Registration of ESOP Share Issuance by Public Companies

The Registration of ESOP Share Issuance by Public Companies (issuance under the Employee Stock Ownership Plan) is a mandatory procedure to ensure transparency and compliance with securities laws. Proper implementation helps enterprises effectively mobilize internal resources while aligning the interests of personnel with the issuing organization. This article analyzes the conditions, dossier, and implementation sequence of this operation.

Conditions for a public company to issue shares under an employee stock option program.

According to Article 64 of Decree 155/2020/ND-CP (amended and supplemented by Decree 245/2025/ND-CP), a public company wishing to issue shares under an ESOP must meet the following conditions:

1. Plan Approval: An issuance plan must be approved by the General Meeting of Shareholders (GMS), clearly stating: subjects, quantity, criteria for participation, issuance price (or pricing principles authorizing the Board of Directors).
2. Quantity Limit: The total number of shares issued under the program in every 12 months must not exceed 5% of the company’s outstanding shares.
3. List Approval: The list of employees, allocation quantity, and execution time must be approved by the GMS or authorized Board of Directors (BOD).
4. Source (For Bonus Shares): Equity sources sufficient for the capital increase (Share premium, development investment fund, undistributed profit, etc.) based on the latest audited financial statements.
   • Note for Parent Companies: If using undistributed profit, the amount used must not exceed the undistributed profit on the consolidated audited financial statements. If the profit used is lower than the consolidated figure but higher than the parent company’s separate figure, profits must be transferred from subsidiaries to the parent company before distribution.
5. Value: For bonus shares, the total value of sources used must not be lower than the total value of the capital increase approved by the GMS.
6. Escrow Account: Must open a blocked account to receive payment for share purchases (except for bonus share issuance).
7. Foreign Ownership: Must comply with foreign ownership limit (FOL) regulations if issuing to foreign employees.
8. Lock-up Period: Shares are restricted from transfer for a minimum of 01 year from the end of the issuance.
   • Exception: If shares are repurchased by the company under the ESOP regulations, the transfer restriction is lifted; the company may resell repurchased shares under Ministry of Finance guidance.

The competent authority registers the issuance of shares under the employee stock option program.

The State Securities Commission (SSC) is the agency mainly responsible for reviewing and approving the ESOP issuance plan. (Legal Basis: Clause 1, Article 69, Decree 155/2020/ND-CP, amended by Decree 245/2025/ND-CP).

Required documents for registering to issue shares under an employee stock option program.

The dossier is detailed in Article 65 of Decree 155/2020/ND-CP (amended by Decree 245/2025/ND-CP), including:

1. Report: Issuance Report (Form No. 17, Appendix of the Decree).
2. GMS Decision: Approving the issuance plan. Note: Interested parties related to the issuance must not vote on this content.
3. List Approval Decision: GMS or BOD Decision approving the list of employees, allocation, timing, and buy-back/resale plan (if any). Note: Interested parties must not vote.
4. Financial Statements: Latest audited financial statements (for bonus share issuance).
5. Profit Transfer Documents: Subsidiary’s decision on profit distribution and bank statements confirming profit transfer to the parent company (if applicable for bonus shares).
6. Bank Confirmation: Confirmation of the blocked account opening (except for bonus shares).
7. FOL Decision: GMS or BOD decision ensuring foreign ownership compliance (if applicable).
8. Implementation Documents:
   • BOD Decision implementing the plan.
   • Approval from the State Bank of Vietnam (for Credit Institutions) or Ministry of Finance (for Insurers).

>>> See more at: Detailed Share Issuance Book from Jan 01, 2026

The procedure for registering the issuance of shares under an employee stock option program in a company.

The procedure follows Article 69 of Decree 155/2020/ND-CP:

Step 1: Submission The issuer submits the complete dossier to the SSC.

Step 2: SSC Notification Within 07 working days of receiving a valid dossier, the SSC notifies the issuer in writing and publishes the receipt on its website. If refused, a written reason is provided.

Step 3: Public Announcement Within 07 working days of the SSC’s notice, the issuer must publish the Issuance Notice on its website and the Stock Exchange’s website. This must be done at least 07 working days before the issuance ends.

Step 4: Execution Proceed with the issuance. The duration must not exceed 45 days from the SSC’s notification date.

Step 5: Reporting Results Within 15 days of completion, the issuer publishes the results and sends a Report on Issuance Results to the SSC, including:

• List of employees and distributed shares.
• Bank confirmation of collected funds (except for bonus shares).

Step 6: Confirmation Within 03 working days of receiving the report, the SSC notifies the receipt of the report to the issuer, Stock Exchange, and VSDC.

Step 7: Unfreezing Funds After the SSC’s notification, the issuer may terminate the account blockage and use the funds.

>>> See more at: Share Issuance to Swap Debt or Equity of Another Company

Long Phan Consulting provides consulting services for the procedures of registering a share issuance.

Long Phan Consulting Company provides comprehensive support to ensure an effective ESOP program compliant with the latest regulations:

• Consulting & Planning: Analyzing financials and HR strategy to propose a suitable plan; advising on pricing, criteria, and buy-back mechanisms.
• Dossier Drafting: Preparing and standardizing the dossier (Issuance Report, GMS/BOD Resolutions, Explanations regarding source of capital/FOL).
• Representation: Working with the SSC; monitoring progress; supporting the organization of the issuance; reporting results; assisting with additional depository (VSDC) and listing (Stock Exchange).

Frequently Asked Questions

Below are some frequently asked questions regarding the registration for an employee stock option program by a publicly traded company. Please refer to them:

Must ESOP shares be locked up for 1 year?

Generally Yes. However, under the latest regulations (Decree 245/2025/ND-CP), the restriction is removed if the shares are repurchased by the company from the employee under the issued ESOP regulations.

Can participating employees vote on the plan?

No. Persons with interests related to the issuance (beneficiaries) must not participate in voting on the issuance plan and allocation list at the GMS to ensure transparency.

How is the price determined?

The price or pricing principle is decided by the GMS. The GMS may authorize the Board of Directors to determine the specific price.

When can the company use the proceeds?

Only after the SSC issues a written notice acknowledging the receipt of the Report on Issuance Results.

Can foreign employees participate?

Yes, provided the issuance complies with foreign ownership limit (FOL) regulations.

Is a blocked account needed for bonus ESOP shares?

No. The requirement for a blocked account applies only to issuances where the company collects money from employees.

Conclusion

The Registration of ESOP Share Issuance by Public Companies requires strict adherence to securities and corporate governance regulations. Long Phan Consulting Company is ready to assist clients in resolving technical issues and optimizing the process. Please contact Hotline 1900636389 for detailed advice.