The requirements for foreign investors regarding the opening and use of indirect investment capital accounts in Vietnam have been updated in a draft regulation, replacing prior rules under Circular No. 05/2014/TT-NHNN. Below are the key highlights:

Mandatory Account Requirements

Foreign investors participating in indirect investment activities in Vietnam must comply with the following rules:

1. Single Account Rule:

  • Foreign investors are required to open one (1) indirect investment capital account denominated in Vietnam Dong (VND) at a licensed bank to perform collection and payment transactions.
  • Exceptions to this requirement are outlined in Clause 2 of the draft regulation.

Permissible Cases for Multiple Accounts

Foreign investors are permitted to open multiple indirect investment capital accounts in the following circumstances:

1. Foreign Securities Companies:

Such companies may open two (2) indirect investment accounts corresponding to two (2) securities trading codes, specifically:

  • One account for the company’s proprietary activities.
  • One account for securities brokerage activities.

2. Foreign Investment Funds/Organizations Managed by Multiple Entities:

Foreign funds or organizations managed by multiple foreign fund management companies may open multiple accounts based on the securities trading codes issued.

  • Each investment portfolio managed by a specific fund management company can open one (1) account corresponding to a securities trading code.
  • Portfolios with separate securities trading codes can open corresponding accounts.

3. Government or Institutional Investors:

Foreign investment organizations under foreign governments or international financial institutions to which Vietnam is a member may open multiple accounts based on securities trading codes.

Each portfolio managed by a depository bank with a securities trading code may open one (1) corresponding account.

Changes from Previous Regulations

Under Circular No. 05/2014/TT-NHNN, foreign investors were limited to opening only one (1) indirect investment capital account at a licensed bank for all their activities. The new draft regulation introduces greater flexibility, accommodating the diverse structures and needs of foreign investment entities.

Implications for Foreign Investors

  • Compliance: Foreign investors must ensure their investment activities align with these updated account requirements.
  • Efficiency: Licensed banks handling these accounts should streamline services for account management to cater to the expanded needs of investors.
  • Clarity: Investors should work closely with legal advisors or financial institutions to fully understand the applicable rules and exceptions.

For further clarification or assistance in implementing these changes, feel free to contact us.

This advisory reflects the latest draft regulation and is subject to changes upon official enactment. Ensure to review updates or consult a legal expert for compliance.

The above information is provided by Mys Law. For any questions regarding the content of this article, please contact 0969.361.319 or email: [email protected] for further clarification. Best regards!

Compiler: Nguyen Anh Quan