Foreign Fund Management Applicants Must Have Securities Assets of US$300Mln

Sunday, April 27, 2008
Foreign investors who want to set up 100% foreign owned fund management companies in Viet Nam must be managing securities with the market value of at least US$300 million, according to the Finance Ministry’s draft regulation on foreign transactions in Viet Nam’s stock market.
Foreign fund management companies who want to establish branches in Viet Nam must have at least US$500 million in total registered capital of their managed funds and securities companies.
Before Viet Nam opens its securities market under its WTO commitments, the wholly foreign owned fund management companies and branches of foreign fund management companies are only authorized to provide asset management services for foreigners in Viet Nam.
Foreign-invested fund management companies are allowed to be converted into the wholly foreign owned firms.
The wholly foreign owned fund management companies have operational duration of less than 99 years and branches of foreign companies less than five years.
The draft also regulates that a foreign investor is allowed to open a Viet Nam dong account for indirect investment capital at a credit institution licensed to trade foreign currency. All transactions related to securities market such as buying and selling shares, transferring money and payment, will have to be made via this account.
Hoang Phong, a partner with Thanh Ninh law firm, said the draft would become a basis for the finance ministry and other market regulators to manage business of foreign fund management companies.