In addition to new foreign ownership caps in Vietnamese credit institutions, a few salient points of Decree 1/2014 are as below:

• Decree 1/2014 for the first time covers foreign investment in non-bank credit institutions such as finance companies or finance leasing companies. Decree 69/2007 only covers foreign investment in commercial banks. Under Decree 1/2014, a foreign finance company or a foreign finance leasing company can only become a foreign strategic investor in a Vietnamese finance company or a Vietnamese finance leasing company, respectively (but not in a commercial bank);
•   A company incorporated in Vietnam but is owned by foreign investors by more than 49% will be considered as a foreign investor. Under Decree 69/2007, foreign-invested companies are considered as domestic investors;
• Indirect shareholding in Vietnamese credit institutions is also subject to foreign ownership cap;
• A foreign investor can only participate in the Board of one credit institution except for subsidiaries of the same credit institution or credit institutions which are under a restructuring plan approved by the State Bank of Vietnam (SBV). Under Decree 69/2007, a foreign credit institution may participate in the Boards of two commercial banks.
• The SBV now only approves (1) the sale of shares to a foreign strategic investor or (2) purchase of shares resulting in the holding of 10% or more of the shares of a credit institution under Decree 1/2014. Purchasing of less than 5% shares of a credit institution by a foreign investor can be done without the SBV’s approval. Under Decree 69/2007, all purchases by foreign investors are subject to approval by the SBV.
• In addition to rights under the Charter and law, a foreign investor is expressly allowed to have the rights under the share purchase agreement signed with the Vietnamese credit institution. This certainly gives more legal comfort to a foreign investor investing in Vietnamese credit institutions.