty shall apply;
b) If the business lines of the public company are regulated by regulations of law which specify foreign ownership ratio, these regulations shall apply;
c) If the business lines of the public company are on the list of restricted market access, regulations on the foreign ownership ratio of each category shall apply. If foreign ownership ratio limits are not specified in such regulations, the maximum foreign ownership ratio in the company shall be 50% of charter capital;
d) If the public company does not fall into any of the cases specified in Points a, b, c, there is no maximum limit for the foreign ownership ratio;
e) In case the public company has multiple business lines that are subject to different foreign ownership ratio limits, the foreign ownership ratio must not exceed the lowest limit among them; and
f) In case the public company imposes a foreign ownership ratio limit that is lower than that specified in Points a, b, c, d and e, it must be approved by the GMS and specified in its charter.
Foreign investors may invest without limits into debt instruments of the Government, government-backed bonds, municipal bonds, corporate bonds, fund certificates, shares of investment companies, derivative securities, DRs and secured warrants unless otherwise prescribed by relevant laws.
Circular No. 51/2021/TT-BTC dated June 30, 2021
At the end of 2008, two years after the first Securities Law, the SSC and the MoF enacted Decision 121/2008/QD-BTC to make the market more interesting for foreign investment as well as to penalize those who disobey the Securities Law. Decision 121 governed the activities of foreign investors in the Vietnamese securities market.
On December 6, 2012, the MoF adopted Circular No. 213/2012/TT-BTC governing foreign investors' activities in the Vietnamese securities market. Circular 213 became effective on February 15, 2013 and replaced Decision 121.
On August 18, 2015, the MoF issued Circular No. 123/2015/TT-BTC governing foreign investment activities in the Vietnamese securities market (became effective on October 1, 2015), to guide Decree 60 and replace Circular 213. On 16 August 2021, Circular 123 was replaced by Circular No. 51/2021/TT-BTC of 2021.
Circular 51 provides detailed documents and procedures for foreign investors to operate in Vietnam's stock exchanges. The circular streamlines the procedures for market participation of foreign investors in Vietnam's stock market by reducing the amount of necessary documentation and simplifying the procedure. For example, the circular removes the need to translate documents into Vietnamese by allowing them to be submitted in English.
The circular sets out that foreign investors are required to apply for the Securities Trading Code (STC) before trading shares, bonds or other types of securities under the securities market regulations.
Notification procedure on foreign ownership limits (FOL)
Circular 155 requires that public companies are responsible for determining the applicable FOL. Following the determination of the FOL which is applicable to them, companies must file a notification dossier with the State Securities Commission (SSC). This dossier includes: (i) extracted information on business lines as uploaded on the National Business Registration Portal and the electronic address linking to such information; and (ii) Minutes of Meeting and the Resolution of the Board of Management approving the unrestricted FOL (if the company does not wish to maintain an FOL) or Minutes of Meeting and the Resolution of the General Shareholders' Meeting approving and the charter providing for the specific FOL (if the company wishes to maintain FOL).
The SSC will have seven working days to acknowledge in writing the notification on FOL.
Futher Amendment to Securities Law 2019 under Law No. 56/2024/QH15
On 29 November 2024, the National Assembly of Vietnam adopted Law No. 56/2024/QH15, amending several provisions of, among others, Securities Law 2019 ("Amendment Law").
The Amendment Law came into effect on 1 January 2025, with some provisions on professional securities investors and eligibility of public companies taking effect on 1 January 2026.
Under the Amendment Law, any foreign investors—regardless of business type, capital, or operating history—automatically qualifies as a professional securities investor (PSI). Consequently, foreign investors are no longer required to undergo the PSI status verification process.
Only institutional PSIs are permitted to buy and trade privately placed and unlisted bonds. Individual PSIs may only trade and transfer privately issued if they meet one of the following conditions: (a) the bonds have credit ratings and secured assets; or (b) the bonds have credit ratings and be underwritten by credit institutions.
New Law on Credit Institutions
On 18 January 2024, the National Assembly adopted Law on Credit Institutions No. 32/2024/QH15 ("CI Law") which took effect from 1 July 2024 and replaced the Law on Credit Institutions No. 47/2010/QH12.
The law reduces the permiitted ownership stakes for Vietnamese organisational shareholders (including indirect shareholders) from 15% of the charter capital of the credit institution to 10% and for individual shareholders and related persons from 20% to 15%. For shareholders whose shareholdings are higher than the new limit mentioned above, they are allowed to retain their shareholding but are not allowed to increase their shareholding until they have complied with the limit above, except when the increase is due to the distribution of dividend by shares.
The CI Law stipulates a 5-year roadmap for commercial banks and foreign banks to gradually reduce credit limits for a single customer (from 15% to 10% of their equity) and groups of single customers and related persons (from 25% to 15%) to minimise the concentration risk. The law also requires non-bank credit institutions to limit their credit exposure to not exceed 15% of their equity for a single customer or 25% for a group of single customers and related persons, starting July 1st, 2024.
The CI Law allows certain new business lines in the regulations on business activities of credit institutions. In particular, commercial banks and foreign bank branches are entitled to act as security agent on behalf of lenders that are international financial institutions, foreign credit institutions, local credit institutions and foreign bank branches.
This country profile was kindly provided by Dr. Oliver Massmann, general director of Duane Morris Vietnam LLC. Please do not hesitate to contact Dr. Oliver Massmann at omassmann@duanemorris.com if you have any questions.

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