Foreign investors are not allowed to hold more than 49% shares in a public company in Vietnam. Recently, the State Securities Commission has proposed to the Government to remove this restriction for certain sectors. In theory, even without the proposal, certain foreign investors may be entitled to acquire more than 49% shares in a Vietnamese public company pursuant to national treatment principle that Vietnam has undertaken in various investment treaty.

Vietnam undertakes to allow foreign investors to buy more than 49% of the shares in companies operating in certain sectors listed in the schedule of service commitments under the WTO Commitments (see Part C of Schedule 3 ). In addition, under certain bilateral treaties (e.g the Agreement on Investment Promotion and Protection between Japan and Vietnam), Vietnam undertakes to accord a national treatment principle for investors from certain countries subject to limited exceptions. Under the national treatment principle, a foreign investor from a contracting country should be treated as no less favourable than a domestic investor. Accordingly, if a domestic investor is allowed to own more than 49% of the charter capital of a target company then a foreign investor from such contracting country should be allowed too.

Therefore, technically, the 49% foreign ownership limit applicable to public companies (listed or unlisted) under Vietnamese law may be inconsistent with these international agreements if (1) the public company operates in a service sector in which under the WTO Commitments, foreign investors are allowed to own more than 49% of the charter capital of a Vietnamese company, and (2) the foreign investors are from a country, which enjoys a national treatment principle under a bilateral treaty with Vietnam.