Dossier to establish a joint venture bank a bank with 100% foreign capital
Dossier to establish a joint venture bank, a bank with 100% foreign capital. What is a joint venture bank? What is a bank with 100% foreign capital? Conditions for licensing the establishment of a joint venture bank, a bank with 100% foreign capital. Let us learn about this topic with LSX Law firm below:
Legal grounds
– Law on credit institutions 2010, amended and supplemented in 2017
– Circular No. 40/2011/TT-NHNN
– Circular No. 28/2018/TT-NHNN
– Circular No. 25/2019/TT-NHNN
What is a joint venture bank? What is a bank with 100% foreign capital ?
According to Clause 4.5, Article 2 of Circular No. 40/2011/TT-NHNN explains the terms as follows:
Specifically, a bank with 100% foreign capital is a commercial bank; established in Vietnam; with 100% charter capital owned by foreign credit institutions; it is also a Vietnamese legal entity with its head office in Vietnam. Banks with 100% foreign capital; established and organized in the form of single-member limited liability companies; whose owner is a foreign bank; or a limited liability company with two or more members. Also there must be a foreign bank owning 50% of the charter capital.
Besides, a joint venture bank is a commercial bank, established in Vietnam; by a capital contribution of the Vietnamese Party (including one or more Vietnamese banks) and the Foreign Party (including one or more foreign banks); based on a joint venture contract; is a Vietnamese legal entity with its head office in Vietnam. A joint venture bank, established or organized in the form of a limited liability company with two or more members but not more than 05 members, in which a member and a related person may not own more than 50% of the charter capital.
Conditions for licensing the establishment of a joint venture bank, a bank with 100% foreign capital
According to the provisions of Article 10; Circular No. 40/2011/TT-NHNN as follows:
Condition 1:
The conditions specified in Clause 2, Article 20 of the Law on Credit Institutions 2010, the Law on amendments and supplements to 2017.
Condition 2:
Conditions for founding members, owners being foreign credit institutions:
Firstly, no serious violations of regulations on banking activities and other legal regulations of the country of origin within 05 consecutive years preceding the year of submitting the application for the License and up to the date of issuance of the License;
Secondly, having experience in international operations, being rated at stable level or higher by international credit rating agencies, capable of fulfilling financial commitments and operating normally even when the situation, conditions economic conditions change in an unfavorable direction;
Thirdly, being profitable for five consecutive years preceding the year of submitting the application for a License and up to the time of granting the License;
Moreover, have total assets equivalent to at least US$10 billion at the end of the year immediately preceding the year in which the application for a License is submitted;
Furthermore, being assessed by the competent authority of the country of origin to ensure the capital adequacy ratio; other safety ratios; fully comply with regulations on risk management and complete provisioning; also under the regulations of the country of origin in the year immediately preceding the year in which the application for the License is submitted and up to the time of issuance of the License;
In addition, not being the owner, founding member, or strategic shareholder of another Vietnamese credit institution.
Condition 3:
Founding members of a joint venture bank, a Vietnamese commercial bank, must satisfy the conditions specified at Points a, b, c, g, Clause 2, Article 9 of Circular No. 40/2011/TT-NHNN.
Condition 4:
Within 05 years from the date of issuance of the License, the founding members must jointly own 100% of the charter capital of the joint-venture bank, the bank with 100% foreign capital.
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Dossier to establish a joint venture bank, a bank with 100% foreign capital
Accordingly, article 16 of Circular No. 40/2011/TT-NHNN stipulating that the application file for a license for establishment and operation of a joint-venture bank or a bank with 100% foreign capital includes:
– Firstly, the composition of the dossier is as prescribed in Article 14 of Circular No. 40/2011/TT-NHNN
– Secondly, a profile of the owner, founding members being foreign credit institutions:
– Thirdly, the profile of the founding member of a joint venture bank being a Vietnamese commercial bank includes the papers and documents specified at Point b, Clause 3, Article 15 of this Circular, except for the share purchase application.
– Fourthly, the joint venture contract has the main contents as prescribed by law; capital contribution agreements between founding members for banks with 100% foreign capital;
– Moreover, the document of the competent authority of the country of origin committing to ensure the ability to supervise all activities of foreign banks (including operations of joint-venture banks, banks with 100% capital). foreign countries in Vietnam) based on consolidation according to international practices.
– In addition, the written commitment of the owner and founding members to:
Ready to support in finance, technology, administration, operation, and operation for joint venture banks, banks with 100% foreign capital;
Ensure to maintain the actual value of the charter capital of the joint-venture bank, the bank with 100% foreign capital, not lower than the legal capital level and fully meet the regulations on the safety of operation, according to the regulations of the State Bank.
– Finally, after receiving the written approval in principle, the Preparatory Board must submit several additional documents.
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Related questions
Firstly, the audited financial statements for 5 consecutive years preceding the year in which the application for a license is submitted does not contain an exception from the audit unit;
Secondly, copy of establishment and operation license or equivalent document;
Thirdly, the document of the competent agency of the country of origin providing information about the foreign credit institution;
Moreover, the organization and operation charter of the foreign credit institution;
In addition, report on the establishment, operation and development orientation of the foreign credit institution up to the time of submitting the application file for a License;
Finally, decision on appointment of representative of contributed capital at joint venture banks, banks with 100% foreign capital of foreign credit institutions in accordance with the law, enclosed with the passport of the representative of contributed capital.
Foreign bank branch is a dependent unit of a foreign bank, has no legal status, is guaranteed by the foreign bank to be responsible for all obligations and commitments of the foreign bank branch in Vietnam. Male.
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