Global Trade Alert

 On 26 June 2015, Vietnam issued Decree 60/2015/ND-CP primarily lifting the cap of 49% foreign investment in public companies with some exceptions as below - 
 

• For public companies in sectors where a foreign equity limit applies according to an international treaty, such restrictive limit will apply
• Similarly, for public companies operating in sectors where relevant domestic laws for equity caps provide a foreign ownership ratio, that cap will apply
• Also, for foreign investments in industries where certain conditions are applicable to foreign investors but there are no specific provisions on foreign ownership ratio, the maximum ratio will be 49%
• In case the public company being invested in is involved in several business lines, the ownership limit applicable will be the lowest ratio of the business line where there are provisions of foreign ownership.
• For investments in securities or fund management companies, foreign investors licensed in their home countries in any financial sector and having a least 2 years operational experience are permitted to acquire all equity in the Vietnamese company. Otherwise a cap of 51% applies

 
For the above Decree, foreign equity includes equity held by foreign investors and equity held by Vietnamese companies that are owned at least 51% by foreign investors. Further, the above caps apply only to voting equity in these companies and not in bonds, derivative securities or non-voting shares of such public companies.

This measure is effective from 1 September 2015.