| THE GOVERNMENT ----------- | SOCIALIST REPUBLIC OF VIET NAM Independence - Freedom - Happiness --------- |
| No: 69/2007/ND-CP | Hanoi , April 20, 2007 |
DECREE
ON FOREIGN INVESTORS' PURCHASE OF SHARES OF VIETNAMESE COMMERCIAL BANKS
THE GOVERNMENT
Pursuant to the December 25, 2001 Law on Organization of the Government;
Pursuant to the December 12, 1997 Law on the State Bank of Vietnam and the June 15, 2003 Law Amending and Supplementing a Number of Articles of the Law on the State Bank of Vietnam;
Pursuant to the December 12, 1997 Law on Credit Institutions and the June 15, 2004 Law Amending and Supplementing a Number of Articles of the Law on Credit Institutions;
Pursuant to the November 29, 2005 Law on Enterprises;
Pursuant to the June 29, 2006 Law on Securities;
Pursuant to Vietnam's international commitments;
At the proposal of the Governor of the State Bank of Vietnam,
DECREES:
Chapter I
GENERAL PROVISIONS
Article 1.- Governing scope
1. This Decree provides for foreign investors' purchase of shares of Vietnamese commercial banks (below referred to as Vietnamese banks for short) which are not yet listed on the securities market.
2. When a Vietnamese bank is listed on the securities market, foreign investors may purchase shares of that bank in accordance with the law on securities and securities market and shall comply with shareholding percentages specified in Article 4 of this Decree.
Article 2.- Subjects of application
1. Vietnamese banks, including:
a/ Equitized state-owned commercial banks;
b/ Joint-stock commercial banks.
2. Foreign investors.
3. Other organizations and individuals involved in foreign investors' purchase of shares of Vietnamese banks.
Article 3.- Interpretation of terms
1. In this Decree, the terms below are construed as follows:
1. "Foreign investors," including:
a/ "Foreign organization" means an organization which is set up under foreign law and operates and conducts business activities in a foreign country or/and in Vietnam;
b/ "Foreign individual" means a person of foreign nationality who resides in a foreign country or in Vietnam.
2. "Foreign credit institutions" means foreign organizations, including foreign banks, foreign financial companies and other foreign financial organizations, which operate mainly and regularly in the banking domain.
3. "Existing foreign shareholder" means a foreign investor that is allowed by the State Bank of Vietnam to purchase shares and that owns shares of joint-stock commercial banks before the effective date of this Decree.
The benefits and obligations of existing foreign shareholders must comply with regulations of the State Bank of Vietnam.
4. "Foreign strategic investor" means a foreign credit institution which has prestige, financial capacity and ability to assist Vietnamese banks in developing banking products and services, raising administration capacity and applying modern technologies; and which has strategic interests conformable with Vietnamese banks' development strategies and meets specific criteria set by Vietnamese banks.
5. Affiliated persons of an organization or individual, including:
a/ The parent company of that organization or company under the same parent company of that organization;
b/ The parent company-managing person or organization, person or organization competent to appoint manager of the parent company of that organization;
c/ Dependent company or subsidiary company of that organization;
d/ Manager, Control Board's member, person or organization competent to appoint manager of that organization;
e/ Shareholder or shareholder group that owns 10% or more of the total common shares of that organization;
f/ Husband, wife, father, adoptive father, mother, adoptive mother, child, adopted child, and sibling (and their spouses) of a manager, Control Board's member or shareholder that owns 10% or more of the total common shares of that organization;
g/ Husband, wife, father, adoptive father, mother, adoptive mother, child, adopted child, and sibling (and their spouses) of that individual;
h/ Individuals authorized to represent the persons defined at Points a, b, c, d, e, f and g of this Clause for the authorizing persons and affiliated persons of the authorizing persons and authorized persons.
Article 4.- Shareholding principles applicable to foreign investors
1. The maximum shareholding percentage for foreign investors (including existing foreign shareholders) and their affiliated persons is 30% of the charter capital of a Vietnamese bank.
2. The maximum shareholding percentage for a foreign investor other than foreign credit institution or his/her/its affiliated person is 5% of the charter capital of a Vietnamese bank.
3. The maximum shareholding percentage for a foreign credit institution and its affiliated person is 10% of the charter capital of a Vietnamese bank.
4. The maximum shareholding percentage for a foreign strategic investor and his/her/its affiliated person is 15% of the charter capital of a Vietnamese bank.
In special cases, the Prime Minister may, at the proposal of the State Bank of Vietnam, decide to allow a foreign strategic investor or his/her/its affiliated person to hold shares exceeding 15% but not exceeding 20% of the charter capital of a Vietnamese bank.
5. When a foreign credit institution holds convertible bonds, upon the conversion of bonds into stocks, the shareholding percentages specified in Clauses 1, 2, 3 and 4 of this Article must be complied with.
6. The total number of shares owned by foreign credit institutions in an equitized state-owned commercial bank is the same as that owned by Vietnamese banks at that state-owned commercial bank. The Governor of the State Bank of Vietnam shall guide the implementation of this provision.
7. Vietnamese banks shall decide on shareholding percentages for foreign investors at the banks, which, however, must not exceed the percentages specified in this Article.
Article 5.- Competence to approve foreign investors' purchase of shares of Vietnamese banks
The Governor of the State Bank of Vietnam shall approve in writing foreign investors' purchase of shares of Vietnamese banks in accordance with the provisions of this Decree and relevant provisions of law.
Article 6.- Participation in administration in Vietnamese banks
1. A foreign credit institution may become a strategic investor of only one Vietnamese bank.
2. A foreign credit institution may take part in the Managing Boards of two Vietnamese banks at most.
Article 7.- Currency used in share purchase and sale transactions
Currency used in foreign investors' share purchase and sale transactions in Vietnamese banks is Vietnam dong.
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