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Vietnam eyes lifting of foreign ownership limits
Publication Date : 10-06-2014
Vietnam's State Securities Commission is considering raising the foreign ownership cap imposed on securities companies in the country.
"Lifting foreign ownership limits in all eligible businesses is not likely to take place as quickly as we think. The regulation may be applied to securities companies first," the commission's chairman Vu Bang told The Saigon Times.
Bang said the government had assigned the Ministry of Planning and Investment (MPI) to classify eligible industries and sectors where the foreign ownership limit can be raised. The commission is awaiting a final decision from the government, he said.
He noted the likelihood of an earlier easing of the foreign ownership limits on securities companies, saying it would be a simpler process than those involved for other businesses.
The commission plans to separate securities business from the general scheme and submit an early implementation request to the MPI, he added.
Under the proposed plan, securities companies willing to increase their foreign holdings only need endorsement of their shareholders to submit a request for the commission's approval.
Bang said the plan to raise the foreign holdings limit in securities companies sooner than the other sectors was part of the country's commitments as a World Trade Organisation (WTO) member.
Currently, foreign investorss can hold either 49 per cent or 100 per cent of the stake in brokerages or establish a wholly-owned securities firm. However, many foreign firms only want to have controlling stakes.
Since the issuance of a decree (58/2012/ND-CP) that allows foreigners to take full ownership of brokerage firms, Maybank Kim Eng is the only wholly foreign-invested firm among the 90 securities companies operating in Vietnam's stock market.
Forty companies have foreign ownership ranging from 5 to 49 per cent.