What are the conditions to set up a securities company in Vietnam?

Nowadays, the need to establish a business increases day by day as the start-up trend started and grew strongly. On the other hand, securities and related business lines appeared to people and brought a promising future to entrepreneurs. A securities company is a type of conditional business company with specific and separate characteristics that only when it meets the conditions of the law can it conduct business. So, how do people set up a securities company? This article of LSX will answer the question: “What are the conditions to set up a securities company in Vietnam?”

Legal grounds

• Law on securities 2019
• Law on Investment 2020
• Decree 155/2020/ND-CP
• Circular 21/2012/TT-BCA
• Law on Enterprise 2020
• Circular 47/2019/TT-BTC
• Circular 121/2020/TT-BTC

What is a securities company?

Clause 1, Article 2 of Circular 121/2020/TT-BTC stipulates the securities company as follows:

Securities company means an enterprise licensed by the State Securities Commission to perform one or several operations as prescribed in Clause 1, Article 72, and Clauses 1, 2, 3, 4, 5, Article 86 of the Law on Securities.

Accordingly, a securities company is a limited liability company (LLC) or a joint-stock company established and operated under the Law on Securities and relevant laws. Securities companies are allowed to conduct one, several, or all business operations such as:

• Stockbroker;
• Securities trading;
• Underwriting securities;
• Securities investment consulting.

Additionally, securities companies may only provide other financial services in accordance with the provisions of the law after reporting them in writing to the State Securities Commission.

Conditions for securities company establishment

Owner

A securities company can only be organized in two forms: a limited liability company and a joint-stock company. The conditions for the owner of a securities company are prescribed by the Law on Securities as follows:

• Shareholders and capital contributors as individuals: not falling into cases that prohibited establishing and managing enterprises in Vietnam according to the provisions of the Law on Enterprises;
• Shareholders and capital contributors as organizations: must have legal status and operate legally; profitable business activities for 2 consecutive years before the year of application; the most recent annual financial statements must be audited with an approved opinion;
• Shareholders and capital contributors own 10% or more of the charter capital. Also, related persons of such shareholder or capital contributor (if any) do not own more than 5% of the charter capital of another securities company.

Furthermore, a securities company must have at least 02 founding shareholders and capital-contributing members as organizations. The total capital contribution ratio of the organizations is at least 65% of the charter capital in which organizations being insurance enterprises and commercial banks hold at least 30% of charter capital.

Business lines

According to Appendix IV of the Law on Investment, securities trading is one of 227 conditional business and investment lines and issues related to securities business activities such as business order, procedures, and conditions must comply with the provisions of the Law on Securities.
Under the Law on Securities, to establish a securities company, you must apply for a certificate to establish and operate securities businesses. Securities trading operations must comply with the provisions of the Law on Securities. At the same time, securities companies can only perform professional businesses with permission from the State Securities Commission.

Company name

The naming of securities companies must comply with the provisions of the Law on Enterprise 2020. The name of the securities company must not duplicate the registered enterprises, State agencies, units of the people’s armed forces, names of political organizations, socio-political organizations, socio-political-professional organizations, social organizations, or socio-professional organizations.
On the other hand, according to Clause 2, Article 82 of the Securities Law 2019, the order in the name of a securities company: Type of business – The phrase “security” – company name.

Head office

• Having a head office for securities trading activities;
• Having material bases, techniques, devices, office equipment, facilities, as well as technology systems suitable for the professional process of securities trading activities.

Capital

Enterprises wishing to conduct securities business must have an amount of charter capital at least equal to the legal capital as prescribed by law at the time of the establishment. According to the Law on Securities 2019, the charter capital of a securities company must be contributed in VND. The minimum charter capital is specified as follows:

• For securities brokerage: at least 25 billion VND;
• For securities trading: at least 100 billion VND;
• Securities underwriting: at least 165 billion VND;
• For securities investment consulting: at least 10 billion VND;
• Additionally, in case an enterprise applies for a license for more than one business operation, the minimum charter capital is the total capital corresponding to each operation in the application.

Seal

The seal means very important to the business. It represents the will of the company in every transaction. Therefore, the current law stipulates very strictly about the size and design of the seal.

The size and shape of the seal are specified in Circular 21/2012/TT-BCA as follows:

• Diameter: 36 mm;
• Outer rim above the seal: Enterprise number, business registration certificate number, establishment license number, operation, investment certificate number. After the sequence of numbers is the type of business: 100% foreign-invested enterprises, foreign joint-venture enterprises, joint-stock companies, limited liability companies, private enterprises, joint-venture companies, cooperatives, unions of cooperatives;
• Outer rim below the seal: Name of the district together with the name of the province where the head office is located;
• In the middle of the seal: The name of the organization using the seal.

LSX legal firm’s service on business 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.

Related articles

Conditions for securities company establishment in Vietnam

Procedure to set up a Joint-stock company under Vietnam’s Enterprise law

Conditions for foreign investors to establish securities companies

Related questions

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