REVIEW
of
FINANCE -
Jan. 2018
5
Investments in foreign bonds: Foreign
investors have invested in unlimited government
bonds, government guaranteed bonds, local
government bonds, corporate bonds, unless legal
Relevant or other issuer. In the case of issuance
of convertible bonds, the issuing organization
must ensure the foreign ownership when it is
due to be converted into shares or the time for
buying shares.
Foreign investors have unlimited investment
in securities investment fund certificates, shares
of securities investment companies, non-voting
stocks of public companies, derivative securities,
unless otherwise provided for by the charter of
the issuing organization. With the exception of
open funds, the securities investment fund has a
foreign ownership ratio of 51% or more, fulfilling
the conditions and procedures for investment in
accordance with regulations applicable to foreign
investors when making capital contribution,
securities purchase or capital contribution of
economic organizations.
Increasing ownership of foreign investors can
help increase the number of foreign investors
in the stock market, increasing the size of
the market. However, the challenge is the
competition of foreign enterprises with domestic
enterprises. This is an important legal basis for
further cooperation, promoting the development
of Vietnam’s financial market in the future.
Policy for the insurance market
To remove obstacles for insurance enterprises,
the Ministry of Finance issued Circular No.
50/2017/TT-BTC guiding the implementation of
Decree No. 73/2016/ND-CP dated July 1st The
Government shall detail the implementation
of the Law on Insurance Business and the Law
Amending and Supplementing a Number of
Articles of the Law on Insurance Business. In
particular, some remarkable content such as
Improvement of Financial market policy
About monetary policy
The National Assembly passed Resolution
No. 42/2017/QH14 and the Prime Minister issued
Decision No. 1058/QD-TTg, continuing to perfect
mechanisms and policies to support the handling
of bad debts; allowing for the application of many
new policies creates a more favorable legal basis
for the handling of bad debts, collateral assets
of credit institutions, foreign bank branches, bad
debt trading organizations; aiming to reduce the
number of weak credit institutions, consolidate
credit institutions of good size, prestige and
healthy operation; ensure liquidity and safety of
the system; step by step handle and eliminate the
situation of cross-investment, cross-ownership
and ownership of manipulation and dominance
in related credit institutions; promote divestment
outside the sector of commercial banks. However,
the process of restructuring credit institutions
has achieved initial results, maintaining stable
operation of the system in 2017, contributing
to macroeconomic stability. This task should
be accelerated from 2018 to implement the
Resolution of the National Assembly and the
Decision of the Prime Minister.
About policies for the stock market
On the foreign ownership ratio of a public
company: Where an international treaty to which
Vietnamis a contractingparty contains provisions
on foreign ownership, the international treaty
shall apply. In the case of public companies
operating in the lines of business of which
investment is concerned, the laws on investment
and relevant laws provide for the foreign
ownership ratio, the provisions of such law shall
apply. Where a public company operating in a
conditional investment business line does not
have a specific regulation on foreign ownership,
the maximum foreign ownership is 49%.
For SOEs conducting equitization in the
form of public offering of securities: Foreign
ownership shall be in accordance with the law
on equitization. Where there are no regulations
on equitization, this ratio shall be implemented
in accordance with the regulations on foreign
ownership in public companies.
In the passing days, Vietnam has step by step
opened the economy, connecting the domestic
market with the regional economy and
market through the establishment of bilateral
finance, trade and investment relations and
participating in multilateral institutions.
