vipc- foreign indirect investment in vietnam
DESCRIPTION
1. Who are foreign investors? 2. What must a foreign investor do? 3. What must a foreign investor not do? 4. Making the investment 5. Appointment of a transaction representative 6. Engaging a local fund manager 7. Reporting 8. What's missing? (Fee, Tax)TRANSCRIPT
June 2010 1VIPC Viet Investment Power
FOREIGN INVESTMENT IN VIETNAM(Indirect investment in stock market)
Contact information
• VIPC Capital Management Corporation• 2nd Flr. 8 Nguyen Hue St., Dist.1, HCMC, Vietnam• Tel: (84-8) 38277478/79 – Fax: (84-8) 38277488• Email: [email protected] - www.vipc.com.vn
VIPC Viet Investment Power 2June 2010
Foreign investment in Vietnam's securities market
CONTENTS
1. Who are foreign investors? 2. What must a foreign investor do? 3. What must a foreign investor not do? 4. Making the investment 5. Appointment of a transaction
representative 6. Engaging a local fund manager 7. Reporting8. What's missing? (Fee, Tax)
VIPC Viet Investment Power 3June 2010
1. Who are foreign investors?
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Foreign citizens, including Viet Kieu (ie. overseas Vietnamese);
Entities established offshore• Branch offices in Vietnam• 100 per cent foreign-owned enterprises
incorporated in Vietnam• Offshore investment funds• Vietnam domiciled investment funds with 100 per
cent foreign ownership.
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2. What must a foreign investor do?
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Foreign investors who invest in listed and unlisted securities or participate in securities auctions in Vietnam must:– Obtain and register a securities trading code (the Code) with
the VSD – a foreign investor may have only one Code; and – Open an indirect investment capital account at any bank that
is authorized to provide custody and foreign exchange services.
If a foreign investor chooses to invest using a local fund manager then that fund manager will apply and register the Code for the investor.
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3. What must a foreign investor not do?
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A foreign investor's Code may be suspended or terminated if the investor:– Provides inaccurate or deceptive information in relation
to the application for the Code or other information as required by the SSC;
– Engages in illegal practices such as collusion, market manipulation or money laundering; or
– Breaches foreign exchange regulations.
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VIPC Viet Investment Power Presentation Template 7
4. Making the investment
Three ways for a foreign investor to make a securities investment in Vietnam:
• The foreign investor directly carries out the transaction by instructing a securities company to place the order;
• The foreign investor appoints a transaction representative to place the order for the foreign investor; or
• The foreign investor engages a local fund manager to manage the foreign investor's securities investment.
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VIPC Viet Investment Power Presentation Template 8
5. Appointment of a transaction representative
A foreign investor may appoint only one individual in Vietnam under a power of attorney– The attorney must hold a securities business practicing
certificate issued by the SSC;– The attorney must not be an employee of any local
securities company, fund management company or custodian bank;
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VIPC Viet Investment Power Presentation Template 9
6. Engaging a local fund manager
• A local fund manager under an investment management agreement to carry out portfolio and asset management and make investment decisions for the foreign investor (including decisions in relation to the type of securities, volume, price and trading date)
• A foreign investor may not engage any other individual or entity to carry out such management activities for the investor.
• Vietnam representative offices of offshore funds which are currently carrying out these functions are doing so illegally.
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7. Reporting
Securities companies, fund managers and transaction representatives are required to report periodically to the SSC on the securities transactions of the foreign investor using a standard form
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Personal income tax ( for individual)• 20 per cent of the net gain or • 0.1 per cent of the value of the securities transfer
Enterprise income tax ( for institute)• 0.1 per cent of the value of the securities transfer
Capital investment tax ( for investor)• 5 per cent of the net gain
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8. What's missing?
June 2010
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Investment entrustment process
Remit fund
Indirect investment capital account
Custodian account VIPC
VIPC executing investment
Client’s trading account
AllocationTerminating agreement
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• Fee for investment portfolio (VIPC):
• Broker fee (Securities company):
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Fee
2% annual
NAV
Fee of asset
management
0,1% Transact
ion value
Broker fee
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Custodian fee and asset keeping (custodian bank):
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Fee
0,01%
Total value of
a transacti
on
Fee on transacti
on
1/12 x 0,06%
NAVCustodia
n fee
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• Individuals (one of the following case)
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Tax ( mention above)
Net gain
20%Personal income
tax
the value of the
securities transfer
0,1%
Personal
income tax
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• Institutes
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Enterprise income tax (Mention above)
the value of the
securities transfer
0,1%
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Capital investment tax
Net gain 5%
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Thank you
VIPC Viet Investment Power 18
VIPC Capital Management Corporation8 Nguyen Hue St., Dist.1, HCMC, Vietnam
Tel: (84-8) 38277478/79 – Fax: (84-8) 38277488Email: [email protected] - www.vipc.com.vn
THANK YOU!
June 2010