Vietnam to remove foreign ownership cap for listed companies

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Hanoi Stock Exchange, one of Vietnam’s two major bourses © Arno Maierbrugger

Vietnam’s government is considering lifting the foreign stake holding limit for listed companies from the current 49 to 100 per cent in a bid to attract more foreign stock investment, Vietnam Net reported.

The proposal was made in the revised draft securities law, which has been made public recently by the State Securities Commission for comment before being submitted to the National Assembly for approval due in the last quarter of 2019.

Under the draft law, there will be no cap on foreign ownership at the companies, except for some cases which relate to either international treaty with Vietnam being a member or other specialised laws regulating lower foreign ownership limits.

Under the current law, foreign investors are permitted to hold 49 per cent of public companies’ charter capital at the maximum. If the companies want to lift the ratio to 100 per cent, they have to get approval from its shareholders.

According to experts, besides easing foreign investments in the listed companies, the new regulation, if being approved, will also help shares of many Vietnamese companies to be qualified to join the Morgan Stanley Capital International (MSCI) index of emerging markets.

Regulations on foreign ownership limits are also considered main causes hindering Vietnam’s stock market to have its status upgraded from a frontier market to an emerging market.

However, for state-owned enterprises conducting public offers of shares in order to equitise, the foreign ownership ratio must comply with the laws on equitisation.

Foreign investors are entitled to conduct unrestricted investment in government bonds, government guaranteed bonds, local authority bonds and enterprise bonds, except when the laws or the issuing organisations have some other provisions.

Foreign investors are also entitled to conduct unrestricted investment in certificates of securities investment funds, shares of securities investment companies, shares without voting rights of public companies, derivative securities, and depository receipts, except when the charter of the issuing organisation has other provisions.

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Reading Time: 2 minutes

Hanoi Stock Exchange, one of Vietnam’s two major bourses © Arno Maierbrugger

Vietnam’s government is considering lifting the foreign stake holding limit for listed companies from the current 49 to 100 per cent in a bid to attract more foreign stock investment, Vietnam Net reported.

Reading Time: 2 minutes

Hanoi Stock Exchange, one of Vietnam’s two major bourses © Arno Maierbrugger

Vietnam’s government is considering lifting the foreign stake holding limit for listed companies from the current 49 to 100 per cent in a bid to attract more foreign stock investment, Vietnam Net reported.

The proposal was made in the revised draft securities law, which has been made public recently by the State Securities Commission for comment before being submitted to the National Assembly for approval due in the last quarter of 2019.

Under the draft law, there will be no cap on foreign ownership at the companies, except for some cases which relate to either international treaty with Vietnam being a member or other specialised laws regulating lower foreign ownership limits.

Under the current law, foreign investors are permitted to hold 49 per cent of public companies’ charter capital at the maximum. If the companies want to lift the ratio to 100 per cent, they have to get approval from its shareholders.

According to experts, besides easing foreign investments in the listed companies, the new regulation, if being approved, will also help shares of many Vietnamese companies to be qualified to join the Morgan Stanley Capital International (MSCI) index of emerging markets.

Regulations on foreign ownership limits are also considered main causes hindering Vietnam’s stock market to have its status upgraded from a frontier market to an emerging market.

However, for state-owned enterprises conducting public offers of shares in order to equitise, the foreign ownership ratio must comply with the laws on equitisation.

Foreign investors are entitled to conduct unrestricted investment in government bonds, government guaranteed bonds, local authority bonds and enterprise bonds, except when the laws or the issuing organisations have some other provisions.

Foreign investors are also entitled to conduct unrestricted investment in certificates of securities investment funds, shares of securities investment companies, shares without voting rights of public companies, derivative securities, and depository receipts, except when the charter of the issuing organisation has other provisions.

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