Foreign investor in Viet Nam’s fund management sector: Legal highlights

In the context of Vietnam’s stock market experiencing robust growth and deeper international integration, the demand for establishing foreign-invested fund management companies has been steadily rising. Foreign investors seeking to participate in fund management activities not only aim to capture the country’s growth potential but also to take advantage of Vietnam’s increasingly open legal framework and policies. According to statistics from the Ministry of Planning and Investment, as of August 2025, the total registered foreign direct investment (FDI) in Vietnam reached over USD 24.09 billion¹⁶, with the financial and securities sector accounting for a significant proportion. This article will examine the establishment process, legal requirements, and key considerations to support foreign investors in seizing opportunities in Vietnam’s market while ensuring strict compliance with applicable regulations. 

1. What is a fund management company? 

A fund management company is an enterprise organized in the form of a limited liability company or a joint stock company in accordance with the Law on Enterprises¹⁷, licensed by the State Securities Commission to establish and conduct securities business operations. Its activities include the management of securities investment funds, portfolio management, and securities investment consultancy¹⁸. 

2. Market access conditions 

With respect to international commitments, Vietnam adheres to its Schedule of Commitments on Services under the WTO. Specifically, in the securities services sector, Vietnam imposes no restrictions on foreign ownership in services related to the securities market. Foreign investors are permitted to establish wholly foreign-owned enterprises or joint ventures, provided that they meet the requirements regarding professional capacity and experience.  

Free trade agreements such as the CPTPP and the EVFTA further expand preferential treatment beyond Vietnam’s WTO commitments, thereby facilitating easier market access for investors. 

3. Requirements for establishing a fund management company 

3.1. General requirements 

To establish a fund management company, investors must satisfy strict legal requirements on capital and shareholder structure, specifically as follows: 

– Capital requirements include: The capital contributed shall be VND; the minimum charter capital is 25 billion dongs¹⁹ in order to be granted the License for Establishment and Securities Business Operation of a securities investment fund management company in Vietnam, as prescribed by the Government. 

– Shareholder and capital-contributing member requirements include ^20: 

• Shareholders and capital-contributing members must meet the following condition: An individual shareholder or capital-contributing member must not fall within the cases prohibited from establishing and managing enterprises in Vietnam as stipulated under the Law on Enterprises²¹; Shareholder or capital-contributing member organizations must possess legal person status and be lawfully operating; they must have conducted profitable business activities for two consecutive years prior to the year of the licensing application; and their most recent annual financial statements must have been audited with an unqualified opinion²². 

• A shareholder or capital-contributing member holding 10% or more of the charter capital of a securities investment fund management company, together with its related persons (if any), must not own more than 5% of the charter capital of any other securities investment fund management company²³. 

– Requirements on the structure of shareholders and capital-contributing members include: 

• There must be at least two founding shareholders or capital-contributing members that are organizations. In the case where the securities investment fund management company is established in the form of a single-member limited liability company, its owner must be a commercial bank, an insurance enterprise, a securities company, or a foreign organization that satisfies the applicable legal requirements: (i) Having been duly licensed and operating continuously in the banking, securities, or insurance sector for at least two consecutive years prior to the year of contributing capital, acquiring shares, or equity interests; (ii) The licensing authority of the home country and the State Securities Commission of Vietnam must have entered into a bilateral or multilateral cooperation agreement on information exchange, management, inspection, and supervision of securities and securities market activities; (iii) Having conducted profitable business operations for two consecutive years prior to the year of contributing capital, acquiring shares, or equity interests, and the most recent annual financial statements must have been audited with an unqualified opinion²⁴. 

• The total capital contribution ratio of organizational investors must be at least 65% of the charter capital, of which commercial banks, insurance enterprises, and securities companies must collectively hold at least 30% of the charter capital ²⁵. 

– Requirements on physical facilities include²⁶: 

• Having a head office that is adequate for conducting securities business activities; 

• Possessing sufficient physical facilities, technical infrastructure, office equipment, and technological systems appropriate for the operational procedures of securities business activities. 

– Requirements on personnel ²⁷: There must be a General Director (Director), at least five employees holding a fund management practice certificate, and at least one compliance officer. The General Director (Director) must meet the following qualifications: 

• Not being under criminal prosecution, serving a prison sentence, or prohibited from practicing securities business under the law; 

• Having at least four years of experience in professional departments of organizations operating in the fields of finance, securities, banking, or insurance, or in the finance, accounting, or investment departments of other enterprises; 

• Holding a fund management practice certificate or an equivalent certificate as prescribed by the Government; 

• Not having been subject to administrative sanctions in the field of securities and the securities market within the six months immediately preceding the time of application submission. 

In the case where a Deputy General Director (Deputy Director) is in charge of professional operations, he or she must satisfy the above-mentioned qualifications and hold a securities practice certificate appropriate to the operations under his or her responsibility. 

– A draft Charter must be prepared in compliance with the provisions of the Law on Securities and the Law on Enterprises²⁸. 

3.2. Requirements applicable to fund management companies with foreign investment²⁹ 

– A foreign organization participating in capital contribution, share acquisition, or equity purchase to own 100% of the charter capital of a securities company or a securities investment fund management company must satisfy the following conditions: 

• It must have been duly licensed and operating continuously in the banking, securities, or insurance sector for at least two consecutive years prior to the year of contributing capital, acquiring shares, or equity interests; 

• The licensing authority of the home country and the State Securities Commission of Vietnam must have entered into a bilateral or multilateral cooperation agreement on information exchange, regulatory cooperation, inspection, and supervision of securities and securities market activities; 

• It must have conducted profitable business operations for two consecutive years prior to the year of contributing capital, acquiring shares, or equity interests, and its most recent annual financial statements must have been audited with an unqualified opinion. 

– A foreign organization that does not meet the above conditions, as well as a foreign individual investor, may only own up to 49% of the charter capital of a securities investment fund management company. 

4. Procedures  

4.3. In the case of establishing a new fund management company wholly owned by a foreign organization 

• Step 1: Carry out procedures to obtain the Investment Registration Certificate. 

• Step 2: Carry out procedures to obtain the License for Establishment and Operation of the fund management company from the State Securities Commission.  

4.4. In the case of a foreign organization acquiring more than 49% of the charter capital of a fund management company 

• A foreign organization that meets the conditions specified in Section 2.2 above shall, through the relevant securities company or securities investment fund management company, submit a dossier to the State Securities Commission requesting approval for the foreign investor to own more than 49% of the charter capital³⁰. 
• Upon approval, the parties must complete the transaction within six months from the effective date of the approval decision and report the transaction results to the State Securities Commission. 

The operation of investment fund management in Vietnam with the participation of foreign investors is subject to stringent legal, financial, and personnel requirements. However, it also presents a significant opportunity for international institutions to enter Vietnam’s rapidly growing capital market. 

To ensure success, investors are advised to seek support from professional legal advisory firms in order to prepare compliant application dossiers, effectively present explanations before the State Securities Commission, and minimize potential risks during the licensing process. 

^{(16) https://baochinhphu.vn/7-thang-nam-2025-von-fdi-thuc-hien-cao-nhat-cung-ky-5-nam-10225080610172081.htm}

^{(17) Clause 2 Article 71 Law on Securities 2019}

^{(18) Clause 3 Article 2 Circular 99/2020/TT-BTC}

^{(19) Clause 3 Article 175 Law on Securities 2019}

^{(20) Clause 2 Article 75 Law on Securities 2019}

^{(21) Point a Clause 2 Article 74 Law on Securities 2019}

^{(22) Point b Clause 2 Article 74 Law on Securities 2019}

^{(23) Point c Clause 2 Article 75 Law on Securities 2019} 

^{(24) Point a Clause 3 Article 75, Clause 2 Article 77 Law on Securities 2019}

^{(25) Point b Clause 3 Article 75 Law on Securities 2019} 

^{(26) Clause 4 Article 75 Law on Securities 2019}

^{(27) Clause 5 Article 75 Law on Securities 2019}

^{(28) Clause 6 Article 75 Law on Securities 2019}

^{(29) Clause 1, 2 Article 77 Law on Securities 2019} 

^{(30) Article 144 Decree 155/2020/ND-CP}

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