The Vietnamese government recently issued Decree 69/2025 (effective 19 May 2025), which amends Decree 01/2014 regarding foreign investor’s share purchase in Vietnamese credit institutions. Here are the main changes:

1. Scope of application

Decree 69/2025 clarifies that foreign-invested economic organisations (FIEOs) which are required to comply with investment conditions and procedures applicable to foreign investors must now follow the same rules (in Decree 01/2014 as amended by Decree 69/2025) applicable to foreign investors when buying shares in Vietnamese credit institutions.

Under the Investment Law 2020, these FIEOs refer to entities where foreign investors hold a majority of the charter capital (FIEO-F1). Notably, Decree 69/2025 does not explicitly state whether it applies to economic organisations majority-owned by an FIEO-F1, even though such economic organisations are also treated as foreign investors under the Investment Law 2020.

2. Calculation of total foreign ownership limit (FOL)

Shareholdings of FIEOs are now counted towards the total FOL in a credit institution.

3. Increased FOL (up to 49%) for Banks Participating in Mandatory Transfers of Weak Credit Institutions

For a commercial bank (that is not majority state-owned) acting as a transferee in a mandatory transfer of a weak credit institution, the total FOL can be increased from the standard 30% up to 49% of its charter capital. This increased 49% FOL is temporary, applying only during the execution of the approved transfer plan. Afterwards, the FOL must revert to the standard 30%. Decree 69/2025 is not clear on the consequence of such reversion. There is an explicit provision that after such reversion, the foreign investor must not acquire additional shares of the transferee credit institution until the FOL is back within the compliant level (unless in the case of offering for existing shareholders). It is not clear if this means that the foreign investor can continue to hold the shares owned before the reversion, rather than being required to sell the share to comply with the FOL.

This provision could create opportunities for further foreign investment in attractive banks where the FOL was previously at or near its limit.

4. FOL for Non-Bank Credit Institutions

The maximum total FOL in non-bank credit institutions (e.g., finance companies) is now explicitly set at 50% of their charter capital.

5. Key revisions to the definition of foreign organization:

Foreign Organization is now defined as an organization established under foreign law, conducting business investment activities in Vietnam. This definition no longer includes organizations and funds established in Vietnam with over 49% foreign capital. The factor of “conducting business investment activities in Vietnam” can be problematic because literally, it can be understood that only foreign organizations which have already conducted business investment activities in Vietnam can purchase shares in Vietnamese credit institutions.

6. Handling FOL Breaches

If a foreign investor (or such investor and its related parties) exceeds the applicable FOL due to a pro-rata share issuance by the credit institution, they are granted a 6-month grace period to sell down their shares and comply with the FOL. If, in such case, the FOL for all foreign investors in the credit institution is also breached, no foreign investor can acquire additional shares until the FOL is back within the compliant level. Existing lock-up periods (e.g., 5 years for strategic foreign investors, 3 years for foreign investors holding over 10%) do not prevent share sales necessary to comply with FOL.

While it is not clear, it is reasonable to expect that in these situations these provisions will prevent the application of administrative sanction due to FOL breach.

This post is written by Ha Thanh Phuc and Nguyen Hoang Duy.

Vietnam Business Law