Confusion about tender offer definition under Vietnamese law

Under Vietnam securities regulations, the legal requirement on tender offer in acquisition of shares in a public joint stock company (the target company) will be triggered in one of the following circumstances:

a.            Circumstance 1: An offer to purchase voting shares which results in the ownership of 25% or more of the outstanding voting shares of the target company;

b.            Circumstance 2: Any organization or individual together with its related persons holding 25% or more of the voting shares in the target company purchasing further (mua tiếp) 10% or more of the outstanding voting shares of the target company;

c.            Circumstance 3: Any organization or individual together with its related person holding 25% or more of the voting shares in the target company purchasing further 5% to less than 10% of the outstanding voting shares of the target company within 1 year from the completion of the previous tender offer; and

d.            Circumstance 4: Any organization or individual having intention to conduct a tender offer.

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Written by Nguyen Quang Vu On In ,

Limitation on caveat emptor rules under Vietnam Civil Code 2015

The new Civil Code 2015 has substantially limited the caveat emptor rules in Vietnam. The Civil Code 2015 requires a party before entering into a contract with another party to disclose to the other party information that may affect such other party’s decision to enter into the contract. Failure to notify will be subject to compensation for damages. On the other hand, the normal caveat emptor rule does not require a seller to disclose information about the seller’s goods to a buyer unless the buyer specifically asks for such information (e.g. by way of a contractual representation).

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Written by Nguyen Quang Vu On In

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 , ,

Application of investment treaties for a Japanese investor in Vietnam

Under Decree 58/2012, if an international treaty has provisions regarding foreign ownership limit (FOL) in a public joint stock company then the provisions of the international treaty will apply. Under Decree 118/2015, if a foreign investor is subject to multiple international treaties on the same industry or business line then the foreign investor is entitled to select one of the applicable international treaty. And if the foreign investor has selected to follow one international treaty then the investor will need to comply the provisions of such international treaty as a whole.  

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Written by Nguyen Quang Vu On In ,