A boost for SOEs equitization

Question: Which foreign investors are allowed to pay a deposit in a transferred foreign currency upon joining an auction of the SoEs that are equitized or divested?

Answer: The State Bank issued Circular 03/2019/TT-NHNN amending and supplementing a number of articles of Circular No. 32/2013/TT-NHNN dated December 26, 2013 guiding the implementation of the regulation on restricting the use of foreign exchange in the territory of Viet Nam ("Circular 03").

In order to promote the progress of equitization and divestment of the state owned enterprises and state invested enterprises, foreign nonresident investors are expedited to pay a deposit in any transferred foreign currency upon participating in an auction in the following cases:  

- Purchasing shares at the state owned enterprises that will be equitized upon approval by the Prime Minister;

- Purchasing shares, capital contribution portions of state owned enterprises and the state invested enterprises that will be divested upon approval by the Prime Minister;

- Purchasing shares, capital contribution portions of state owned enterprises investing in other enterprises that will be invested upon approval by the Prime Minister.

Based on the auction results, Circular 03 stipulates the rights and obligations of foreign investors as follows:

(i) In case of winning an auction, foreign investors will transfer investment capital in the form of transfer into the direct investment capital account and comply with the law on foreign exchange management for payment of the purchase value of shares and capital contribution portions.

(ii) In case of failure to win an auction, foreign investors remit abroad the deposit in foreign currency after subtracting related arising expenses (if any).

Circular 03 will take effect from May 13, 2019./.