On 26 June 2015, the Government just issued Decree 60/2015 providing some amendments to the implementing regulations of the Securities Law 2006. Among the amendments, the most notable ones are about changes to foreign ownership limits in a public company in Vietnam. From 1 September 2015, these changes are as follows:

Only shares with voting rights are counted towards the applicable foreign ownership limits. Foreign investors may hold unlimited non-voting shares unless otherwise provided in the charter of the public company. However, it is not clear how this new requirement can reconcile with the foreign ownership limits provided in other laws which do not distinguish between voting or non-voting shares.

A Vietnamese company in which foreign investors hold 51% or more voting capital (first level sub) will be considered as a foreign investor. However, Decree 60/2015 does not go further to expand the definition of foreign investors to subsidiaries of a first level sub as in the case of Investment Law 2014.

Where a public company operates in sectors which are subject to specific foreign ownership limits under an international treaty then the specific foreign ownership limits provided in an international treaty will apply.

Where a public company operates in sectors which are subject to specific foreign ownership limits under other laws then the specific foreign ownership limits provided in other laws will apply.

Where a public company operates in sectors which are conditional to foreign investors but have no specific foreign ownership limit then the applicable limit is 49%. This is the foreign ownership limit currently applicable to most public companies in Vietnam. The Ministry of Planning and Investment has published a draft list of sectors which are conditional to foreign investors in its website.

Where a public company operates in sectors which are not conditional to foreign investors and have no specific foreign ownership limit then the limit is 100% (i.e. unlimited foreign ownership), unless otherwise provided in the charter of the public company.

Foreign investors can hold unlimited convertible bonds issued by a public company as long as the foreign ownership limits applicable to such public company are complied with when the convertible bonds become convertible. This is different from the current approach which allows foreign investors to hold unlimited convertible bonds as long as the foreign ownership limits are complied with when the convertible bonds are actually converted (not just become convertible).

Vietnam Business Law