PM agrees to broaden foreign ownership cap

June 29, 2015 | 08:26

(0) user say

Foreign investors will be allowed to own up to 100 per cent of asset management firms and securities companies in Vietnam, instead of the existing cap of 49 per cent

illustration photo

The latest amendment was approved by the prime minister during the Ministry of Finance’s (MoF) preliminary review for the first half of the year, as part of the government’s attempt to entice more foreign investors to invest in the Vietnamese stock market.

Minister of Finance Dinh Tien Dung last week confirmed that the new decree to replace Decree No58/2012/ND-CP would be effective on September 1.

The new decree, providing implementing details for specific provisions of the Securities Law, will also permit a public company to determine the foreign ownership limit in its chartered capital, providing the limit does not exceed the ceiling regulated by the law.

Decree 58 was first issued back in 2012 and capped the foreign ownership at 49 per cent in a public or listed company.

MoF’s Dung said that the amendment would definitely draw a large inflow of foreign capital into Vietnam’s stock market in the coming time and in turn, would help to accelerate the progress of state-owned enterprises’ equitisation.

“The amended decree will take effective measures to provide more room for foreign investors and foreign investors are thus anticipated to boost their investment activities in the local stock market,” stressed Dung.

During the past number of years, the State Securities Commission (SSC) has discussed the possibility of expanding the 49 per cent threshold to 60 per cent.

Both foreign investors and the stock exchanges have been most eager to welcome the amended decree as they have well reached the current threshold and desperately needed more room to acquire local enterprises’ stocks.

By By Trang Nguyen

What the stars mean:

★ Poor ★ ★ Promising ★★★ Good ★★★★ Very good ★★★★★ Exceptional