I. Legal Basis

Decree No. 01/2024/ND-CP regulates the management of foreign investors’ capital in the commercial banking sector in Vietnam. The decree emphasizes that foreign investors are only permitted to own a maximum of 50% of the charter capital of commercial banks to mitigate risks and protect the rights of depositors. It also outlines detailed regulations regarding investment procedures, transparency requirements, and investment approval processes, facilitating the attraction of foreign investment in the banking sector while ensuring national financial safety.

II. Cases Where Foreign Investors Can Own More Than 50% of the Charter Capital of Commercial Banks in Vietnam

According to Clause 6, Article 7 of Decree No. 01/2024/ND-CP, foreign investors may be allowed to own more than 50% of the charter capital of a commercial bank in specific cases, as follows:

Restructuring Credit Institutions: Foreign investors may own more than 50% of a commercial bank’s charter capital if they are involved in special cases for restructuring weak or troubled credit institutions, ensuring the safety of the national credit institution system. This aims to assist banks in overcoming difficulties and becoming more efficient in their operations.

Decision of the Prime Minister: In exceptional cases, the Prime Minister may decide to allow foreign investors to exceed the 50% ownership limit in a commercial bank. This decision is typically based on factors such as the bank’s financial situation, the foreign investor’s capacity to provide support, and other factors affecting the bank’s safety and development.

III. Financial Conditions Required for Foreign Investors to Own More Than 50% of a Commercial Bank in Vietnam

According to Article 9 of Decree No. 01/2024/ND-CP, foreign investors must meet specific financial conditions to own more than 50% of a commercial bank’s charter capital in Vietnam. Firstly, investors must have sufficient legal capital to carry out the share purchase, ensuring that they have strong financial capability and that their funds comply with Vietnamese laws.

For investors that are banks, financial companies, or financial leasing companies, they must have total assets of at least 10 billion USD. This requirement ensures that large financial institutions can manage and support the operations of commercial banks in a competitive and risky market environment.

In cases where the investor is not a bank, financial company, or financial leasing company, the minimum charter capital requirement is set at 1 billion USD. This capital threshold aims to attract significant investors with financial potential, contributing to the stability and development of commercial banks in Vietnam.

IV. Can Foreign Investors Owning 50% of the Charter Capital of a Commercial Bank in Vietnam Become Executives of That Bank?

According to Article 13 of Decree No. 01/2014/ND-CP, foreign investors have full rights as shareholders in accordance with Vietnamese law and the charter of the credit institution. They may participate or appoint representatives to join the Board of Directors, Supervisory Board, and Executive Board of the joint-stock credit institution as stipulated in the charter.

Thus, a foreign entity owning 50% of the charter capital of a commercial bank in Vietnam can indeed become an executive of that bank.

V. About Us, Hankuk Law Firm

■ Hankuk Law Firm – Introduction

The goal of the legal services provided by HANKUK LAW FIRM is to support businesses, investors, and people. Our organization employs skilled Korean lawyers, partners, and professionals to provide legal services to businesses related to corporations and litigation.

To support the startup process, our lawyers and staff provide a wide range of services, including business law consulting, tax and immigration law consulting, real estate services, business consulting, marketing and communications, human resources, product distribution, franchise options, etc. We provide expert advice on every aspect of your business needs.

To protect the legitimate rights and interests of our clients and achieve the best results, we provide legal advice and participate in civil lawsuits related to business, labor, marriage, family, and inheritance.

■ Contact us now

For reliable and effective legal advice, please contact HANKUK LAW FIRM now. We are committed to providing you with the best possible answers and our team of experienced lawyers has extensive knowledge in many legal fields. We are always here to provide the most competent and dedicated support, whether you are dealing with contractual issues, commercial disputes or need guidance on foreign investment. HANKUK LAW FIRM is honored to have assisted hundreds of domestic and international clients in skillfully resolving complex legal issues as their trusted legal partner. Do not let legal issues hinder your success. Let us accompany you towards legal achievement and comfort. For prompt guidance and support to ensure your rights are always maintained at the highest standards, contact HANKUK LAW FIRM now.

■ Contact Hankuk Law Firm

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