New guidance on Vietnam corporate law for listed company

ANT Lawyers – A new law provides guidance on Vietnam corporate laws for consolidated or merged companies listed on Vietnam Stock exchange has been issued by Vietnam Ministry of Finance.  The recently issued Circular 73/2013/TT-BTC specifically provides guidance on the conditions and procedures for listing shares of a company after consolidation or merger. The circular references a number of articles of the Securities Act by the Vietnam Ministry of Finance and provides guidelines for listed securities already stated in Decree 58/2012/ND-CP on Law on Securities. According to the new guidelines, listed companies that consolidate with companies that are not listed on the HCM City Stock Exchange and want to list shares after the merger, must arrange it so the unlisted company meets the following conditions before the merger takes place:

At least 2 years of operation in the form of a joint stock company by the time the company was formed after the consolidation; the after-tax rate of ROE (return on equity) for the last year must be at least 5% and the businesses and operations of two years immediately preceding the year of the merger must be profitable;
No debt overdue for more than 1 year;
No accumulated losses until the consolidation;
Finally, the company must meet the general conditions for listing securities of the Securities Decree 58/2012/ND-CP.

 This Circular is effective from the date of July 15th 2013.