Conditions for foreign investors to establish securities companies

by HaTrang

Securities trading is a conditional business, especially for foreign investors who want to do securities business in Vietnam. Accordingly current regulations, the state may expand the scope of securities business to foreign investors, but basically foreign investors; who want to establish a securities company must be granted an establishment license; and activities of securities companies in Vietnam. So, what is conditions for foreign investors to establish securities companies, let’s find out with LSX Law firm.

Legal grounds

Law on Securities 2006, amended and supplemented in 2010;

Decree No. 58/2012/ND-CP dated July 20, 2012 of the Government detailing and guiding the implementation of a number of Articles of the Law on Securities and the Law amending and supplementing a number of Articles of the Law on Securities;

Decree No. 60/2015/ND-CP dated June 26, 2015 of the Government amending and supplementing a number of articles of

Decree 58/2012/ND-CP;

Decree No. 86/2016/ND-CP stipulating conditions for securities investment and trading.

Conditions of working office, facilities and equipment

Having a secure office for securities trading activities;

Having sufficient physical and technical foundations, office equipment, computer systems and software in service of investment analysis, risk analysis and management, archiving and preservation of documents and documents materials and equipment to ensure safety and security for the company’s headquarters under the guidance of the Ministry of Finance. For securities underwriting; and securities investment consulting, the conditions for equipment; and facilities are not required.

Capital conditions

The contributed capital at the time of establishment of the company is at least equal to the legal capital as prescribed in Clauses 1 and 2, Article 71 of Decree 58/2012/ND-CP. Accordingly, the legal capital for business operations of securities companies in Vietnam is:

  • Securities brokerage: 25 billion Vietnam dong;
  • Securities trading: 100 billion VND;
  • Underwriting of securities issuance: 165 billion VND;
  • Securities investment consulting: 10 billion Vietnam dong.

Besides, in case the organization applies for a license for many business operations; the legal capital is the total legal capital corresponding to each operation requested for a license .

Contributed capital to establish a securities business organization or branch of a foreign fund management company in Vietnam must be in Vietnam dong.

Personnel conditions

There is a tentative list of the company’s personnel, including at least 03 securities practitioners suitable for each business operation applying for a license for establishment and operation. There is a General Director (Director) of a securities company and must meet the following criteria:

  • Having full civil act capacity; not in the case of being examined for penal liability; or serving a prison sentence or banned from doing business by the court in accordance with law;
  • Having at least 03 years of experience working in professional departments in the fields of finance, banking, securities or in the finance, accounting and investment departments in other enterprises and having experience in operating management. at least 03 years;
  • Possess a Certificate of Financial Analysis Practice or Certificate of Fund Management Practice;
  • Have not been sanctioned; accordingly the law on securities and securities market; within the last 12 months up to the time of application submission;
  • There have never been any violations accordingly Point b, Clause 1, Article 80 of the Law on Securities.

Conditions on shareholders and capital contributors

The structure of shareholders and capital contributors meets the provisions of Clauses 5, 6, 7 and 10, Article 71 of Decree 58/2012/ND-CP, regulations for foreign investors in Clauses 21 and 24 of Article 71. 1 Decree 60/2015/ND-CP and must ensure:

Besides, at the time of establishment registration, the capital contributing organization has no accumulated loss on the most recent audited annual financial statement and the most recent reviewed semi-annual financial statement (if any);

In case a securities company is organized in the form of a single-member limited liability company ; the owner must be a commercial bank, insurance enterprise or a foreign organization that meets the requirements in Article 4 of the Decree.

Finally, hope this article Conditions for foreign investors to establish securities companies is useful for you.

If you have any questions please contact Lawyer X for quick and best legal services: +84846175333 or email: hoangson@lsx.vn.

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