OVERSEAS INDIRECT INVESTMENT | Detail Guidance from MOF


On June 29, 2016, the Ministry of Finance (“MOF”) issued Circular 105/2016/TT-BTC (“Circular 105”) providing guidance on overseas indirect investment activities of securities trading organizations (“STO”), securities investment funds (“SIF”), securities investment companies (“SIC”) and insurance business companies (“IBC”). Circular 105 came into effect on August 15, 2016 with notable rules as follows:
  1. Overseas indirect investment activity is carried out by business organizations through:
  • STO and IBC shall apply for an application for granting a Certificate of registration of overseas indirect investment (“CROII”) for indirect investment abroad;
  • SIF and SIC shall apply for an application for an approval for overseas indirect investment;
  • A fund management company (“FMC”) shall apply for an application for granting a Certificate of registration of entrustment of overseas indirect investment;
Accordingly, STO, SIF, FMC or SIC shall apply for license at the State Securities Commission (“SSC”) - IBC apply at the MOF.
2. An overseas indirect investment activity is carried out through a self-registering method and an entrustment method of the overseas indirect investment.
  • STO, SIF, SIC or IBC need to register a limitation on overseas indirect investment as prescribed by the SBV;
  • A foreign self-registration [*] shall not invest an overseas indirect investment;
  • The self-registration, which was granted a CROII, shall not entrust the overseas indirect investment through a delegated organization;
  • FMC need to register the limitation on overseas indirect entrustment. Thereafter, FMC and a delegating organization shall draft an overseas indirect entrustment contract, which is separate from a local entrustment one.

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