Government tightens rules for financial firms

Joint venture or wholly-foreign invested financial companies must have total assets worth more than US$10 billion by the end of the year before applying for license, according to Government Decree No 81/2008/ND-CP issued on Wednesday.

Financial companies are not allowed to provide payment services or receive less than one-year deposits.

They may, however, issue bonds and certificates of deposit to attract capital.

They are also allowed to use their equity, deposits and other capital sources to lend, invest and provide financial consulting services.

A joint venture financial company is defined as: a financial company set up in Vietnam through capital contribution by a Vietnamese partner (including one or more than one credit institution or enterprise) and foreign partners.

Foreign holdings are capped at 49% of charter capital.

A wholly-foreign invested financial company is defined as: a financial company set up in Vietnam with 100% of capital deriving from one or more than one foreign credit institutions.

At present, financial companies are established and operated in Vietnam in the forms of State-owned financial companies, joint stock financial companies, joint ventures, wholly-foreign invested companies and financial companies that belong to credit institutions.

ND

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