Offshore indirect investment by Vietnamese companies

Under Decree 135/2015 effective from 15 February 2016, a local company can invest in shares, bonds and other securities issued offshore of Vietnam (Offshore Indirect Investment) via an entrustment agreement (hợp đồng ủy thác đầu tư) with a licensed fund management company, securities company or commercial bank (Local Managers) if:

  • the State Bank of Vietnam (SBV) designates investment in offshore securities investment funds includingOffshore Fund as a permitted type of offshore indirect investment;
  • the entrusted amount is within the annual limits for overall offshore indirect investment approved by the Prime Minister;
  • the local company satisfies certain conditions (see below); and
  • the Local Manager satisfies certain conditions (see below).
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Written by Nguyen Quang Vu On In , ,

Further development on Vietnamese tax applicable to offshore capital transfer

In April 2015, the General Department of Tax (GDT) instructs a provincial tax department to consider imposing corporate income tax (CIT) on an offshore capital transfer transaction (Offshore Transfer) between a French seller and a Vietnamese buyer (2015 Instruction). The 2015 Instruction has raised a Vietnamese tax concern over offshore capital transfer activities. In February 2016, the GDT issues additional guidelines (2016 Instruction) for the Offshore Transfer to clarify some unclear issues under the 2015 Instruction. In particular,

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Written by Nguyen Quang Vu On In , ,

Acquisition Registration in Vietnam – Scope of Application

Under the Investment Law 2014 and Decree 118/2015, an Acquisition Registration will be required:

  • if a foreign investor or a deemed foreign investor acquires any percentage of ownership interest in a target company, which involves in business subject to a FIE Condition; or
  • if a foreign investor or a deemed foreign investor acquires ownership interest in a target company, which does not involve in any business subject to a FIE Condition but the proposed acquisition results in (1) the aggregate ownership interest held by foreign investors or Deemed Foreign Investors in the target company being equal to or exceeding 51%; or (2) the aggregate ownership interest held by foreign investors or deemed foreign investors in the target company, which already exceeds 51%, increasing.
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Written by Nguyen Quang Vu On In ,