Conditions to establish a fund management firm under Vietnam legislation
A fund management firm is a type of intermediary company on finance, specializing in the establishment and management of fund investments. To establish a company of this kind, owners have to satisfy the regulations of relevant business lines. What are they? LSX legal firm provides this article to answer the question: “Conditions to establish a fund management firm under Vietnam legislation”
Legal ground
- Law on Securities 2019
Business operations of a fund management firm
A fund management company may perform the following business operations:
- Management on securities investment fund: Securities investment fund is a fund formed from the contributed capital of investors to make profits from investing in securities or other forms of assets, including real estate, in which the investor has no daily control over the fund’s investment decision-making.
- Management on the portfolio of securities investment: The authorized management of each investor in the purchase, sale, and holding of securities and other assets.
- Securities investment consultancy: Provide investors with analysis results, publish analysis reports and recommendations related to securities.
Conditions to establish a fund management firm
According to the law on fund management companies, to establish a fund management company, organizations and individuals have to apply for an establishment and operation certificate. The certificate conditions include:
Headquarter and equipment
- The minimum term of the right to use the company’s headquarters is at least one year from the date on which the application for the establishment of the fund management company is complete and valid;
- Having sufficient facilities, office equipment, computer systems, software for investment analysis, risk analysis and management, store and preserve vouchers, documents, and equipment to ensure safety and security for the office.
Managers
Having a Director (General Director), Deputy Director (Deputy General Director) in charge of operations (if any) and satisfy regulations. Besides, there is at least five (05) professional staff with a fund management practice certificate.
Charter capital
In particular, the charter capital must be equal to the prescribed legal capital.
Shareholders, Members structure
- Having at least two founding shareholders/members being organizations that meet the regulations, and at least one of them must be a commercial bank, insurance, or securities enterprise. In case the fund management firm is organized in the form of a single-member limited liability company; the owner must be an insurance enterprise, a commercial bank, or a securities company;
- Founding shareholders and founding members being organizations must hold at least 65% of charter capital. Equally important, if the organizations are commercial banks, insurance enterprises, or securities companies; then they have to own at least 30% of the charter capital of the fund management company;
- Shareholders and capital contributors owning 10% or more of the charter capital of a fund management company and related persons of such shareholders/capital contributors must not own more than 5% of the charter capital of another fund management company.
Shareholders/Members as Individuals
- Not prohibited to establish and manage an enterprise in Vietnam according to the Law on Enterprise;
- Have the financial capacity that meets the regulations.
Shareholders/Members as Organizations
- Has legal status and is not in a state of consolidation; merger; separation; dissolution; bankruptcy. Also, not fall into cases where they are not legal to establish and manage an enterprise under the law on enterprises;
- Having operated for at least five preceding years before the year of contributing capital to establish a fund management company (2 years for commercial bank, insurance enterprise, or securities company).
- Have the financial capacity that meets the regulations.
LSX legal firm’s service on company establishment
When establishing a company, people must carry out the procedure following the law at the competent business registration authority (under the Law on Enterprise 2020). The process of establishing a business includes many different steps and phases. If you are not familiar with the law, this process may take a lot of time.
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.
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Related questions
The term to register to purchase securities is at least 20 days.
The issuance of securities is the initial offering of new securities.
Besides, Issuance of securities to the public is a public offering of securities to investors that are not the issuers to mobilize capital from the public.
Contact LSX
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