Specifically, under Article 31 of the Law on Enterprises 2020, joint stock companies, including Registered Companies, are required to notify the Business Registration Authority of any change in shareholders who are foreign investors. This is a common administrative procedure applicable to common companies that experience changes involving foreign shareholders. This obligation is currently exempted only for listed companies (i.e., those registered on HOSE or HNX), and does not extend to Registered Companies (such as those trading on the UPCoM platform).
This creates an unreasonable distinction, as these companies have in fact already entered the capital market and are subject to oversight by securities regulatory authorities. The failure to recognize their legal particularities has resulted in several practical issues, including:
- Registered Companies are already obligated to disclose changes in shareholders through the monitoring systems of the Stock Exchange and the Vietnam Securities Depository. Nevertheless, they are still required to carry out similar administrative procedures before the Business Registration Authority, resulting in overlapping obligations that waste corporate resources and time.
- Moreover, as the shares of these companies are traded daily on the market, it is practically impossible to monitor and notify each change of foreign shareholder. This creates a compliance gap and increases the risk of unintended administrative violations.
In response to these issues, the amended Law on Enterprises 2025 (expected to take effect from July 1, 2025) has introduced appropriate adjustments, including the exemption of the notification obligation regarding changes of foreign shareholders for Registered Companies. Specifically, Clause 1, Article 31 is amended as follows:
“Article 31. Notification of Changes in Enterprise Registration Information
Enterprises must notify the Business Registration Authority upon any change to the following information:
(a) Business lines;
(b) Founding shareholders and shareholders who are foreign investors in joint stock companies, except for listed companies and companies registered for securities trading.”
The inclusion of the phrase “and companies registered for securities trading” is a significant revision, ensuring alignment between the Law on Enterprises and the Law on Securities, and avoiding regulatory overlaps and duplications. This amendment also reflects a modern regulatory approach focused on post-inspection and streamlining administrative procedures, thereby facilitating enterprises’ participation and operation in the capital market.
Accordingly, Registered Companies should promptly update their internal governance to reflect this regulatory change and ensure compliance with the applicable laws under the new legal framework.
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Disclaimers:
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