Regulations on securities investment activities of foreign investors

Article overview

Securities investment activities of foreign investors in Vietnam are growing strongly, contributing to promoting the capital market and attracting international capital. However, for investment activities to take place safely and effectively, investors need to master the legal framework governing this activity. The following article by Long Phan will provide useful information for investors about investment forms and obligations when investing in securities that foreign investors need to pay attention to.

Foreign investors invest in securities in Vietnam
Foreign investors invest in securities in Vietnam

In what forms do foreign investors invest in securities in Vietnam?

Pursuant to Article 138 of Decree 155/2020/ND-CP, securities investment activities of foreign investors on the Vietnamese stock market include two main forms:

  1. Direct investment:
  • Foreign investors can participate and trade directly on the Vietnamese stock market, complying with the provisions of securities laws and the stock market.
  • In this case, foreign investors are required to register a securities trading code with the Vietnam Securities Depository and Clearing Corporation before conducting any investment activities.
  1. Indirect investment:
  • Foreign investors can invest in the form of entrusting capital to a securities investment fund management company or to a branch of a foreign fund management company in Vietnam.
  • For this form, foreign investors do not need to register for a securities trading code, however, the securities investment fund management company or branch of the foreign fund management company receiving entrustment must register the code number of securities transactions as prescribed in Points d and đ, Clause 2, Article 145 of Decree 155/2020/ND-CP.
Regulations on forms of securities investment in Vietnam
Regulations on forms of securities investment in Vietnam

Conditions for foreign investors to choose a Vietnamese transaction representative

Pursuant to Clause 4, Article 138 of Decree 155/2020/ND-CP, foreign investors have the right to choose a transaction representative in Vietnam, provided that this person meets the following requirements:

  • Not currently serving a prison sentence or banned from doing business by a court;
  • Have a professional certificate related to securities, specifically a certificate on basic issues of securities and the stock market, along with a certificate of law on securities and the stock market;
  • Be the sole representative in Vietnam of a foreign investor and have a written authorization from the foreign investor.

Obligations of foreign investors when investing in the Vietnamese stock market

According to the provisions of Article 5 of Circular 51/2021/TT-BTC, foreign investors when participating in the Vietnamese stock market need to comply with the following three important obligations:

  • Ensure that investment transactions on the Vietnamese stock market and transactions conducted by related persons and groups of related foreign investors are not intended to create artificial supply and demand or manipulate prices. securities and other prohibited trading acts according to the provisions of law.
  • Foreign investors and organizations issuing depository certificates abroad must fulfill their obligations to declare, pay and settle taxes, fees, charges and service prices related to securities activities in Vietnam in accordance with the provisions of Vietnamese law.
  • Foreign investors and related groups of foreign investors carry out the obligation to report ownership and disclose information about securities transactions in accordance with the law on information disclosure on the stock market.
Note the obligations of foreign investors when investing in securities in Vietnam
Note the obligations of foreign investors when investing in securities in Vietnam

Effective consulting and support services for stock investment in Vietnam for foreign investors

Securities investment activities of foreign investors in Vietnam are increasingly attracting attention thanks to the development potential of the financial market. To support foreign investors in accessing and making effective investments, Long Phan provides professional consulting and support services, including:

  • Consulting on stock trading code registration.
  • Support procedures for appointing transaction representatives.
  • Consulting on compliance with regulations on foreign ownership ratio.
  • Support tax reporting and information disclosure.
  • Consulting on stock transactions.
  • Support to resolve investment disputes.

For foreign investors who need in-depth support on securities investment regulations and procedures in Vietnam, Long Phan is a reliable partner, with a team of experienced experts always ready to accompany you. You throughout your investment journey. We provide professional services, optimizing your investment efficiency. Please contact Long Phan via the hotline 0906735386 for detailed and quick advice on your questions.