As of December 2022, the Vietnamese stock market encompasses around 2,162 enterprises, with the Ho Chi Minh City Stock Exchange (HOSE) having 402 listed companies, the Hanoi Stock Exchange (HNX) hosting 341 listed companies, and the Upcom Trading System featuring 856 companies registered for trading. It is evident that after more than 25 years of operation, the Vietnamese stock market is progressively expanding, evolving into a robust capital mobilization channel for the economy.
In addition to the successful listing of public companies on stock exchanges, there are still many other companies that aspire to list their securities but lack legal knowledge of the process. For its purposes, this article will focus on analyzing the relevant regulations in order to outline the listing process for common joint-stock companies.
1. Conditions for listing of securities
Listing of securities means the putting of qualified-for-listing securities in trading in the listed securities trading system. Currently, the trading system for listed securities is organized and operated by the Vietnam Stock Exchange and its subsidiary companies (HOSE and HNX).
To list its securities, an enterprise shall satisfy the following conditions:
- It is a joint-stock company with contributed charter capital at the time of listing registration of VND 30 billion or more based on the latest audited financial statement, and at the same time, the capitalization reaches at least VND 30 billion calculated according to the weighted average of the payment price of stocks in the latest public offering in accordance with this Decree or the reference price of stocks traded on the Upcom Trading System on average 30 sessions prior to the time of submission of listing registration dossiers or average of the weighted average of the payment price in the first sale of shares of the equitized enterprise;
- The listing has been approved by the Shareholders’ General Meeting; has been trading on the Upcom Trading System for at least 02 years, except for the case the organization registering for listing has carried out public offering of stocks or the enterprise is equitized;
- The after-tax profit rate of return on equity (ROE) of the year preceding the year of listing registration equal to at least 5% and business activities of the two consecutive years preceding the year of listing registration being profitable; having no debt overdue for more than 01 year as of the year of listing registration; having no accumulated loss based on the latest audited annual financial statement or the examined biannual financial statement in case of registering for listing after the end of the biannual financial statement period;
- Except for the case where an enterprise is equitized, the organization registering for listing must have at least 15% of the voting shares held by at least 100 non-major shareholders; in case the charter capital of the organization registering for listing is VND 1,000 billion or more, the minimum percentage is 10% of the shares with voting rights;
- Individual and institutional shareholders whose ownership representatives are Chairpersons of the Board of Directors, Members of Board of Directors, Head of Supervisory Board (Supervisors), Chief Executive Officers, Chief Operations Officers, Chief Accountants, Chief Financial Officers and other managers voted by the Shareholders’ General Meeting or appointed by the Board of Directors and major shareholders who are affiliated persons of the above persons must commit to holding 100% of the stocks owned by them for 06 months after the first trading date of stocks on the Stock Exchange and 50% of these stocks within the subsequent 06 months, excluding the stocks under state ownership owned by the above individuals representing to hold;
- The company, the at-law representative of the company has not been handled for a violation within two years up to the time of registration for listing due to the conduct of prohibited acts in securities operations and securities market as specified in Article 12 of the Law on Securities;
- The company has received a securities company’s consultancy on its dossier of registration for listing, unless the organization registering for listing is a securities company.
2. Options to become a listed company
Listed company means any company whose issued securities are listed for trading in the securities trading system. A common joint-stock company can choose to follow one of the two following options to become a listed company:
| Implementation steps | Option 1 | Option 2 |
| Step 1 | Its capital structure and number of shareholders satisfy the conditions for becoming a public company as follows:
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Has completed an initial public offering (IPO) of stocks as registered with the State Securities Commission.
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| Step 2 | Submit a public company registration dossier to the State Securities Commission within 90 days after it completes the capital contribution and has a shareholders’ structure satisfying the conditions. | Send a report on results of completion of the IPO and the written certification of the bank about the proceeds from the IPO within 10 days from the end of the IPO to the State Securities Commission in order to complete the registration as a public company. |
| Step 3 | Trading in full 2 years on the Upcom Trading System and satisfying securities listing conditions. | Submit the dossier for securities listing registration to the Stock Exchange within 30 days after the public offering is completed. |
| Step 4 | Submit the dossier of registration for stock trading in the Stock Exchange. |
Disclaimers:
This article is for general information purposes only and is not intended to provide any legal advice for any particular case. The legal provisions referenced in the content are in effect at the time of publication but may have expired at the time you read the content. We therefore advise that you always consult a professional consultant before applying any content.
For issues related to the content or intellectual property rights of the article, please email cs@apolatlegal.vn.
Apolat Legal is a law firm in Vietnam with experience and capacity to provide consulting services related to IPO & Capital Raising and contact our team of lawyers in Vietnam via email info@apolatlegal.com.
