Investment Bank Account in Vietnam: Key Regulations and Updates
Circular 06/2019/TT-NHNN issued by the State Bank of Vietnam outlines essential updates on foreign exchange management for foreign direct investment activities. It regulates changes concerning the opening and use of investment bank accounts for foreign investors in Vietnam. Below is a comprehensive guide to these updates and their implications.
Direct Investment and Investment Bank Account Requirements
Foreign-invested enterprises engaging in direct investment must open a direct investment account as mandated by Circular 06/2019/TT-NHNN. The scope of direct investment includes:
- Enterprises Established Through Direct Investment
- Companies established under the “establish an enterprise” investment form with foreign investors owning shares and requiring Investment Registration Certificates as per the Investment Law.
- Ownership Exceeding 51%
- Enterprises where foreign investors own 51% or more of charter capital, including:
- Enterprises receiving foreign investment through share purchase or capital contribution leading to 51% ownership.
- Companies formed after mergers or splits resulting in foreign ownership exceeding 51%.
- Entities established under specialized laws.
- Enterprises where foreign investors own 51% or more of charter capital, including:
Account Transition Requirements
Enterprises with foreign ownership under the following conditions must:
- Close existing indirect investment accounts (if applicable).
- Open and use direct investment accounts instead.
However, companies borrowing and repaying foreign loans via direct investment accounts may retain these accounts for loan-related transactions.
Indirect Investment Bank Accounts and Permitted Activities
Foreign investors conducting indirect investment activities can open and use indirect investment accounts. Permissible activities include:
- Capital Contribution and Share Transactions
- Investing in enterprises outside the scope of direct investment, where stocks are unlisted and not registered on the stock exchange.
- Investing in enterprises with listed stocks or those registered for trading on the stock exchange.
- Securities Transactions
- Buying and selling bonds and securities on the Vietnam stock market.
- Trading valuable papers issued in Vietnamese dong by licensed organizations within Vietnam.
- Entrusted Investment in Vietnamese Dong
- Partnering with fund management companies, securities firms, and other authorized organizations for entrusted investment operations.
- Entrusting investment through credit institutions or foreign bank branches allowed by the State Bank.
- Securities Investment Funds
- Contributing and transferring capital in securities investment funds or fund management companies as per securities law.
- Other Forms of Indirect Investment
- Conducting other legally permitted indirect investment activities.
Regulation Implementation
Circular 06/2019/TT-NHNN took effect on September 6, 2019. Foreign investors must align with the specified requirements for opening and using investment accounts to ensure compliance.
Expert Assistance
For personalized advice and assistance regarding the opening or transitioning of investment bank accounts, contact Law Plus at or call +84 966 008 030.
Related:
- Procedures for termination of a foreign representative office in Vietnam
- Doing business in Vietnam
- Investing into Vietnam
