{"id":1152,"date":"2021-03-18T10:07:49","date_gmt":"2021-03-18T03:07:49","guid":{"rendered":"http:\/\/blogs.duanemorris.com\/vietnam\/?p=1152"},"modified":"2021-03-18T10:07:49","modified_gmt":"2021-03-18T03:07:49","slug":"vietnam-mergers-acquisitions-country-comparative-guide","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/vietnam\/2021\/03\/18\/vietnam-mergers-acquisitions-country-comparative-guide\/","title":{"rendered":"VIETNAM – Mergers & Acquisitions Country Comparative Guide"},"content":{"rendered":"

1. What are the key rules\/laws relevant to M&A and who are the key regulatory authorities?<\/strong>
\nThere is no single document regulating M&A activities in Vietnam. The relevant rules are contained in several laws and regulations governing general corporate and investment issues. These laws and regulations include:
\n\u00b7 Investment Law No. 61\/2020\/QH14 and Enterprise Law No. 59\/2020\/QH14 issued by the National Assembly on 17 June 2020, and their guiding documents, namely Decree No. 01\/2021\/ND-CP and Decree No. 118\/2015\/ND-CP. These laws set out the general legal framework, conditional sectors and investment procedures. The authorities responsible for enforcing these laws are the:
\n\u00b7 Prime Minister;
\n\u00b7 local People’s Committee;
\n\u00b7 Ministry of Planning and Investment;
\n\u00b7 Ministry of Industry and Trade;
\n\u00b7 Ministry of Health; and
\n\u00b7 Other ministries depending on the business activities of the target companies.
\n\u00b7 Law on Securities No. 54\/2019\/QH14 issued by the National Assembly on 26 November 2019, and its implementing documents, in particular Decree No. 155\/2020\/ND-CP issued by the Government on 31 December 2020. This Law regulates the acquisition of shares in public and private companies in Vietnam, including public tender offers. The authorities responsible for enforcing the Law include the:
\n\u00b7 State Securities Commission (SSC);
\n\u00b7 Vietnam Securities Depository Centre; and
\n\u00b7 Ministry of Planning and Investment.
\n\u00b7 Competition Law No. 23\/2018\/QH14 issued by the National Assembly on 12 June 2018, which is enforced by the Vietnam Competition Authority (VCA). Under this Law, any M&A transaction that causes or may likely cause substantial anti-competitive effects on the Vietnamese market will be prohibited.
\n\u00b7 Foreign exchange regulations. An investment capital account in Vietnamese dong is a condition, among others, for capital contribution\/share purchase or subscription. These regulations are enforced by banks and the State Bank of Vietnam.
\n\u00b7 Vietnam’s WTO Schedule of Specific Commitments on Services. This sets outs the ratio of shares that can be owned by foreign investors in various specific sectors.
\n\u00b7 Other specific regulations for the acquisition of shares in Vietnamese companies operating in special sectors, such as banking and finance, insurance, and so on. These sectors are highly regulated by the relevant authorities.<\/p>\n

2. What is the current state of the market?<\/strong>
\nVietnam has remained an attractive destination for foreign investors: In 2020, the total FDI capital to Vietnam was USD28,53 billion. Investment in the form of capital increasement is the only increasing proportion of the total FDI that grew by 10,6%. Foreign investors contributed capital to domestic enterprises mainly in the field of processing technology and manufacturing (USD 13,6 billion) as well as water and energy sector (USD 5,1 billion).
\nMain investors still come from Japan, Korea, Singapore, and China. The retail, consumer goods, and real estate are also very active, and investors tend to focus on leading companies as they have a big market share and strong brand value.
\nThe main drivers of Vietnam\u2019s M&A market are:
\n\u00b7 Privatization of state-owned enterprises (SOE). According to Resolution No. 01\/NQ-CP issued by the Government in 2021, one of the key tasks in 2021 was to continue strengthening the restructuring, equitisation and divestment of SOEs. The government also aims to publicize equitized enterprises that are eligible but are not listed nor registered for trading on the stock market.
\n\u00b7 Trade liberalization as a result of CPTPP, EU- Vietnam FTA, and so on.
\n\u00b7 Resolution No. 42 on pilot program of handling bad debts of credit institutions is also the main driving force of M&A in real estate sector as bad debts in real estate sectors accounts for a high percentage of the total bad debts in Vietnam\u2019s market.
\nMajor deals:
\n\u00b7 In the middle of June 2020, according to VinGroup, a group of investors led by KKR, including Temasek, spent VND 15,100 billion VND (USD 650 million) to buy more than 200 million shares of VHM, equivalent to 6 % shares of VinHomes (a subsidiary of VinGroup).
\n\u00b7 On 9 April 2020, FWD Group announced its acquisition of Vietcombank Cardif Life Insurance Company (VCLI), a joint venture between Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) and BNP Paribas Cardif.
\n\u00b7 At the end of June 2020, after approval by the State Bank, Orient Commercial Joint Stock Bank (OCB) successfully issued 86.68 million shares to Aozora Bank from Japan, through which Aozora officially became to become a foreign shareholder owning 15% of the capital. The estimated value is more than VND 3,100 billion.
\nOCB also officially increased its charter capital from VND 8,767 billion to VND 10,959 billion in October 2020.
\n\u00b7 KEB Hana became a major shareholder of Vietnam Development Bank (BIDV) by acquiring 603.3 million shares, equivalent to 15% of BIDV’s capital, in November 2019
\n\u00b7 Bao Viet Group has completed the private issuance of more than 41 million shares, approximately 6% capital, for Sumitomo Life Insurance Company (Sumitomo Life), a strategic shareholder from Japan.
\n\u00b7 In early April 2020, Stark Corporation (Thailand) bought 100% of the shares (USD 240 billion) of Thinh Phat Electrical Cable Joint Stock Company (Thipha Cables) and JSC Non-ferrous Metal and Copper Plastic JSC. Vietnam (Dovina).
\n\u00b7 In November 2019, Thai WHA Utility and Power Company purchased 34% of equity in Duong River Surface Water JSC.
\n\u00b7 Mitsui & Co. (Japan) bought 35.1% of Minh Phu Seafood Corporation’s capital.
\n\u00b7 In April 2019, DHG Pharma officially became a subsidiary of Taisho after this Japanese unit raised its holdings to 50.78% of total shares. <\/p>\n

3. Which market sectors have been particularly active recently?<\/strong>
\n\u00b7 Processing technology and manufacturing
\n\u00b7 Renewable energy
\n\u00b7 Water and waste treatment
\n\u00b7 Pharmaceuticals
\n\u00b7 Consumer retails<\/p>\n

4. What do you believe will be the three most significant factors influencing M&A activity over the next 2 years?<\/strong>
\nThe country’s deeper and wider integration into the world’s economy is offering new opportunities for M&A activities.
\nAnother factor includes the high pressure faced by the government to privatise state-owned enterprises to meet requirements under signed trade pacts, especially the EU \u2013 Vietnam Free Trade Agreement, which came into force on 1 August 2020.
\nEncouraging signs for foreign investment include:
\n\u00b7 Reformed policies to allow wider access to foreign investors.
\n\u00b7 ASEAN Economic Community single market and production base.
\n\u00b7 The conclusion of free trade agreements (FTAs), including the EU \u2013 Vietnam FTA and The Comprehensive and Progressive Trans-Pacific Partnership (CPTPP).
\n\u00b7 Vietnam\u2019s super rich population is growing faster than anywhere else and is on track to continue leading the growth in the next decade.
\n\u00b7 Equitization of state-owned enterprises will speed up.
\nThe introduction of the new Investment Law, Enterprise Law, Resolution No. 42 on handling bad debts and other laws and policies are creating an improved legal environment for investment and trade in general, and the M&A market in particular. However, the following factors also affect M&A transactions:
\n\u00b7 Divergent interpretations and implementations by local licensing authorities of international treaties such as Vietnam’s WTO Commitments.
\n\u00b7 Different licensing procedures applied to different types of transactions (for example, for foreign invested companies and domestic companies, public companies and private companies, and for buying state-owned shares or private shares).
\nAlthough legal and governance barriers, along with macro instability and the lack of market transparency are still the greatest concerns for investors, M&A deals in Vietnam are still expected to be one of the key, effective channels for market entry.
\nThe major expected trends in the Vietnam M&A market include:
\n\u00b7 Bank restructurings.
\n\u00b7 Acquisitions and anti-acquisitions, particularly in the real estate sector.
\n\u00b7 Growing Korean, Japanese and Thai investment in Vietnam through M&A transactions.
\n\u00b7 Reform of SoEs. <\/p>\n

5. What are the key means of effecting the acquisition of a publicly traded company?<\/strong>
\nIn Vietnam, the term public company refers to a joint stock company that meets one of the following conditions:
\na) The company has a contributed charter capital of at least 30 billion VND and at least 10% of the voting shares are being held by at least 100 non-major shareholders; or
\nb) The company has successfully made its IPO by registration with SSC.
\nThe most common means of obtaining control over a public company are as follows:
\n\u00b7 The acquisition of shares\/charter capital through:
\n\u00b7 buying shares\/charter capital from the existing shareholders of the company;
\n\u00b7 buying shares\/charter capital of a listed company on the stock exchange; and
\n\u00b7 public share purchase offer.
\n\u00b7 Through a merger. The 2020 Law on Enterprises sets out the procedures for company mergers by way of a transfer of all lawful assets, rights, obligations and interests to the merged company, and for the simultaneous termination of the merging companies.
\n\u00b7 Through the acquisition of assets.
\nThere are restrictions on the purchase of shares\/charter capital of local companies by foreign investors in certain sensitive sectors. In addition, the law is silent on merger or assets acquisition (for example, business spin-off) transactions where a foreign investor is a party. Regarding other assets acquisition transactions, if the asset is a real property, foreign ownership right will be restricted according to real estate laws.
\nSecurities of public companies must be registered and deposited at the Vietnam Securities Depository Centre before being traded.
\nDepending on the numbers of shares purchased, an investor can become a controlling shareholder. Under the Vietnam Law on Securities, a shareholder that directly or indirectly owns 5% or more of the voting shares of an issuing organisation is a major shareholder. Any transactions that result in more than 10% ownership of the paid-up charter capital of the securities company must seek approval of the State Securities Commission (SSC). <\/p>\n

6. What information relating to a target company will be publicly available and to what extent is a target company obliged to disclose diligence related information to a potential acquirer?<\/strong>
\nThere is no legal requirement that a bidder must keep information about the bid a secret until the bid is made. However, this can be considered a contractual violation if the parties to the transaction have committed to secrecy in writing. Leaking information before the finalisation of the bid can lead to:
\n\u00b7 An increase of the target’s shares price.
\n\u00b7 Difficulties in negotiating the terms of the transaction.
\n\u00b7 Competition in the market.<\/p>\n

7. To what level of detail is due diligence customarily undertaken?<\/strong>
\nBefore officially contacting the potential target, the bidder conducts a preliminary assessment based on publicly available information. The bidder then contacts the target, expresses its intention of buying shares\/subscribing for its shares and the parties sign a confidentiality agreement before the due diligence process. The confidentiality agreement basically includes confidentiality obligations in performing the transaction. The enforcement of confidentiality agreements by courts in Vietnam remains untested.
\nA bidder’s legal due diligence usually covers the following matters:
\n\u00b7 Corporate details of the target and its subsidiaries, affiliates and other companies that form part of the target.
\n\u00b7 Contingent liabilities (from past or pending litigation).
\n\u00b7 Employment matters.
\n\u00b7 Contractual agreements of the target.
\n\u00b7 Statutory approvals and permits regarding the business activities of the target.
\n\u00b7 Insurance, tax, intellectual property, debts, and land-related issues.
\n\u00b7 Anti-trust, corruption and other regulatory issues.
\n
\n8. What are the key decision-making organs of a target company and what approval rights do shareholders have?<\/strong>
\nIt is necessary to obtain the approval of the general meeting of shareholders to carry out a tender offer if the acquisition is conducted by way of a transfer of shares from an existing shareholder and results in a 25% ownership or more of the voting shares in a public company. Such approval is also required when there is a share transfer of a founding shareholder of a joint stock company within three years from the issuance of the Enterprise Registration Certificate. The approval normally includes the:
\n\u00b7 Number of shares offered.
\n\u00b7 Price of the offer.
\n\u00b7 Conditions of the offer.
\nThere is no statutory requirement that prohibits a target board from soliciting or recommending other offers before completion of a transaction. However, in practice, the parties can agree on such restrictions.
\n
\n9. What are the duties of the directors and controlling shareholders of a target company?<\/strong>
\nShareholders of a public company shall:
\na) Have the right to equal treatment;
\nb) Have accessibility to information periodically and irregularly published by the company as prescribed by law;
\nc) Have their the lawful rights and interests protected; have the right to request suspension or cancellation of a Resolution or decision of the General Meeting of Shareholders or Board of Directors as prescribed by the Law on Enterprises;
\nd) Not take advantage of the major shareholder\u2019s status to influence rights and interests of the company and other shareholders as prescribed by law and the company\u2019s charter; disclose information as prescribed by law;
\ndd) Have other rights and obligations prescribed by law and the company\u2019s charter.<\/p>\n

10. Do employees\/other stakeholders have any specific approval, consultation or other rights?<\/strong>
\nThere is no requirement under Vietnamese law that the employees must be consulted about the offer. However, if a layoff is to be conducted, the employer must:
\n\u00b7 Prepare a labour usage plan.
\n\u00b7 Consult with the employee representative.
\n\u00b7 Notify the competent labour authority on the implementation of the labour usage plan.<\/p>\n

11. To what degree is conditionality an accepted market feature on acquisitions?<\/strong>
\nA takeover offer usually contains the following conditions:
\n\u00b7 The terms and conditions of the offer apply equally to all shareholders of the target.
\n\u00b7 The relevant parties are allowed full access to the tender information.
\n\u00b7 The shareholders have full rights to sell the shares.
\n\u00b7 Applicable laws are fully respected.
\nAn offer can also be subject to conditions precedent. Conditions precedent are set out in the share sale and purchase agreement or the capital contribution transfer agreement. There is no specific restriction on conditions precedent other than the requirement that they cannot be contrary to law and conflict with social ethics (although the legal definition of social ethics is unclear). The most common conditions precedent are:
\n\u00b7 Amendments to the charter\/relevant licence of the target.
\n\u00b7 Obtaining necessary approvals to conduct the transaction.
\n\u00b7 Changes to the target’s management body.
\nPayment of the contract price will only be made after the conditions precedent are met.<\/p>\n

12. What steps can an acquirer of a target company take to secure deal exclusivity?<\/strong>
\nThe acquirer can enter into an exclusivity agreement, terms sheet or letter of intent or MOU that includes a legally binding exclusivity clause. The acquirer can also make use of deal protection mechanisms such as:
\n\u00b7 No Shop Provision: included in an agreement between the seller and the buyer that prevents the latter from seeking purchase proposals from third parties in a time frame after the signing of the Letter of Intent
\n\u00b7 Termination or Breakup Fees: if the seller accepts a bid from a third party, then they will have to pay the original buyer a fee equivalent to the breakup fee
\n\u00b7 Lock-ups: seller is given part-ownership of stock or important assets in the target company
\n\u00b7 Stock options: allow the buyer to purchase a number of shares in the target company if a particular pre-agreed event occurs<\/p>\n

13. What other deal protection and costs coverage mechanisms are most frequently used by acquirers?<\/strong>
\nBesides the aforementioned, a deal protection mechanism an acquirer can make use of is matching or topping rights where the seller has to notify the bidder of any third party proposal, and the seller is entitled to match or better such a proposal.
\nCost coverage mechanisms include:
\n\u00b7 Locked Box mechanism: where the seller and buyer agree on a net purchase price upfront in the Sales Purchase Agreement and this price remains effective until the financial closing\/completion date of the transaction \u2013 recommended for fast-growing target companies
\n\u00b7 Completion Account mechanism: base purchase price, plus cash, less debt, plus excess or less shortfall in working capital<\/p>\n

14. Which forms of consideration are most commonly used?<\/strong>
\nUnder Vietnamese law, shares can be purchased by offering cash, gold, land use rights, intellectual property rights, technology, technical know-how or other assets. In practice, acquisitions are most commonly made for cash consideration. <\/p>\n

15. At what ownership levels by an acquiror is public disclosure required (whether acquiring a target company as a whole or a minority stake)?<\/strong>
\nThe offer timetable is as follows:
\n\u00b7 The bidder prepares registration documents for its public bid to purchase shares.
\n\u00b7 The bidder sends the bid registration documents to the State Securities Commission (SSC) for approval and, at the same time, sends the registration documents to the target.
\n\u00b7 The SSC reviews the tender documents within seven days.
\n\u00b7 The bidder must publicly announce the tender offer within seven days from receipt of the State Securities Commission’s opinion regarding the registration of the tender offer
\n\u00b7 The board of the target must send its opinions regarding the offer to the SSC and the shareholders of the target within 14 days from receipt of the tender documents.
\n\u00b7 The bid is announced in the mass media (although this is not a legal requirement).
\n\u00b7 The length of the offer period is between 30 and 60 days.
\n\u00b7 The bidder reports the results of the tender to the SSC within 10 days of completion.
\nCompanies operating in specific sectors (such as banking, insurance, and so on) can be subject to a different timetable.<\/p>\n

16. At what stage of negotiation is public disclosure required or customary?<\/strong>
\nThe bidder must publicly announce the tender offer within seven days from receipt of the State Securities Commission’s opinion regarding the registration of the tender offer<\/p>\n

17. Is there any maximum time period for negotiations or due diligence?<\/strong>
\nThere are no limitations (maximum or minimum) under Vietnam law on the time period in which the parties are required to conduct negotiations and\/or due diligence.<\/p>\n

18. Are there any circumstances where a minimum price may be set for the shares in a target company?<\/strong>
\nThere are no general requirements under Vietnam law that set certain minimum price for shares in a target company.<\/p>\n

19. Is it possible for target companies to provide financial assistance?<\/strong>
\nThere is no general prohibition under Vietnam law on target companies providing financial assistance to acquirers. However, such provision of financial assistance to acquirers may result in breach of fiduciary duties of directors of the target company. In this regard, the directors of the target company should be mindful of their duties to the target company because, providing financial assistance to an acquirer may be considered to be harming the target company while benefiting the majority shareholders of the target company or the acquirer, depending on the nature of such assistance.<\/p>\n

20. Which governing law is customarily used on acquisitions?<\/strong>
\nBuyer and sellers are free to decide on the governing law of the transaction agreements. Nevertheless, in deals that involve a Vietnamese target company, the governing law is customarily Vietnam laws.<\/p>\n

21. What public-facing documentation must a buyer produce in connection with the acquisition of a listed company?<\/strong>
\nShares can be bought before the bid announcement provided that the number of shares sold does not exceed the thresholds requiring a tender offer. A tender offer is required in the following cases:
\n\u00b7 Purchase of a company’s circulating shares that result in a purchaser, with no shareholding or less than a 25% shareholding, acquiring a 25% shareholding or more.
\n\u00b7 Purchase of a company’s circulating shares that results in a purchaser (and affiliated persons of the purchaser), with a 25% or more shareholding, acquiring a further 10% or more of circulating shares of the company.
\n\u00b7 Purchase of a company’s circulating shares that results in a purchaser (and affiliated persons of the purchaser), with a 25% shareholding or more, acquiring a further 5% up to 10% of currently circulating shares of the company within less than one year from the date of completion of a previous offer.
\nThere is no guidance on building a stake by using derivatives. In addition, the bidder cannot purchase shares or share purchase rights outside the offer process during the tender offer period.
\nThe bidder must publicly announce the tender offer in three consecutive editions of one electronic newspaper or one written newspaper and (for a listed company only) on the relevant stock exchange within seven days from the receipt of the State Securities Commission’s (SSC’s) opinion regarding the registration of the tender offer. The tender offer can only be implemented after the SSC has provided its opinion and following the public announcement by the bidder. <\/p>\n

22. What formalities are required in order to document a transfer of shares, including any local transfer taxes or duties?<\/strong>
\nDepending on whether the seller is an individual or a corporate entity, the following taxes will apply:
\n\u00b7 Capital gains tax. Capital gains tax is a form of income tax that is payable on any premium on the original investor’s actual contribution to capital or its costs to purchase such capital. Foreign companies and local corporate entities are subject to a corporate income tax of 20%. However, if the assets transferred are securities, a foreign corporate seller is subject to corporate income tax of 0.1% on the gross transfer price.
\n\u00b7 Personal income tax. If the seller is an individual resident, personal income tax will be imposed at the rate of 20% of the gains made, and 0.1% on the sales price if the transferred assets are securities. An individual tax resident is defined as a person who:
\n\u00b7 stays in Vietnam for 183 days or longer within a calendar year;
\n\u00b7 stays in Vietnam for a period of 12 consecutive months from his arrival in Vietnam;
\n\u00b7 has a registered permanent residence in Vietnam; or
\n\u00b7 rents a house in Vietnam under a lease contract of a term of at least 90 days in a tax year.
\nIf the seller is an individual non-resident, he is subject to personal income tax at 0.1% on the gross transfer price, regardless of whether there is any capital gain.
\nPayment of the above transfer taxes is mandatory in Vietnam. <\/p>\n

23. Are hostile acquisitions a common feature?<\/strong>
\nHostile bids are neither defined nor regulated under Vietnamese law. There is also no express prohibition on this type of transaction. Recommended bids often outnumber hostile bids due to limited publicly available information about the target and reluctance to disclose information.
\nHowever, the number of hostile bids in Vietnam has been increasing since 2011, for example:
\n\u00b7 Singapore-based Platinum Victory Ptl Ltd became Refrigeration Electrical Engineering Corp (REE)’s largest shareholder, accumulating a 10.2% interest in the company.
\n\u00b7 Chile’s CFR International Spa acquired a 46% stake in healthcare equipment company Domesco Medical Import-Export Co (DMC), making it the first foreign deal in the pharma sector.
\nDuring 2010 and 2011, there were two takeover deals in Vietnam:
\n\u00b7 The acquisition of Ha Tay Pharmacy in 2010.
\n\u00b7 The acquisition of Descon, a construction company, in 2011. Binh Thien An Company acquired a 35% shareholding in Descon, officially took over Descon and made significant changes to its management body.
\nThe Government’s Decree No. 155\/2020\/ND-CP lifted the foreign equity cap regarding public companies, with some exceptions (a 49% cap was previously in force). Specifically, the rules on foreign ownership in a listed company can be generally classified into the five following groups:
\n\u00b7 If Vietnamese law, including international treaties, provides for a specific ownership cap, the maximum foreign ownership (MFO) must not exceed such a cap (group 1).
\n\u00b7 If Vietnamese law treats a business activity as conditional on foreign investment (pursuant to the list of conditional sectors under the Investment Law) but does not yet provide any ownership limit, MFO must not exceed 50% (group 2).
\n\u00b7 In cases that do not fall within group 1 and group 2, MFO can be up to 100% (group 3).
\n\u00b7 In case a public company operates in multiple industries and trades with different regulations on the foreign ownership rate, the foreign ownership rate must not exceed the lowest level in the industries and trades with determined foreign ownership rates (group 4).
\n\u00b7 Where a public company decides on the maximum foreign ownership ratio lower than the rate specified above, the specific rate must be approved by the General Meeting of Shareholders and included in the company’s charter.
\nThis lift of the foreign equity cap can introduce more hostile bids in Vietnam. <\/p>\n

24. What protections do directors of a target company have against a hostile approach?<\/strong>
\nThere are no provisions regulating hostile bids under Vietnamese law. <\/p>\n

25. Are there circumstances where a buyer may have to make a mandatory or compulsory offer for a target company?<\/strong>
\nA tender offer is required in the following cases:
\n\u00b7 Purchase of a company’s circulating shares that result in a purchaser, with no shareholding, or less than a 25% shareholding, acquiring a 25% shareholding.
\n\u00b7 Purchase of a company’s circulating shares that results in a purchaser (and affiliated persons of the purchaser), with a 25% or more shareholding, acquiring a further 10% or more of circulating shares of the company.
\n\u00b7 Purchase of a company’s circulating shares that results in a purchaser (and affiliated persons of the purchaser), with a 25% shareholding or more, acquiring a further 5% up to 10% of currently circulating shares of the company within less than one year from the date of completion of the previous offer.<\/p>\n

26. If an acquirer does not obtain full control of a target company, what rights do minority shareholders enjoy?<\/strong>
\nMinority shareholders continue to enjoy full rights as shareholders, such as voting rights and rights to receive distributions of dividends. However, as shareholders may only participate in the management of a company indirectly through a shareholders\u2019 resolution, minority shareholders have limited right to affect the management of the company.
\nUnder Enterprise Law 2020, a shareholder or group of shareholders that holds at least 5% of the ordinary shares (or a smaller ratio specified in the company’s charter) shall have the rights to:
\na) Access, extract the minutes of meetings, resolutions and decisions of the Board of Directors, mid-year and annual financial statements, reports of the Board of Controllers, contracts and transactions subject to approval by the Board of Directors and other documents except those that involve the company\u2019s business secrets;
\nb) Demand that a GMS be convened in case
\n\u00b7 the Board of Directors seriously violates the shareholders\u2019 rights, obligations of executives or issues decisions ultra vires;
\n\u00b7 other cases prescribed by the company’s charter.
\nc) Request the Board of Controllers to investigate into specific matters relevant to the company\u2019s administration where necessary <\/p>\n

27. Is a mechanism available to compulsorily acquire minority stakes?<\/strong>
\nIf the bidder acquires 80% or more of the shares of a public company, it must buy the remaining shares of the same type of other shareholders (if they so request) at the bid price within 30 days. However, there are no “squeeze-out” rights that can force the remaining shareholders to sell their shares.<\/p>\n

***
\nFor more information on the above, please do not hesitate to contact the author Dr. Oliver Massmann under omassmann@duanemorris.com. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC, Member to the Supervisory Board of PetroVietnam Insurance JSC and the only foreign lawyer presenting in Vietnamese language to members of the NATIONAL ASSEMBLY OF VIETNAM.<\/p>\n","protected":false},"excerpt":{"rendered":"

1. What are the key rules\/laws relevant to M&A and who are the key regulatory authorities? There is no single document regulating M&A activities in Vietnam. The relevant rules are contained in several laws and regulations governing general corporate and investment issues. These laws and regulations include: \u00b7 Investment Law No. 61\/2020\/QH14 and Enterprise Law … <\/p>\n

Continue reading “VIETNAM – Mergers & Acquisitions Country Comparative Guide”<\/span><\/a><\/p>\n","protected":false},"author":24,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[93,26],"ppma_author":[1007],"class_list":["post-1152","post","type-post","status-publish","format-standard","hentry","category-vietnam-general","tag-ma","tag-vietnam"],"authors":[{"term_id":1007,"user_id":24,"is_guest":0,"slug":"omassmann","display_name":"Dr. Oliver Massmann","avatar_url":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-content\/uploads\/sites\/19\/2014\/08\/massmannoliver-125x150.jpg","author_category":"1","last_name":"Massmann","first_name":"Dr. Oliver","job_title":"","user_url":"http:\/\/www.duanemorris.com\/attorneys\/olivermassmann.html","description":"Read Oliver's bio.<\/a>"}],"_links":{"self":[{"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/posts\/1152","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/users\/24"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/comments?post=1152"}],"version-history":[{"count":0,"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/posts\/1152\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/media?parent=1152"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/categories?post=1152"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/tags?post=1152"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/ppma_author?post=1152"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}