Tilleke & Gibbins’ project finance specialists in Vietnam have contributed the Vietnam chapter to Project Finance 2024 from The Legal 500. The guide, which is part of The Legal 500’s Country Comparative Guides series, furnishes investors and businesses with key information related to project finance in jurisdictions around the world. Each Q&A-style chapter provides in-depth details on the legal regimes affecting a wide range of project financing topics, including: Ownership structures and corporate governance; Security interests, regimes, and enforcement; Regulatory requirements and consents; Foreign exchange considerations; Environmental, social, and governance (ESG) issues; Public-private partnerships; Foreign judgments; Tax considerations; Common funding structures; and Insurance law principles. Tilleke & Gibbins also authored the Thailand chapter of Project Finance 2024. The Vietnam chapter of the guide is available as a PDF through the button below, courtesy of The Legal 500. The full guide is accessible for free on The Legal 500 website.

On August 23, 2023, the State Bank of Vietnam (SBV) issued Circular No. 10/2023/TT-NHNN (“Circular 10”), suspending the implementation of certain provisions of Circular No. 06/2023/TT-NHNN (“Circular 06”) concerning the offering of onshore loans to customers by credit institutions, including commercial banks and foreign bank branches. (See our previous coverage of Circular 06 here.) Both Circular 06 and Circular 10 will take effect on September 1, 2023. Circular 10 re-allows three categories of loans that credit institutions were not allowed to provide under Circular 06, including: Loans for making or acquiring capital contributions or shares in other companies which have not yet been listed on the securities market or registered for trading on the unlisted public company market (UPCoM) system. Loans for paying capital contributions under capital contribution contracts, investment cooperation contracts, or business cooperation contracts for implementation of investment projects that fail to satisfy conditions for being put into business operation. Loans for financial reimbursement. This change is a result of the working session between Deputy Prime Minister Le Minh Khai and the Governor of the State Bank of Vietnam to consider loosening restrictions for loans to borrowers after the issuance of Circular No. 06/2023/TT-NHNN.

On September 1, 2023, Circular No. 06/2023/TT-NHNN (“Circular 06”) issued by the State Bank of Vietnam on June 28, 2023, will take effect. This circular introduces noteworthy amendments to the regulations concerning the offering of onshore loans to customers by credit institutions (including commercial banks and foreign bank branches). Introducing New Lending Restrictions but Loosening Refinancing Restrictions Circular 06 introduces several new categories of loans that credit institutions are not allowed to provide. These include loans for depositing money in accounts; loans for making or acquiring capital contributions or shares in other companies which have not yet been listed on the securities market or registered for trading on the UPCoM system; and loans for paying capital contributions under capital contribution contracts, investment cooperation contracts, or business cooperation contracts for implementation of investment projects that fail to satisfy conditions for being put into business operation. [However, Circular No. 10/2023/TT-NHNN, issued shortly before Circular 06 was to take effect (see related story here), suspended the restrictions on the latter two categories until further notice.] A new exception in Circular 06 allows credit institutions to offer loans for repaying foreign loans if the foreign loans were granted in the form of deferred payment for purchase of goods. Circular 06 also amends an exception of the previous regulations that new loans for repaying foreign loans or onshore loans from other credit institutions can be offered, as long as the term of the new loan does not exceed the remaining term of the original loan and the refinanced loan has not yet undergone any repayment rescheduling. This exception removes a requirement under the previous regulations that the original loan had to be made “for business purposes.” Further, Circular 06 introduces the term “financial reimbursement” (“cho vay bù đắp tài chính” in Vietnamese) whereby credit

In recent years, Vietnamese companies have shown increased interest in listing their shares or depository receipts (where a bank acts as custodian of underlying shares) on foreign stock exchanges. These overseas listings offer undeniable advantages, such as access to capital at high valuation, the improvement of corporate management and internal control with higher transparency and efficiency, the enhancement of stock liquidity for foreign shareholders, and increased visibility on the global market. However, the process for overseas listing is costly and time-consuming, and companies would be well advised to gain a basic understanding of the process before deciding to enter foreign stock markets. In general, to list on a foreign stock exchange, a Vietnamese company can consider the options of either (i) dual listing or (ii) restructuring as a subsidiary of an offshore parent who will list overseas. Dual Listing Dual listing allows a company to be concurrently listed on a Vietnamese stock exchange and on one or more foreign stock exchanges, such as those in Singapore, the U.S. or the U.K. This option is subject to conditions and procedures under the securities laws of Vietnam, which primarily include the Law on Securities of 2019 and its guiding Decree No. 155/2020/ND-CP. A Vietnamese company may only proceed with offshore initial public offering (IPO) procedures in accordance with foreign laws after obtaining approvals from the State Securities Commission of Vietnam (SSC) for overseas listing of shares or depository receipts. Numerous requirements apply, including, among others: Being a listed company in Vietnam; Complying with Vietnamese regulations on foreign ownership limitation and foreign exchange management; Adopting a resolution by the General Meeting of Shareholders to approve the overseas listing; Obtaining approval from the specialized authorities if the company to be listed engages in conditional business operations (e.g., the State Bank of Vietnam for