This means that (except for certain cases discussed below) foreign individuals, foreign companies, Vietnamese companies in which foreign investors own more than 51% of the voting interest can invest in public listed or unlisted Vietnamese companies on an unrestricted basis without any cap on ownership.

This is set out in a decree (Decree 60) that the Government issued on 26 June of this year. Decree 60 amends a number of provisions of the Securities Law including those relating to private placement of shares and public offerings of securities by public companies. Debts of a company can now be swapped for shares in a private placement.

The most important change in law, however, is the provision on foreign ownership ratio in public companies which is currently capped at 49% (30% in respect of credit institutions).

Decree 60 provides that foreign ownership ratio in public companies will be unrestricted, unless otherwise provided in the charter and except in the following cases:

a. if an international treaty (such as WTO) of which Vietnam is a member contains restrictions on foreign ownership;

b. if the public company operates in a business investment line for with the law on investment and other laws provide for a cap on foreign ownership. If the laws do not cap foreign ownership, but the business line has conditions applicable to foreign investors, then the maximum foreign ownership ratio is 49%.

c. If the public company operates in multi-business lines with different provisions on foreign ownership ratios, then the applicable foreign ownership ratio is the lowest level of the relevant business line in which the company operates with provisions on foreign ownership ratio.

The relaxation of the cap of foreign ownership is one of the most significant change in law recently and an effort by the Government to stimulate the securities market in Vietnam.

Decree 60/2015/ND-CP dated 26 June 2015 (valid 1 September 2015)

DNLegal, 14 August 2015