CAN FOREIGN INVESTORS OWN MORE THAN 50% OF THE CHARTER CAPITAL OF A VIETNAMESE COMMERCIAL BANK?

Legal basis:

– Decree No. 01/2024/ND-CP.

Cases where foreign investors are allowed to own more than 50% of the charter capital of Vietnamese commercial banks

According to Clause 6, Article 7 of Decree No. 01/2014/ND-CP, foreign investors own more than 50% of the charter capital of Vietnamese commercial banks in the following situations:

– In special cases to restructure weak credit institutions, facing difficulties, ensuring the safety of the credit institution system.

– The Prime Minister decided to allow foreign investors’ share ownership ratio to be more than 50%.

Financial conditions required for foreign investors to own more than 50% of the charter capital of a Vietnamese commercial bank

According to Article 9 of Decree 01/2014/ND-CP, in order to own more than 50% of the capital Charter of a Vietnamese commercial bank, foreign investors must meet the following financial conditions:

– Have enough capital to buy legal shares.

– If it is a bank, financial company or financial leasing company, it must have minimum total assets equivalent to 10 billion US dollars.

– If it is not a bank, financial company or financial leasing company, it must have a minimum charter capital equivalent to 1 billion USD.

Can a foreign investor owning 50% of the charter capital of a Vietnamese commercial bank become the operator of that bank?

According to Article 13 of Decree No. 01/2014/ND-CP, foreign investors have full rights of shareholders according to the provisions of the Vietnamese law and the Charter of the credit institution.

At the same time, foreign investors are allowed to participate or appoint representatives to participate in the Board of Directors, Supervisory Board, and Executives of joint stock credit institutions according to the provisions of the Charter.

Thus, a foreign enterprise that owns 50% of the charter capital of a Vietnamese commercial bank can become the operator of that bank.