Many businesses are now focusing on the insurance business. This profitable industry attracts entrepreneurs with a promising future. However, the Vietnamese government strictly regulates this conditional business line. To establish an insurance business, you need permission from competent authorities. So, in this article, LSX legal firm will give you an insight into: “Licensing authorities for insurance companies in Vietnam”
Legal grounds
- Decree 73/2016/ND-CP
- Law on Insurance Business 2010
Conditions for establishing an insurance company
General conditions
For investors:
Organizations and individuals investing in the incorporation of an insurance enterprise or insurance broker enterprise must satisfy the following requirements:
- Firstly, incur no prohibitions as defined in Section 2, Article 18 of the Law on Enterprise 2020.
- Secondly, investors must actualize their capital contributions in cash, which must not be financed by a loan or investment trust from other entities.
- Thirdly, corporate investors contributing to 10% or more of the charter capital required to have conducted a profitable business in 03 consecutive years immediately preceding the year that the application for licensing submitted and to have not incurred cumulative losses prior to the application for licensing.
- Fourthly, corporate investors conducting business lines that require legal capital must undertake that their owner’s equity less the minimum legal capital is at least equal to the planned amount of investment;
- Lastly, corporate investors such as insurance enterprises, insurance broker enterprises, commercial banks, financial enterprises, or securities enterprises must fulfill and maintain financial safety conditions and obtain permission from competent authorities to make the said investments as per specialized laws.
For units intended to set up insurance enterprises, foreign branches, and insurance broker enterprises:
- Firstly, have the charter capital (for insurance enterprises and insurance broker enterprises) or allocated capital (for foreign branches) at least equal to the legal capital according to Article 10 of Decree 73/2016/ND-CP.
- Secondly, have incorporated the type of business and charter (for insurance enterprises and insurance broker enterprises) or the regulation of organization and operation (for foreign branches) in conformity to this Decree and relevant laws;
- Thirdly, have planned managerial and operational personnel in conformity to 73/2016/ND-CP.
Requirements for the establishment of insurance enterprises organized as a limited liability business
founding investors of an insurance enterprise organized as a limited liability business must be organizations that meet the following requirements:
- Firstly, trade in insurance abroad and have been permitted by foreign competent authorities to conduct expected business lines in Vietnam, or act as an outward investing subsidiary of a foreign insurance enterprise and have been mandated by the foreign insurance enterprise to invest in the incorporation of an insurance enterprise in Vietnam.
- Secondly, have operated for at least 10 years in the sector of business in which they intend to engage in Vietnam;
- Thirdly, have a total worth of assets of at least 02 billion US dollars in the year immediately preceding the year that the application for licensing submitted;
- Fourthly, have not seriously violated any laws on the insurance business and other legal regulations of the home country for 03 consecutive years immediately preceding the year that the application for licensing submitted.
b) Vietnamese organizations:
- Firstly, trade in finance, banking, or insurance;
- Secondly, have a total worth of assets of at least 2,000 billion Vietnam dongs in the year immediately preceding the year that the application for licensing submitted.
Requirements for the establishment of insurance enterprises organized as a joint-stock business
An insurance enterprise organized as a joint-stock business must meet the following requirements:
- At least 02 of its founding shareholders are organizations, which meet the requirements stated in Section 1, Article 7 of Decree 73/2016/ND-CP and together hold at least 20% of shares in the insurance joint-stock company to be incorporated;
- In 03 years after licensing, founding shareholders must together hold at least 50% of authorized ordinary shares in the insurance joint-stock company.
Procedure for licensing of establishment and operation for insurance business
Step 1: Submit the application for licensing
The application for licensing shall consist of 01 set of original documents and 02 sets of copies. The documents in each set of the application for licensing by a foreign entity shall include 01 original (or copy) in English or 01 translated copy in Vietnamese.
Documents in the application for licensing, which bear signatures, titles, and seals of foreign entities, must be consular legalized. Copies and translated copies in Vietnamese must be endorsed by Vietnamese notary agencies as per the law on notarization. Applicants shall be held liable for the accuracy of their application for licensing.
Step 2: Receive and process the application
- In 21 working days upon receiving an application for licensing, the Ministry of Finance shall notify in writing of its request for amendments to the inadequate and invalid documents.
- The investor has 06 months upon such notification to revise and supplement the documents. If the investor fails to revise and supplement the application in the defined time, the Ministry of Finance shall reject the application in writing.
Step 3: Receive the result
- In 60 days upon receiving the valid and adequate application, the Ministry of Finance shall issue the license to the insurance enterprise, foreign branch, or insurance broker enterprise.
- In case of rejecting the application, the Ministry of Finance shall provide explanations in writing. Ministry of Finance shall only refuse to license investors or insurance enterprises, foreign branches, or insurance broker enterprises being incorporated if they fail the requirements for licensing according to Decree 73/2016.
Licensing authorities for insurance companies in Vietnam
According to Article 62 of the consolidated document 06/VBHN-VPQH in 2019 consolidating the Law on Insurance Business, the authority to issue establishment and operation licenses:
- The Ministry of Finance shall grant establishment and operation licenses to insurance enterprises in accordance with this Law and other relevant laws.
- The granting of establishment and operation licenses to insurance enterprises must comply with the planning and orientation plans for the development of the insurance market and the financial market of Vietnam.
Legal service of LSX Legal Firm
LSX legal firm provides legal services to clients in various legal areas. To make your case convenient, LSX will perform:
- Legal advice related to new regulations;
- Representing in drafting and editing documents;
- We commit the papers to be valid, and legal for use in all cases;
- Represent to submit documents, receive results, and hand them over to customers.
With a team of experienced, reputable, and professional consultants; The firm is always ready to support and work with clients to solve legal difficulties.
Furthermore, using our service, you do not need to do the paperwork yourself; We guarantee to help you prepare documents effectively and legally.
Also, you will not have to waste time preparing the application, submitting application, or receiving results. At those stages, we will help you do it smoothly.
After all, LSX provides the service with the desire that customers can experience it the best way. Additionally, we guarantee the cost to be the most suitable and economical for customers.
Related articles
- Insurance regime of foreigners when participating in labor in Vietnam
- Conditions for establishing an insurance business in Vietnam
- Dossier of licensing of insurance LLC establishment in Vietnam
Related question
Insurance business, reinsurance business;
Preventing and limiting risks and losses;
Damage assessment;
Loss assessment agency, considering compensation settlement, requesting a third party to reimburse;
Fund management and capital investment;
Others operations prescribed by the law.
Firstly, head office;
Secondly, branches, operations centers, accounting dependent affiliates (referred to as branches) of the insurance enterprise or insurance broker enterprise shall carry out all or parts of the enterprise’s functions including mandated representation;
Thirdly, representative offices as dependent units of the insurance enterprise or insurance broker enterprise shall carry out mandated representation for the enterprise’s interests and protection of such interests;
Fourthly, business facilities and transaction offices (referred to as business facilities) are the sites where the enterprise conducts specific business activities.
Provide the information on insurance types, conditions, terms, premiums and insurance enterprises to the buyers.
Provide advices to the buyers with regard to risk analysis, insurance choice, conditions, terms, fee schedules and insurance enterprises.
Negotiate and arrange insurance contracts between an insurance enterprise and a buyer.
Carry out other tasks in relation to the implementation of insurance contracts upon buyers’ requests.
Contact LSX
Finally, hope this article is useful for you to answer the question about “Licensing authorities for insurance companies in Vietnam”. If you need any further information, please contact LSX Law firm: +84846175333 or Email: [email protected]
Conclusion: So the above is Licensing authorities for insurance companies in Vietnam. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
