Guide to vietnam securities 2011

Guide to
Vietnam Securities
2011

About Viet Capital Securities
Viet Capital Securities (VCSC) is a leading securities firm fully licensed by the State Securities Commission
of Vietnam to provide investment banking, research and brokerage services in Vietnam to governments,
corporations, institutions and individuals worldwide.

VCSC is the largest investment bank in terms of revenues from capital markets and corporate finance
activities and has been involved in numerous landmark deals in Vietnam. Our brokerage market share is in
the Top 10 and clients include some of the largest and well-known asset management firms in Vietnam and
the world.

Recent awards by Finance Asia, Alpha Southeast Asia and The Asset emphasize our leadership in Vietnam’s
Capital Markets.

Services include:

Institutional Brokerage Research Investment banking

• Top 10 market share • 12 professional staff, • Advisor to most of the top
• Dedicated to serving headed by 10+years CFA companies
institutions worldwide • Forward looking • Advisor to most of the major
• Brokerage: Listed & OTC • Economics (daily) IPOs and M&As
• Block sourcing / building • Sectors (ad hoc) • Leader in ECM and M&A
• Intermediation • Companies (frequent) • Restructuration, IPOs
• Entry / exit advisory • Strategy (monthly) • Privatisation
• Custody & depository • Technical Analysis (daily) • Valuation
• Flow info (trends) • Commentary (daily) • Due diligence

Sales Products Research Access In-depth Relationships

• Morning Notes • Analysts calls • Companies
• Guide to VN Securities • Corporate access • SBV, SSC, VSD, GSO
• OTC quotes • Model access • HSX, HNX

Award winning:
N AWA
SIA
RD
ASS E T A

S

Alpha
2010

TR
IPLEA SoutheastAsia
Best Equity House Best Brokerage House Best Equity House
Vietnam, 2011 Vietnam, 2011 Best Mid-Cap Corporate
Finance Vietnam, 2011
Contacts:

Institutional Brokerage Research Investment banking
Michel Tosto Marc Djandji Hoan Dinh
michel.tosto@vcsc.com.vn marc.djandji@vcsc.com.vn hoan.dinh@vcsc.com.vn

To sign up for our research, please contact us at michel.tosto@vcsc.com.vn

Guide to Vietnam Securities
Viet Capital Securities’ Guide to Vietnam Securities covers everything investors need to understand to trade
in Vietnam. Whether listed or unlisted securities or IPOs, it’s all exposed in the finest details. No stones left
unturned. No half truths.

Content

1. Listed Securities 4

1.1. Overview 5

1.2. Placing an order 6

1.3. Trading restrictions 8

1.4. Disclosure requirements 9

1.5. Order matching and price determination 11

2. Unlisted “OTC” Securities 12

2.1. Introduction 13

2.2. Process of trading OTC securities 13

2.3. Conclusion 15

2.4. WTO and FOL for OTC securities 15

2.5. List of documents needed to trade OTC securities 16

3. IPOs 18

3.1. IPOs & auction basics 19

3.2. How to participate in an auction in Vietnam 20

3.3. Auction example 21

3.4. VCSC as an auction agent 21

3.5. Auction registration (checklist) 21

3.6. Background information on share offerings in Vietnam 22

3.7. Auction process flow (summary) 24
4. Annexes 26

4.1. Setting up to invest in Vietnam 27

4.2. List of banks offering custody services 28

4.3. Rights and obligations of investors 29

4.4. Capital flows 29

4.5. Taxes 30

4.6. Board membership 30

4.7. Legalization process 31

2 page | www.vcsc.com.vn

2011

Interpretation of terms

Outstanding shares: means the total amount of shares issued by the company. This number can be
different from the amount of “listed shares”, which is the amount effectively listed by the company on one
of Vietnam’s stock exchange (a company cannot list shares on both exchanges at the same time). Some
companies do not list all their shares, notably VCB and CTG.

Voting shares: Voting shares are currently the same as “outstanding shares” as Vietnam only has one
class of shares which are all entitled to the same rights and obligations. We talk about voting shares in
certain sections of this document as the law refers to that specific term on these specific occasions. The
distinction between outstanding shares and voting shares will become important as Vietnam allows different
classes of shares carrying different rights and obligations. We make the distinction at this time out of a
desire for precision.

Strategic Investor: Decision 36/2003/QD-TTG from the Ministry of Finance stipulates that “if foreign
investors desire to become strategic investors of Vietnamese enterprises, they must have the financial
capacity and ability to support Vietnamese enterprises in developing, improving ability of administration and
management and apply of modern technology, and have close relations with enterprises on a long term
basis in terms of interests, and satisfy specific criteria set out by the enterprises”.

Disclaimer
No representation, warranty or undertaking, expressed or implied, is given as to the accuracy or completeness of the
information contained in this document by any of Viet Capital Securities, its members, employees or affiliates and no
liability is accepted by such persons for the accuracy or completeness of any such information. The information is intended
for general guidance only, and it is the responsibility of any person or persons in possession of this document to inform
themselves of, and to observe, all applicable laws and regulations of any relevant jurisdiction. One must understand that
the information may be change at any time without warning by Vietnam authorities. In addition, practice may be different
from the letter of the law. We did make the utmost effort to ensure that all information is accurate at the time we published.
The distribution of this document may be restricted in certain jurisdictions in which case you may not use it.

sales@vcsc.com.vn | VCSC <GO> | page 3

1 Listed
Securities


2011

1.1. Overview

Stock exchanges Ho Chi Minh Stock Exchange Hanoi Stock Exchange
(abbr.) (HSX) (HNX)

Reuters: .VNI Reuters: .HNXI
Reference Bloomberg: VNINDEX Bloomberg: VHINDEX
http://www.hsx.vn http://www.hnx.vn

Currency of trade Vietnam Dong (VND)

Trading days Monday – Friday (GMT+07:00)

Holidays • January 1st – New Year
• Jan-Feb (last day of the last lunar month to the third day of the first lunar
month inclusively) – Vietnamese (Chinese) New Year
• April (10th day of the 3rd lunar month) – King Hung Commemorations
• April 30 – Liberation Day
• May 1 – Labour Day
• September 2 – National Holiday

1) Main board (HNX)
Boards 1) One main board only (HSX)
2) “Nasdaq type” board (UpCom)

Trading hours HSX: Equities (no bonds on HSX) HNX: Equities & Bonds
Session 1: 08:30-08:45 (P.OM & PT) Session 1: 08:30 – 11:00
Session 2: 08:45-10:30 (C.OM & PT) (Continuous OM and PT)
Session 3: 10:30-10:45 (P.OM & PT)
Session 4: 10:45-11:00 (PT only) UpCom: Equities & Bonds
Session 1: 08:30 – 11:30
Matching in session 1 and 3 is done at Session 2: 13:30 – 15:00
the end of each session (periodic order (Continuous OM and PT)
matching, or P.OM) while Session 2
matching is continuous throughout the HNX only has one session where
session (or C.OM). Trading hours are matching is conducted by order matching
expected to extend to the afternoon in 20 (OM) or put-through (PT) both for
Feb 2012. equities and bonds. A Put-Trough (PT) is
optional if trading at least 5,000 shares
A Put-Through (PT) is the act of or 1,000 bonds. Order matching (OM) is
directly matching an order with another mandatory for smaller trades. Note it’s
market participant, aka block dealing. always possible to break large orders into
PT transactions can occur at anytime multiple smaller one to avoid PT.
during trading hours. On the HSX, any
order of 20,000 shares or more must be UpCom has two sessions where trades
matched via PT, either by finding your own are matched through OM or PT. On the
counterparty, or asking your broker to help. first day of a newly listed stock, only OM
Orders of less than 20,000 shares cannot orders are accepted.
be match in PT. All PT transactions are
matched through the exchange’s system.
Note it’s possible to break large orders into
multiple smaller one to avoid PT.


1.2. Placing an order

Order types & validity HSX HNX / UpCom
LO: Limit order, valid the entire day LO: Limit order, valid the entire day
ATO: Market order valid in 1st session
only, matching priority over LO
ATC: Market order valid in 3rd session
only, matching priority over LO
MP: Market order (approved, but not
yet implemented)

Daily price change HSX HNX
limit (aka collar) Equities: 5% of previous day’s close, Equities: 7% of previous day’s volume
20% if 1st day of listing weighted average price.
(price ceiling and floor 30% if 1st day of listing.
on the day) Bonds: No limit
UpCom
Equities: 10% of previous day’s volume
weighted average price.
40% if 1st of listing

Bonds: No limit

Price Units / Ticks Price unit Equities Bonds
/ aka Quote unit if current
price is (VND): HSX HNX UpCom All Exch
(smallest multiple one
can price shares at) ≤ 49,900 100vnd 100vnd 100vnd None
50,000 to <100,000 500vnd 100vnd 100vnd None
≥ 100,000 1,000vnd 100vnd 100vnd None

Does not apply to PT transactions (they can be traded at any price).

Board lot HSX HNX
Equities: 10 shares Equities & Bonds: 100 shares/bonds
(smallest multiple
of shares one can (i.e. you can transact 10, 30, 70, …, UpCom
transact) shares, but not 22, 47, 89, …) Equities & Bonds: No board lot,
minimum 10 shares

Does not apply to PT transactions (they can be traded in any quantities).


2011

Amending and HSX HNX / UpCom
cancelling orders Session 1: Cannot cancel any order. Session 1: Unmatched portion of any
Unmatched portion of ATO orders are order can be cancelled at any time
cancelled at the end of the session.
Session 2: Unmatched portion of any It is possible to change the price of any
order can be cancelled at any time. order at any time, but to change the
Session 3: Can only cancel limit orders quantity you must first cancel your current
that were placed in previous sessions. order and enter a new one.
New orders cannot be cancelled.
Session 4: N/A

It’s impossible to change the price or
quantity of an order; you must cancel
the order and then enter a new one.

Matching priority All exchanges (PTQ principle)
#1 – Price priority : priority to the highest price bid or the lowest ask
#2 – Time priority : for orders at same price, priority to orders that came in first
#3 – Quantity priority : for orders at same price and time, priority is given to
orders with the highest quantity of shares

Matching principle HSX HNX / UpCom
Buy orders at higher or equal price Buy orders at higher or equal price to sell
than sell orders are matched against orders are matched against each other
each other following the PTQ principle. following the PTQ principle. Partial fills
Partial fills are possible. are possible

See section on “order matching and price determination” further in this document
for details about how ATO and ATC orders are matched.

Settlement HSX HNX
Equities: T+3 days; T+1 if transacting Equities: T+3 days; T+1 if transacting
(cash/stocks received over 100,000 shares by put-through over 100,000 shares by put-through
on settlement day can Bonds: T+3; choice of T+1,2 or 3 if
only be used the day transacting over 100,000 bonds
after)
UpCom
Equities & Bonds: T+3

Face value Equities: 10,000vnd
Bonds: 100,000vnd

Odd-lots Odd lots (shares owned in a number below 10 on the HSX and below 100 on the
HNX) may be kept, sold in a PT transaction, or sold to your broker.


1.3. Trading restrictions

Foreign ownership Equities: 49% of outstanding shares, 30% for banks*, and less for companies
limit (FOL) that pledged to list a some shares offshore; note that certain companies do not
list all their shares and therefore the FOL for the shares listed would be higher
(for example, a company that lists say less than 49% of its outstanding shares,
foreigners could buy up to 100% of the listed shares). FOL is available in real-time
on Bloomberg (all stocks) and on VCSC’s price board (www.vcsc.com.vn), just
hover your mouse over any ticker (HSX only).

Bonds: No FOL

* Banks FOL is limited to maximum of 5% for any single investor, 10% for any
investor that is a bank, and 15% for any “strategic investor”. A 20% stake requires
the approval of the Prime Minster. FOL for banks include affiliated persons (see
page 10 for details).

Restrictions on Applies to equities only: Shareholders that are also members of the board of
newly listed shares directors or board of controllers, a director, general director, deputy director or chief
accountant of a newly listed company must undertake to hold 100% of the shares
they own for a period of six (6) months from the date of listing and 50% of this
amount for the following six (6) months, excluding any shares held by individuals
acting as representative of the State.

Private equity firms who take board seats need to take note of this when planning
their exit strategy.

Other restrictions Funding requirement / short selling: Investors must have sufficient funds in their
local currency (VND) bank account if buying, or sufficient securities if selling (e.g.
short selling is not permitted). If investors have a pending FX transaction from a
foreign currency to VND, your custodian may take this into account when verifying
for funding requirement. Your custodian is the one who decides if these pending
transactions can be counted towards your funding requirement, not your broker.

Same day buy / sell: It is possible to buy and sell the same ticker on the same day
as long as you follow certain restrictions:
• You may only place a buy order if you do not have a current sell order on the
same ticker, and vice versa. If you do, you will have to cancel your current
order before placing your second order on the same ticker.
• One ticker, one broker. If you buy (or sell) shares with a broker, for the rest of
the day, you may only buy (or sell) the same ticker with the same broker.

Margin lending: Permitted for local investors only (albeit not for now as full
implementation of this new regulation is not possible yet).

Securities borrowing or lending: Not permitted.


2011

1.4. Disclosure requirements

Disclosure based on Applies to equities only: If a shareholder wishes to buy or sell shares and he
insider trading or its affiliated persons* is considered an “insider”, the shareholder must declare
its intention, and how many shares are to be bought and/or sold in a given period
(including substantial (maximum two months), to the SSC, the stock exchange (HSX or HNX) and the
shareholders) company at least 3 days before trading any amount of shares. Upon receipt of
the notice, the stock exchange will advertise the information on its website and
the shareholder will be allowed to trade only 24h after such information has been
advertised. Should the shareholder complete its intended trades, or should the
given period expire, whichever come first, the shareholder must declare the results
of its trades within 3 days of the date of completion or expiry, whichever come first.
If the results differ from declared intentions, he must explain why.

Investors are solely responsible for any and all disclosures. Should clients require
assistance, VCSC will be happy to help.

* see page 10 for details

Disclosure based Applies to equities only: Anytime a shareholder acquires and amount equal to
on substantial or greater than 5% of the total number of voting shares of a company, including
ownership the amounts held by its affiliated persons*, the shareholder must declare the fact
within 5 days of the date of the transaction that brought the shareholding (including
(equal or more than its affiliated persons) to an amount equal to or greater than 5%. The same applies
5% of total voting if reducing a stake below 5%.
shares)
Finally, anytime a substantial shareholder (including its affiliated persons) increases
or reduces their stake by an amount equal to or more than 1% of the total amount
of voting shares of a company since their last declaration must also declare their
new ownership level each time they pass that threshold. The law is silent as to who,
between the affiliated persons, must make the disclosure.

While VCSC will help its clients meet their disclosure obligations, according to
Vietnam laws, investors are solely responsible for any and all disclosures.

* see page 10 for details


“Insider” means:
(a) Members of the board of management and board of controllers, the director or general director and the
deputy director or deputy general director of a public company; members of the committee of representa-
tives of a public fund;
(b) Major shareholders of a public company or of a public fund;
(c) Auditors of the financial statements of a public company or of a public fund;
(d) Other persons with access to inside information of a public company or public fund;
(dd) Securities companies, securities investment fund management companies and securities practitioners
of such companies;
(e) Organizations and individuals with a business co-operation relationship with, or who provide services
to a public company or a public fund, and people working in such organizations;
(g) People who directly or indirectly obtain inside information from the subjects stipulated in sub clauses
(a) to (dd) inclusive of this clause.

“Affiliated person” means:
(a) Parents, adopted parents, spouses, children, adopted children and siblings of any such individual;
(b) Organizations in which there are individuals who are staff, the director or general director, or the owner
of more than fifteen (15) per cent of the voting shares in circulation;
(c) Members of the board of management or board of controllers, the director or general director and the
deputy director or deputy general director and other managerial personnel of such organization;
(d) People who in a relationship with another person directly or indirectly control or are jointly controlled
by such other person, or who jointly with another person are subject to the same control;
(dd) A parent company and its subsidiaries;
(e) A contractual relationship in which one person is the representative of the other.

“Affiliated person” as it applies to bank’s FOL* (slightly different from “affiliated person” under other
circumstances (as above):
(a) The parent company of that entity or any other member company that is within the same parent
company with that entity;
(b) Any person or an institution that manages the parent company or has the authority to appoint executive
officers in the parent company of that entity;
(c) Any member company or subsidiary of that entity;
(d) Any executive officer, member of the Board of Controllers, or person/ entity with authority to appoint
the executive officer of that entity;
(dd) Any shareholder or group of shareholders holding 10% or more of total common shares of that
entity;
(e) Spouse, parent, adoptive parent, children, adopted children, and brothers and sisters (and spouses
of these persons) of any executive officer, member of the Board of Controllers, or shareholder holding
10% or more of the total common shares of that entity;
(f) Spouse, parent, adoptive parent, children, adopted children, and brothers and sisters (and spouses of
these persons) of that individual;
(g) An individual authorized to represent such persons referred to in paragraphs (1), (2), (3), (4), (5),
(6), and (7) above, with respect to their authorisers and related persons of tHSX authorisers and
authorised persons.

* The “dd” in the above lists come from the translation of legal texts into English. It comes from the fact
that the Vietnamese alphabet contains both a “d” and a “d” with a bar, with the later represented as “dd”
in English.


2011

1.5. Order matching and price determination
Periodic Order Matching (HSX only): Buy and sell orders are queued for matching at a specific time at the
single lowest price that generates the highest trading volume. For example, if person (a) buys 10 shares at
100vnd, person (b) sells 3 shares at 90, person (c) sells 3 shares at 92, person (d) sells 3 shares at 95 and
person (e) sells 4 shares at 97, the matching price will be 97, where (a) will buy 10 shares, (b), (c) and (d) will
sell all their shares, and (e) will sell 1 share only. All parties transact at 97vnd/shares. This matching method
is used to determine the opening and closing price of stocks. Orders in Periodic sessions are matched at the
end of the session only, during which ATO/ATC orders have priority over Limit Orders.

Continuous Order Matching (All exchanges): The trading systems of each exchange continuously
matches the first buy and sell order in the queue, and at the same time, confirms each executed transaction
via the broker/trader’s terminal. As priority is given to the first order placed, this can make a major difference
in your strategy. For example, if a person places an order to buy stock ABC at 100vnd and another person
places an order to sell the same stock at 90vnd, the matching price will depend on who first placed the order.
If the buyer placed it first, the matching price will be 90vnd. If the seller placed it first, the matching price will
be 100vnd.

Put-Through: Price and quantity are negotiated directly between the buyer and the seller or their representa-
tive, but the deal is only concluded when it’s matched in the exchange trading system during any session
that allows Put-Through (PT). The trading system also allows brokers to advertise IOI’s to find potential
buyers/sellers. The executed price must follow the price range for that particular stock on the day the trade
is executed.

FOL intraday: When the FOL of a particular stock is reached during trading hours, all current buy orders
from foreign entities will automatically be cancelled by the system. Additionally, the systems will reject any
all buy orders from foreign entities for the remainder of the day. Sell orders are always accepted however.
Shares that foreign investors sell to non-foreign parties are added to the number of shares available to
foreign investors after the settlement period (T+3). This rule also applies to Put-Through transactions. Note
it is possible for a foreign buyer to transact a PT with a foreign seller even if the FOL for that particular stock
has reached the limit.

Opening Price: On the HSX, the opening price (aka reference price) is equal to the previous day’s closing
price as determined in session 3 (not including PT transactions). In cases where the closing price couldn’t
be determined in session 3, the closing price is equal to the last price at which shares were transacted on
that day. If no shares were traded on that day, the second previous day is taken, and so on. On the HNX
and Upcom, the opening price is the volume weighted average price (VWAP) of all order-matched orders
(excluding PT) of the previous day.

Reference price of newly listed stocks: The “opening price” of newly listed stocks is determined between
the company, the advisors and the stock exchange. If the matching price of newly listed shares/investment
fund certificates cannot be determined in the first three trading days, the issuing organization shall adjust
the expected trading price.

Ex-Dividend / Ex-Right Prices: On the ex-dividend date and/or ex-right date, the reference price shall be
determined by adjusting the last trading day’s closing price or the average price of the last few trading days,
at the company’s discretion, by the value of dividend or right accordingly.


2 Unlisted
“OTC” Securities


2011

2.1. Introduction
This part covers the process of trading unlisted securities, aka “OTCs”. The OTC market is unregulated (there
is no disclosures required either), with prices and volumes not reported to any centralized exchange or system.
The only way to obtain price information is to ask people who are active traders of OTC companies. Some
websites also colligated information and act as a marketplace for buyers and sellers. Volume information is
usually hard to obtain. The UpCom was established to provide more transparent price and volume information
for unlisted stocks. However, only a few companies have listed on that exchange and volumes are extremely
low for now.

As of January 2010, it is estimated that roughly 2,000 companies are eligible for trading on the OTC market, of
which approximately 50 are liquid and interesting enough to be considered by foreign investors. To be traded
on the OTC market, a company must be a “public company”, which in Vietnam’s legal system means a Joint
Stock Company (JSC, a type of legal structure) with over 100 shareholders. Buying OTC securities is akin to
investing in a private company and is considered by many as “private equity” investing.

2.2. Process of trading OTC securities
The role of your broker
Technically speaking, there are no obligations forcing investors to use brokers when negotiating OTC
transactions. In practice, however, many will find that using brokers can help facilitate the OTC trading
process, especially if you’re located outside of Vietnam. Moreover, several foreign investors prefer that their
brokers’ transact the shares on their behalf in a move to hide their identity and limit market impact. VCSC
can help at any and all steps of the OTC trading process.

The OTC trading Process
** Please note that the OTC trading process isn’t standardised in any way. While some brokers and traders
will “cut corners”, we consider the following process as one of the most diligent way to trade unlisted OTC
securities in Vietnam.

1. Contact the company or its registrar (depending on the size of the company) to:
a. Make sure there is room for foreigners to buy, however, if buying from another foreign party, there
is no need to verify this;
b. Know if any special rules apply to trading this company’s shares (may apply in cases of large
trades, or certain types of shares such as founding shares);
c. If buying more than 5% of the companies’ outstanding shares, approval from authorities may be
required, depending on the scope of business of the company, for both for the seller and the
buyer. It is advisable to make sure these approvals are obtained before moving forward with the
transaction

2. Find a buyer or a seller
a. Understand your counterparty (founding shareholder, fund, individual, etc);
b. Verify that the shares being sold are free to trade (certain restrictions may apply to founding shares,
shares of a member of the board, etc);
c. If buying in large quantities, brokers are often appointed to aggregate the targeted amount of
shares to limit market impact.

3. Negotiate price, quantity, timeline, deposit, settlement procedures, and anything else you deem
important with the buyer/seller. All this should be included in a Sale/Purchase Agreement (SPA).

4. Sign and seal two agreements with your counterparty:
a. Sale / Purchase Agreement (SPA);
i. Vietnamese, English or bilingual version of the SPA are accepted and enforceable in Vietnam.
In case the SPA is in English, it will have to be translated for use in court. In case of differences


between versions, the English version will prevail if provisioned for in the contract;
ii. We can provide with an English and/or Vietnamese SPAs that have been used for trading multiple
times, but we cannot guarantee it will protect you in all cases. You should consult your lawyer.
b. Share Transfer Agreement (STA) using the format required by the company or registrar.

5. Deposit (usually 10-30%, up to negotiations) by bank transfer from your capital contribution account
if you’re a foreign entity in Vietnam (any account otherwise) to the account of the seller. To make the
transfer, the bank will require:

For individuals with accounts at BIDV:
• Sales/Purchase Agreement (SPA) signed and stamped by both parties;
• Share Transfer Agreement (STA) using the format required by the registrar;
• Payment Order with passport/ ID card to prove the identity of the transferor. Note that Payment
Orders need to be signed by the account holder, unless you sign one overseas and send it by post
directly to the bank, or unless you appointed a permanent authorized person with BIDV’s.

For institutions:
• Instruction from the account holder to the custodian bank to effect the transfer of shares;

Note: Some institutions have a policy not to pay for anything unless the shares are already in their possession
(e.g. no deposit). In such case, your broker may accept to make the deposit on your behalf, provided that a
“broker contract” protecting the broker from counterparty risk is signed.

6. Register the trade with the registrar to effect the transaction. Responsibility for this can be delegated to
the buyer, the seller, or you can appoint a 3rd party to act on your behalf in which case a notarized POA
is required. If using a 3rd party, you should make sure the POA is flexible enough to allow the third party
to represent you in all parts of the OTC trading processes.

The following documents are usually required by the company or registrar to effect the transaction (may
vary on a case by case basis):

a. Sales/Purchase Agreement (SPA) signed and stamped by both parties;
b. Share Transfer Agreement (STA) using the registrar’s format;
c. Share Certificate of the Seller;
i. For individuals: If selling and your account is with BIDV, withdrawal of OTC shares in custody
must be done by the client in person unless a “Mandatory Person” has been appointed prior.
If using another custodian, please contact them for their specific requirements.
ii. For institutions: If selling, you can give instruction to your custodian bank to allow a 3rd party
to withdraw the shares in their custody. No other document is required.
d. The presence of the buyer is required to register the trade. If this cannot be arranged, you may
assign a 3rd party to effect the transaction as long as a notarized POA to this effect is provided.

The following documents may also be required, depending on the registrar. It is possible that these
documents require legalization . You should prepare multiple sets of such documents in advance just
in case.
i. Legalized2 Business Registration Certificate or Certificate of Incorporation of both the buyer
and seller (if applicable);
ii. Legalized3 List of authorized representatives of both parties (if any);
iii. Legalized4 Extracts of the charter of institutions involved in the transaction.

The registrar will normally issue a receipt once this step is completed. In some cases, the registrar may
issue the shares without issuing a receipt prior.


2011

7. Pay the balance to the seller (100% less the deposit already paid).
a. Go to your bank, make the transfer. Same requirements as in step “5”;
b. Full payment can be done earlier or later, depending on negotiations.

8. Return to the company or registrar and exchange the receipt received in step “6” for a share certificate.
Sometimes, physical shares will not be issued, but your name will be inscribed in the “share book”
a. This step aims to unregister the seller and register the buyer as the new shareholder. Normally, it
takes the registrar three (3) days to issue the share certificate to the new shareholder along with
their name on the shares.
b. The presence of the buyer is required at this step. If this cannot be arranged, you may give a POA
to a 3rd party to effect the transaction. If using a 3rd party, you should make sure the POA is flexible
enough to allow the third party to represent you in all parts of the OTC trading processes.

9. Safeguard all documents, including SPAs and STAs, in a safe place. They will be required should you
want to sell your shares and/or remit your money abroad.
a. Individuals: depository of shares at BIDV must be done by the client in person unless a “Mandatory
Person” has been appointed prior. If using another custodian, please contact them for their specific
requirements.
b. Institutions: Any 3rd party can deposit shares in your account.

2.3. Conclusion
There’s room for counterparty risks for which we cannot make any guarantees, even if we are involved in the
process or acting as a representative. These risks mainly depend on the quality of the buyer/seller. Due to the
existence of such risks, some clients prefer to buy the shares from their broker after the later bought it from a
third party.

Trading unlisted OTC securities can be lucrative, especially if the company plans to list soon, but should only
be attempted by serious foreign investors. Travel to Vietnam is usually necessary at one point or another to
settle the trade, unless a notarized POA is given to an individual acting on your behalf in Vietnam.

2.4. WTO and FOL for OTC securities
The FOL for unlisted securities varies according to Vietnam’s WTO service commitments (see WTO’s website
for details). Generally speaking, industrials aren’t restricted (up to 100% is possible) except for particular
goods such as oil & gas, automobile, beer and fertilizers. Retail is restricted, but most other services aren’t.
Sectors are scheduled to open gradually to foreign participation at different dates. Note that local practices
may narrow down the framework set by Vietnam’s WTO service commitments from time to time. There are
no FOL for unlisted bonds.

To buy even a single share of an OTC bank, a foreign investor must secure the approval of the State Bank of
Vietnam (SBV). In practice, such approval has only been granted to foreign banks who pledge to be strategic
investors. This restriction does not apply to Vietnamese banks going into an IPO or tHSX already listed (see
respective chapters).

1 See Annex for details on the legalisation process
2 ibid
3 ibid

4 ibid


2.5. List of documents needed to trade OTC securities
Standard documents needed for OTC transactions:
• Share Certificate of the Seller;
• Broker Contract if you want your broker to make the deposit on your behalf (optional)
• POA for a 3rd party to act on your behalf (optional)

In addition, individuals will need to provide the following:
• Payment Order with passport/ ID card to prove the identity of the transferor (can be a 3rd party if properly
authorised);

In addition, institutions may need to provide the following:
• Legalized5 Business Registration Certificate or Certificate of Incorporation (in case of institutions) of
both buyer and seller (if applicable);
• Legalized6 List of authorized representatives of both buyer and seller (if any);
• Legalized7 Extracts of the charter of institutions involved in the transaction.


2011

5 See Annex for details on the legalisation process
6 Ibid
7 Ibid


3 IPOs


2011

3.1. IPOs & auction basics
Basics
• Auction is the process through which companies raise capital by selling shares to the public. Auctions can
be organized as an IPO (initial public offering), or a SPO (secondary public offering). In this guide, we use the
term IPO, SPO, and auction interchangeably, with all meaning a public offering.
• Private placement is the process through which companies raise capital by selling shares to a limited
number of (usually) institutional investors. There are no auctions for private placements. Note that due
to Vietnam’s securities laws, shares issued through private placements are subject to a 1 year lock up
period.
• Type of Shares Offered: In an auction, companies may sell current shares or issue new shares.
• After the Auction: shares of a newly auctioned company are to be traded on the OTC market for an
indefinite amount of time before it is listed on one of the two main boards (HSX or HNX). The amount of
time is up to the company to decide, but it usually takes a minimum of 2 months for a company to list after
an IPO.
• Par Value: usually 10,000vnd per share.

Points to note
• Typical free float: By law, it is required that a minimum of 20% of all outstanding shares of a company
must be held by at least 100 shareholders who are not professional investors for a company to qualify for
listing on any exchange in Vietnam.
• Price range: On the first day of listing on the HSX, its share price may fluctuate within 20% (no limit on
HNX) of the price proposed by the Company and/or the Exchange (aka reference price). This price may not
necessarily be the average auction price. On the second day, the trading range returns to its traditional limit
(5% – HSX, 7% – HNX).
• Prospectus: Most prospectuses are only available in Vietnamese.

Who can participate in an auction?
• Domestic investors with a cash account at any commercial bank in Vietnam.
• Foreign investors with a Capital Contribution Account with any banking institution in Vietnam.
• Requirements: It is not necessary to have a trading code or an account with a securities company to
participate in an IPO or SPO, but this is required if you want to sell your shares once they are listed on the
HSX or HNX (not if you trade while the shares are traded on the OTC market).

Auction disclosure / announcement requirements
• Auction information must be published in key financial magazines and websites of trading centers or
securities firm conducting the auction 20 days prior to the auction date.
• Shares can only be allocated once the prospectus has been announced and made available to investors.
• Websites: www.hsx.vn (for HSX) and www.hnx.vn (for HNX).

Foreign ownership limit
• With respect to 100% state-owned enterprises under equitization (privatisation) process through IPO, foreign
investors shall be able to buy shares at the rate indicated in the equitization plan approved by the competent
authority, but not exceeding 49% of the total amount of outstanding shares available;
• With respect to 100% State-owned enterprises which are equitized through other forms, the maximum
foreign ownership shall be in accordance with the plan approved by authorities.

Strategic Investors
Decision 36/2003/QD-TTg from the Ministry of Finance stipulates that “if foreign investors desire to become
strategic investors of Vietnamese enterprises, they must have the financial capacity and ability to support
Vietnamese enterprises in developing, improving ability of administration and management and apply of modern
technology, and have close relations with enterprises on a long term basis in terms of interests, and satisfy
specific criteria set out by the enterprises”.


How a strategic investor is cHSXn may vary depending in the situation:
• In cases where the entity is a SOE, strategic investors will be sought after and assigned by the State.
Where the SOE is a large corporation such as a bank or telecom, the SOE may seek and choose its
strategic investor by itself.
• In cases where the company is a private entity, strategic investors may actively seek for a strategic
relationship. Relationship is then established depending on negotiation.
• In cases where an IPO or SPO has been planned with an advisory firm, the advisor may suggest and act as an agent
in approaching potential strategic investors.
Strategic investors are free to approach a company directly unless the later is a state owned entity in which
case the investor should approach the Government of Vietnam or its representative body (such as the SCIC,
or State Capital Investment Corporation).

3.2. How to participate in an auction in Vietnam
1) Deposit: Compulsory deposit to participate in an auction is 10% of the total VND amount you intend
to subscribe to, based on the reference price and your desired number of shares. The amount must be
sourced from your capital contribution account in Vietnam.

2) Registration: you need to register with any auction agent by providing the necessary documents
(detailed documentation described in the next section).
a) The duly completed registration package must be received before the “time of registration”
announced. The actual deadline is provided for each auction, but usually is 10 days from the
moment the auction is announced.
b) Make the 10% deposit.
c) Fax all documents, including bank transfer receipt, to VCSC for advance registration. Original
copies must be received before the “time of registration” date.
d) The registration must indicate the number of shares you intend to buy, but not the price.

3) Processing: Once your package is received, details are entered in the stock exchange system which
issues your Bidding Papers – sent to foreign investors by express courier. Cost for the courier is billed
separately.

4) Bidding: upon receipt of the Bidding Papers, you must complete and return them to the auction agent
by express mail before the “time of price submission”.
a) You will lose your deposit if:
i) your bidding price is lower than the reference price;
ii) your bid is received after the deadline;
iii) you buy less than the same amount of shares you “registered” for.
b) For certain auctions, investors may give various bidding prices for various lots of shares provided
that the total amount of shares is equal to the number you registered for. Auctions that allow such
pricing explicitly say so.

5) Physical presence: investors may, if they so wish, participate in the actual auction being held at the
stock exchange or security firm helping with the share issuance. There are no advantages in being
present other than seeing other bidders’ prices. You may elect for someone else to be present in lieu.

6) Cancellation of participation: Where an Investor wishes to cancel its participation in an auction, the
Investor must fill in the proper cancellation form and must be received by your auction agent before the
“time of registration” deadline. You will still lose your deposit otherwise.

7) Winning and losing: Two (2) days after the auction date, investors will be informed as to whether their
bid is successful or not. Shares are automatically allocated to the highest bidder and so on until all
shares have been allocated.


2011

a) If your bid is a winner, you usually have 15 days to pay the 90% of your purchase to your auction
agent. Failing to do so, your shares and deposit are automatically forfeited. The exact deadline
should be provided by your auction agent. Companies have to complete the allocation of shares
to winners within 90 days. Share certificates are usually issued within 60 days from the date the
allocation of shares is completed and sometimes longer. Note that it is possible for you to sell your
shares before fully paying for your purchase. Ask your broker how.
b) If your bid fails, your deposit will be returned by the company within 30 days of the IPO closing
date, in practice it’s usually 5-7 days.

3.3. Where to send your deposit and money
Account beneficiary: Viet Capital Securities Joint Stock Company
Account number: 119.10.000.10726.0
Bank: BIDV – Nam Ky Khoi Nghia Branch
Address: 12-14 Nam Ky Khoi Nghia, District 1, Ho Chi Minh City
Swift code: BIDV VNVX
Note: For the benefice of [company] IPO

3.4. Auction example
Company ABC is issuing 3,600,000 shares in an IPO at a floor /reserve /reference price 40,000 VND. Let<s say
you’re bidding for 1,000 shares, the deposit required to register for the auction is therefore calculated as follows,
deposit = (10% * 1,000 shares * 40,000 VND/ shares). In this example, the deposit would equal to 4 million VND.

Let’s assume that the above auction is oversubscribed. The highest bid submitted is 110,000 VND while
the lowest bid submitted is 43,000 VND. Winning bids range from 50,000 to 110,000 VND. Shares are
allocated to the highest bidders first, followed by the subsequent highest bidder and etc until all shares are
distributed. In this case, anyone who bid lower than 50,000 VND won’t obtain any shares and their deposit
will be refunded by the company.

3.5. VCSC as an auction agent
All documents described in this section should be sent to your auction agent. There’s usually more than one
authorized auction agent for any given auction. It is not required to have a brokerage account with VCSC to
forward your auction registration package to VCSC. If VCSC isn’t an agent, both clients and non-clients need
to submit their package to one of the authorized auction agent. VCSC will help its clients to do so.

3.6. Auction registration (checklist)
i) For institutions (checklist)
Documents Special requirements

• Registration form (provided by your auction agent for each auction) Signed and (if applicable)
stamped

• Certificate of incorporation of your institution (You should already Legalized*, then
have a copy – one of the requirements to open an account with a translated in Vietnamese
custodian) and notarized

• Document indicating the names of legal representatives of your Legalized*, then
institution (You should already have a copy – one of the requirements translated in Vietnamese
to open an account with a custodian) and notarized


• Passport copies or ID cards of the applicant and legal
representative of the institution (if both aren`t the same)

• Certificate or Letter from your bank that you have a Capital Original or notarized copy
Contribution Account (foreign institutions only)

• Bank slip proving that the deposit amount was transferred to your
auction agent’s account

• Letter of Authorization (provided by the auction agent – only needed Legalized* (VN institutions
if the signatory isn’t the legal representative) need only stamp)

*See Annexes for details on legalization

ii) For individuals (checklist)

Documents Special requirements

• Registration form (provided by the auction agent for each auction) – Stamped by your bank at
Transfers need to be done by the account holder in person. the time you transfer your
deposit to the auction agent.

• Passport copies or ID cards of the account holder and the
authorised person (if any)

• Bank slip proving that the deposit amount was transferred from your
Capital Contribution Account to the auction agent account

• Letter of Authorization (provided by the auction agent) only needed if Legalized*
the person signing the registration and bidding isn’t the account holder)

• *See Annexes for details on legalization

3.7. Background information on share offerings in Vietnam
Requirements before conducting an IPO
• Being a joint stock company or equitized SOE;
• Having an actual minimum prescribed charter capital of VND10 billion;
• Having been making profit in the year before the date you apply for IPO, as well as having a healthy
financial status and development prospects;
• Having a reasonable plan regarding the usage of the capital raised from the issuance as approved by
the Board of Management.
• The applicant’s financial statements should be audited by an auditing company approved/authorized by
the State Securities Commission. Lists of authorized auditing companies and auditors are available on
the website of the State Securities Commission www.ssc.gov.vn


2011

Requirements for listing on a main board
• Be a JSC (shareholding company) with a paid-up charter capital of at least VND 10 billion (HNX) or VND 80
billion (HSX) or more at par value;
• Have been making profits for 2 consecutive years (1 year for HNX) and have no accumulated losses at the
time the company is applying for listing;
• There must not be overdue debts that are not set in provision according to accounting rules and regulations;
the applicant must publicize all debts to the company owed by members of the Board of Directors, Board
of Supervisors, (General) Director and Deputy (General) Director(s), Chief Accountant, major shareholders
and related persons;Having a positive after-tax profit for the last two consecutive years prior to the year of
application, and having no accrued losses up to the time of listing;
• State-owned enterprises (SOEs) completing equitization and being listed on any of the two main boards
(HSX or HNX) within one year after equitization must have profitable business operations in the year right
before applying;
• At least 20% of the applicant’s voting shares must be held by at least 100 shareholders who are not
professional investors
• Members of the Board of Directors, Board of Supervisors, (General) Director, Deputy (General) Director(s),
and Chief Accountant must undertake to hold 100% of the shares they own within 6 months from the listing
date and 50% for the following 6 months, excluding the shares held by such individuals as representative of
the State.

Valuation of an IPO entity
Valuations are conducted by an independent valuing entity and the valuation must be accepted by both
contributor and founding shareholders of the company. The entity conducting the valuation may not
participate in the IPO.

Before the IPO auction takes place, the company and the underwriter need to decide on a reserve price (aka
reference price). This is usually achieved by embarking on a book-building exercise, including road shows,
which main goal is the creation and measurement of demand from investors. The underwriter attempts
to generate such demand by making potential investors aware of the company and its upside potential.
Potential investors know that their allocations will be based partly on the amount of excess demand
generated. Consequently, if they expect substantial excess demand, they will ask for a greater amount of
shares, creating an artificially high demand. Following the book-building exercise, the consultant fixes the
share price at a certain floor price (minimum one can bid) against a par value of 10,000 VND.

Lead underwriter’s commitment
The underwriter will absorb any unallocated shares if the IPO is undersubscribed. Note that in Vietnam,
however, very few securities firms actually act as underwriters. In effect, they act as advisors only, taking no
responsibility if the IPO isn’t successful.

Management and employee shares
A portion of shares is usually set aside for management and staff as a way of rewarding them. State-owned
enterprises (SOE) employees usually get around a 40% discount from the volume weighted average bidding
price of the IPO. Another possible stock option plan for employees include rewarding 100 shares for every one
year of service with the company.

8 In Vietnam, the term “equitization” is preferred to “privatization” by authorities.


3.7. Auction process flow (summary)

1- Preparation

Investors must make sure they have at
least 10% of the total VND value they
want to buy, based on the reference price,
in their capital contribution account in
Usually 15 days

Vietnam

2- Registration

Investors register with an auction agent by providing
the necessary registration documents, including:

• Registration form
• Supporting documents (see checklist on page 5-6)

Documents need to be submitted before the “time of
registration” as provided in the auction details

5a- Winning Bid!!

15 days to pay the balance (90%) to
your auction agent

Usually 2 days
5b- Loosing Bid

Deposit will be returned to investors by
the company within 30 days from the
IPO closing date, 5-7 days in practice


2011

3- Processing

When the registration package is
received, the auction agent will process it
and mail the resulting bidding papers to
the investor
Usually 10 days

4- Bidding

Bidding papers need to be filled and returned
to the auction agent before the “time of price
submission” provided in the auction details

Investors will lose their deposit if their bid
is below the reserve price or if they fail to
bid on time. It takes about 2 days to know
if you won.


4 Annexes


2011

4.1. Setting up to invest in Vietnam
To start trading in Vietnam, investors must establish relationships with a custodian and one or more brokers.
Many brokers, including VCSC, offer custody services, but the vast majority of foreign investors prefer to
custody with a bank with operations in Vietnam.

The bank
All foreign clients will have their own bank account in their own name. The bank will basically manage your
cash, currency conversion, and will open a Capital Contribution Account (CCA) for foreigners. There are
no capital controls on foreign flows.

The custodian
Custodians basically obtain your unique stock trading code from the VSD, settle your trades and manage
your corporate actions (VSD is the ultimate holder of your shares). Registration is usually straightforward
as long as all (numerous) documents are provided. They also take care of paying certain taxes on behalf of
investors. Banks and brokers both offer custody services to local and foreign clients.

The broker
The broker executes all trades and reports matched orders to the investor’s custodian at the end of each
day for settlement. Brokers, unless also acting as custodian, are not involved in the settlement process.
Brokers are only required for transactions of listed securities (equities and bonds), but may be of help for
OTC transactions as well.


4.2. List of banks offering custody services

HSBC For institutional investors only

The Metropolitain Head of Securities Services
235 Dong Khoi, District 1, HCMC Mr Puneet Gupta
Tel: +84 (8) 3829.2288 Ext: 269 puneet.gupta@hsbc.com.vn
Fax: +84 (8) 3822.7380 hssvietnam@vn.hsbc.com
Direct line: +84 (8) 3520 3269

Deutsche Bank For institutional investors only

Saigon Centre Domestic Custody
14F, 65 Le Loi Blvd, District 1, HCMC Ms Mai Thi Thuy
Tel: +84 (8) 3829 9000 ext 309 mai-thi.thuy@db.com

Citibank For institutional investors only

17 Ngo Quyen, 1F, Hanoi, Vietnam Head of Securities Services
Tel: +84 (8) 3825 1950, ext 466 Ms Susan Kleiman
Fax: +84 (8) 3936 1247 Susan.kleiman@citi.com

Standard Chartered Bank For institutional investors only

11F, Vinaconex Tower Head of Securities Services
34 Lang ha, Dong Da Mr Nguyen Trung Toan
Hanoi toan_trung.nguyen@sc.com
Tel: +84 (4) 3936 8211
Fax: +84 (4) 3248 4355

Far East National Bank For institutional and individual investors

11F, Vinaconex Tower Head of Securities Services
34 Lang ha, Dong Da district Ms Anna Phuong
Hanoi anna.phuong@fenb-vn.com

Bank for Investment and Development of Vietnam (BIDV)

12-14 Nam Ky Khoi Nghia Street For institutional and individual investors
District 1, Ho Chi Minh, Vietnam
Tel: +84 (8) 3821 8812 Manager, Depository Services
Fax: +84 (8) 3821 8813 Ms Hong
Direct: +84 (8) 3821 8812 ext 110 honglta@bnb.com.vn


2011

4.3. Rights and obligations of investors
Rights of foreign investors:
• Pledge, transfer, trade shares in accordance with prevailing laws and regulations on pledge, enterprise
and securities;
• Transfer capital which has been contributed to enterprises or to adjust the investment capital;
• Convert the invested capital (both principle and gains), sales proceeds and other amounts derived from
investment activities into foreign currencies for repatriation after fulfilling all tax obligations;
• Be equally treated as local investors when investing in a joint stock company, limited liability company or
partnership company;
• Participate in managing the company in accordance with the Enterprise Law and the company’s
charter.

Obligation of foreign investors:
• Comply with conditions and commitments for capital contribution and share purchase;
• Comply with provisions stipulated in the law and the company’s charter;
• Pay taxes in accordance with prevailing tax regulations;
• Comply with other relevant laws and regulations.

4.4. Capital flows
There are no explicit capital controls in Vietnam. However, availability of foreign currencies is not guaranteed.
There are no FX restrictions or quotas and FX forwards are allowed for genuine underlying transactions. The
SBV fixes the USD/VND target rate on a daily basis and the inter-bank market is permitted to trade within a
certain band (± 3% from the target rate at time of writing).

Source of capital
Foreign investors are entitled to purchase securities in Vietnam provided the source of funds is legal, such as:

1. Foreign currency remitted from abroad into Vietnam in accordance with current provisions on foreign
exchange control;
2. Distributed profits of from direct investment activities in Vietnam;
3. Receipts of foreign investors from the transfer, liquidation, dissolution of their direct investment activities
in Vietnam in accordance with provisions of applicable laws;
4. Salaries, bonuses and other legal income of foreign individuals in Vietnam in accordance with provisions
of applicable laws;
5. Other sources if accepted by the State Bank.

Remittances
After having fulfilled their tax obligations to the State, foreign investors are entitled to purchase foreign
currency at authorized banks to remit overseas. Custodian banks usually take care of this for their clients.


4.5. Taxes
Tax laws in Vietnam, as in many countries, are complex. Vietnam has double-taxation agreements
(DTAs) with over 60 countries which do change applicable tax rates for organizations and individuals of
certain countries. Moreover, practices in Vietnam can differ from the letter of the law and are subject to
frequent changes.

VCSC is not a tax consultant and the following is intended for general guidance only and should not form the
basis of any specific decision. Note that DTAs may change the rates described below. Please contact your
tax attorney should you need specific advice.

Applicable taxes
All taxes are deducted at the source by the issuer or your custodian.

Foreign institutions Foreign individuals
(non-tax resident) (non-tax resident)

(Foreign and Vietnamese residents,
also see note below)**

Equities o Capital gains: 0% o Capital gains: 0%
o Cash dividends: 0% o Cash dividends: 5%
o Cash dividends from listed fundcertificates: o Cash dividends from listed fund
Varies certificates: Varies
o Tax on sales proceeds*: 0.1% o Tax on sales proceeds*: 0.1%

Bonds o Interest (coupon): 10% o Interest (coupon): 5%
o Tax on sales proceeds*: 0.1% o Tax on sales proceeds*: 0.1%

Money Market o Term deposit: N/A to non-residents o Term deposit: N/A to non-residents
o Certificate of deposit: 10% o Certificate of deposit: 0%
o Current account: 10% o Current account: 0%

* Taxes on sales proceeds are levied when investors sell securities only, not when they buy. The tax is
levied automatically by your securities broker or your custodian (varies depending on each situation).

** The same tax rates apply to “tax residents” and “non-tax residents” of Vietnam of any nationality. However,
Vietnam tax residents (Vietnamese and foreign individuals who reside in Vietnam for 183 days or more in
a fiscal year) may choose to pay a 20% capital gains tax instead of the 0.1% tax on sales proceeds. That
being said, the amount of paperwork required to take advantage of this tax scheme seems onerous and
we do not believe many individuals will choose such a scheme. You should consult your tax authorities to
find out how you can benefit from such scheme as this is a personal income tax matter and your securities
broker or custodian cannot help.

4.6. Board membership
Whether an investor is entitled to a board seat is entirely subject to the company’s charter. In general, with a
stake of at least 10%, investors may request to nominate one (1) person. However, shareholders must vote
in favour of the motion for such a nomination to be accepted.


2011

4.7. Legalization process
If residing in Vietnam
• Having your documents recognized and stamped by your home country embassy or consulate in Viet-
nam.

• Having your documents authorized by the Ministry of Foreign Affairs (MOFA) of Vietnam in Hanoi or the
External Relations department in Ho Chi Minh City (6 Alexandre de Rhode, D1).

• When translation is required (as for the certificate of incorporation); have your documents simul-
taneously translated in Vietnamese & notarized. Contact your local People’s Committee or send us the
documents and we’ll have it done in Vietnam (service fees apply). Allow 2 week for translation.

Tip: once the translation is done, you should ask your local People’s Committee for several notarized copies
(stamp is cheap) for future uses – you’ll need them.

If residing outside of Vietnam
Please contact the Embassy of Vietnam in your country for guidance on the exact procedure as it does vary
from one country to the other. For example, the role of MOFA (step 2) is executed by the Department of
State in the USA, the High Court in HK, etc. In some countries, step 2 isn’t required. The important is that the
Vietnamese Embassy in your country stamps it.

• Having your documents notarized by a notary public in your home country.

• Having your documents recognized and stamped by the Ministry of Foreign Affairs (MOFA) of your
home country (or Department of State in the USA).

• Having your documents recognized and stamped by the Vietnamese Embassy or Consulate in your
home country.

• When translation is required (as for the certificate of incorporation); have your documents
simultaneously translated in Vietnamese & notarized. The consulate or embassy of Vietnam in your
home country should be able to help you with this, or you can send the documents to us and we’ll have
it done in Vietnam (service fees apply). Allow 2 week for translation.

Tip: once the translation is done, you should ask your consulate or embassy of Vietnam in your home coun-
try for several notarized copies (stamp is cheap) for future uses – you’ll need them.


Viet Capital Securities
67 Ham Nghi, District 1, Ho Chi Minh City, Vietnam
Tel: +84 8 3914 3588
Email: sales@vcsc.com.vn
Web: www.vcsc.com.vn
Bloomberg: VCSC <GO>

Institutional Brokerage
Michel Tosto,
michel.tosto@vcsc.com.vn

Research
Marc Djandji,
marc.djandji@vcsc.com.vn

Investment banking
Hoan Dinh,
hoan.dinh@vcsc.com.vn

Guide to vietnam securities 2011

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