THE SOCIALIST REPUBLIC OF VIET NAM
Government News
Legal corridor created for foreign banks' entry in VN
VNGOP – The Governor of the State Bank of Vietnam issued on June 05 Ordinance 03/2007/TT-NHNN instructing the implementation of Decree 22/2006/NĐ-CP on organization and operation of foreign bank branches, joint-venture banks, 100% foreign-invested banks, and representative offices of foreign credit organizations in Vietnam.
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Opening ceremony of the Hồ Chí Minh City Branch of Standard Chartered Bank |
To obtain the license to open branches or found a joint-venture bank or a 100% foreign-invested bank, foreign banks must meet legal conditions of Vietnam in three consecutive years before applying for the license.
They must be experienced in international performance, ranked at least among the average and stable group as classified by international prestige grading organizations, and capable to ensure financial commitments and normal performance even in disadvantaged economic conditions. They must have a minimum capital safety of 8% and other safety standards.
To open a Vietnam-based branch, foreign banks must have a total property worth of US$ 20 billion in the fiscal year before applying for the license.
To found and run a joint-venture or 100% foreign-invested bank, they must have a total property worth of US$ 10 billion.
In joint-venture banks, the foreign partner's maximum capital contribution must no exceed 50% of charter capital. The PM will make decision in specific cases.
For 100% foreign-invested banks, the members (including the parent bank) have right to transfer partly or wholly their contributions to other members or foreign partners provided that there is always a foreign bank possessing over 50% of charter capital.
By Phương Hoàng