Conditions for new foreign investor in Vietnamese insurance companies

The table below summaries the key conditions that a new foreign institutional investor may need to satisfy when investing in an existing insurance company in Vietnam. The target insurance company can be either a joint stock company (JSC) or a limited liability company (LLC). The investment could either be acquisition of new shares issued by the target or of existing share held by existing owners. Except in case of acquiring less than 10% existing shares, in all cases, an approval from the Ministry of Finance is required. 

Ownership Level

JSC Insurance Co

LLC Insurance Co

Less than 10%

·         No specific condition

·         No specific condition

From 10% to up to 20%

·         Using equity capital for the acquisition.


·         Not using loan capital nor entrusted investment capital for the investment;


·         In the previous year, the equity capital after deducting the long-term investments funded by such equity capital must be higher than the proposed purchase price;


·         Having profit and no accumulated loss for the last 3 years;


·         The equity capital at least equal to 50% of the legal capital of the target;


·         The proposed purchase price must not be higher than 25% of the equity capital of the foreign investor; and


·         Complying with all applicable prudential ratio or capital adequacy requirements if the foreign investor is a financial institution.


·         Same conditions as in the case of a JSC Insurance Co;


·         Legal person status under Vietnamese law;


·         Being an insurance company licensed in its home country with the same scope of insurance business as that of the target;


·         Having been lawfully operating for at least 10 years;


·         Having its total asset value in the previous year of at least US$ 2 billion; and


·         Having not committed any serious breach of laws for the last 3 years.

From more than 20% to up to  100%

·         Same conditions as in the case of acquisition of 10 – 20% share capital.

·         No further conditions if the investment is to restore the target’s insolvency status. Otherwise, the foreign investor must satisfy the conditions of a “strategic investor” as listed below.

·         Total assets value of at least US$ 2 billion in the preceding year.

·         Having profit and no accumulated loss for the last 3 years.

·         Having at least five years of experience in the area of banking, finance and insurance.

·         Subject to a share transfer restriction of at least three years.

·         Same conditions as in the case of acquisition of 10 – 20% share capital