Public companies, securities and foreign ownership limits: the Law on Securities as amended in 2024, Decree No. 155/2020/ND-CP as amended by Decree No. 245/2025/ND-CP, public company status, foreign ownership limits, major shareholder disclosure, tender offers, private placements and lock-ups, trading codes, delisting and the FTSE Russell upgrade

The framework

Public companies and the securities market are governed by Law No. 54/2019/QH14 on Securities, in force since 1 January 2021 and amended by Law No. 56/2024/QH15, most of which took effect on 1 January 2025. The main implementing decree is Decree No. 155/2020/ND-CP, amended by Decree No. 245/2025/ND-CP of 11 September 2025, which was issued to support the market's upgrade by index providers. Disclosure is governed by Circular No. 96/2020/TT-BTC as amended, including by Circular No. 68/2024/TT-BTC of 18 September 2024, which requires public and listed companies to publish information in English as well as Vietnamese on a phased timetable and introduced trading without pre-funding for foreign institutional investors. Sanctions are in Decree No. 156/2020/ND-CP as amended. The regulator is the State Securities Commission under the Ministry of Finance; shares trade on the Ho Chi Minh City Stock Exchange and the Hanoi Stock Exchange, which also operates UPCoM, the market for registered but unlisted public company shares; and the Vietnam Securities Depository and Clearing Corporation (VSDC) keeps the ownership records and tracks foreign holdings.

For an acquirer, the consequence is that a public company target brings a second regulatory layer on top of the Law on Enterprises and the Law on Investment. Shares change hands through the depository, the stake is monitored against the company's foreign ownership limit, disclosure duties apply at 5% and each 1% step thereafter, and acquisitions of large stakes may require a public tender offer. The general acquisition process is in Acquiring a Vietnamese company; this section deals with what is different for public companies.

What makes a company public

Under the Law on Securities, a joint stock company is a public company if it has completed an initial public offering registered with the State Securities Commission, or if it has contributed charter capital of at least VND 30 billion and at least 10% of its voting shares are held by at least 100 investors who are not major shareholders. A company that meets the second test must register as a public company with the Commission, deposit its shares with VSDC and register them for trading, at least on UPCoM; it does not have to list on an exchange, which requires meeting the separate listing conditions in Decree No. 155/2020/ND-CP. A company that ceases to meet the conditions loses its public status. Law No. 56/2024/QH15 tightened the offering side, requiring an IPO applicant's contributed charter capital to be audited and allowing the Commission to cancel an offering after it is sold where violations are discovered.

Public status changes the corporate rules too. Public companies apply the governance provisions for public companies in Decree No. 155/2020/ND-CP and the Ministry of Finance's model charter and internal governance regulations, with requirements for independent board members, related-party approvals and periodic disclosure (Legal representative and governance). Foreign investors in a public company hold through securities accounts and, as non-residents, through an indirect investment account under Circular No. 03/2025/TT-NHNN; a company whose shares become listed or registered as a public company generally closes the investment capital account it held as a more-than-50% foreign-owned company (The investment capital account).

Foreign ownership limits

Every public company must determine and notify its maximum foreign ownership ratio, commonly called its foreign ownership limit or FOL. Article 139 of Decree No. 155/2020/ND-CP sets the rules. Where a treaty to which Vietnam is party fixes foreign ownership in the company's sector, the treaty applies; where another law fixes it, that law applies. Where the company carries on a business line on the list of lines with market access conditions for foreign investors and no ownership percentage is specified, the limit is 50% of charter capital. In all other cases foreign ownership is unrestricted. A company with several lines carrying different limits may not exceed the lowest of them. Decree No. 245/2025/ND-CP removed the former power of a public company to set a lower limit by general meeting resolution and charter provision; companies that had notified a lower ratio may keep it or raise it towards the statutory level.

The company notifies its limit to the State Securities Commission, with a dossier showing its business lines, within seven working days after the Commission confirms its registration as a public company; the Commission confirms and VSDC updates the limit in its system, after which trades that would exceed the limit are rejected. Sector caps apply through this mechanism: commercial banks at 30% aggregate foreign ownership, with lower individual limits (FAQ 92), and facilities-based telecommunications at 49% (FAQ 94), for example. Shares of companies that have reached their limit trade among foreign investors at a premium, a feature index providers watch closely. The market access rules that drive the 50% default are in Market access for foreign investors, and the list of conditional lines changes again on 1 March 2027 under Law No. 24/2026/QH16.

For a negotiated purchase of a block in a public company, the depository and FOL regime is the primary control. Whether an Article 21 registration under the Law on Investment is also required for a foreign purchase that takes foreign ownership of a public company above 50%, or increases it in a conditional line, should be confirmed with the registration authority and the securities company handling the transfer before signing, since practice has differed between the two regimes.

Disclosure of significant holdings

A major shareholder is one holding 5% or more of the voting shares, alone or with related persons. Under Circular No. 96/2020/TT-BTC as amended, an investor that becomes or ceases to be a major shareholder, or whose holding as a major shareholder changes across a 1% step, must report to the company, the State Securities Commission and the exchange within five working days, and the company publishes the change. Insiders of the company and their related persons must report planned transactions in advance and their results afterwards. Investors acting together are treated as a group for these purposes, which matters for consortium bids and for funds managed by the same manager. Breaches are fined under Decree No. 156/2020/ND-CP and, more practically, can lead the authorities to question a later tender offer exemption.

Mandatory tender offers

Article 35 of the Law on Securities requires an investor, with its related persons, to register with the State Securities Commission and make a public tender offer where a purchase would give it, directly or indirectly, 25% or more of the voting shares of a public company; and, once it holds 25% or more, where further purchases would take it to or above 35%, 45%, 55%, 65% or 75%. The offer is made through a securities company acting as agent, on equal terms to all shareholders, after the Commission's approval, and during the offer the offeror may not buy outside it. An offeror that holds 80% or more after the offer must buy the remaining shares within 30 days on the same price and terms, unless the offer was for all shares.

No offer is required in the cases listed in Article 35, including a purchase of new shares in an issue approved by the general meeting, a transfer approved by the general meeting that identifies the transferor and transferee, a transfer within a group that does not create cross-ownership, shares bought at auction or in the State's divestment of its capital, shares received on a merger, division or consolidation, gifts and inheritance, and transfers under a court judgment or arbitral award. In practice most negotiated acquisitions of large stakes in public companies proceed under the general-meeting-approval exemption, which requires a shareholder meeting with the interested shareholders not voting and must be planned into the timetable. Failure to make a required offer is fined and can lead to orders to complete the offer, loss of voting rights on the excess shares or compulsory sale within six months.

Private placements, lock-ups and trading

A public company may issue shares by private placement only to strategic investors and professional securities investors, with general meeting approval and registration with the State Securities Commission; the shares are restricted from transfer for at least three years for strategic investors and one year for professional securities investors from completion of the offering, subject to limited exceptions such as transfers under a court judgment or by inheritance. Law No. 56/2024/QH15 confirmed that foreign organisations investing in Vietnam can qualify as professional securities investors, and Decree No. 245/2025/ND-CP added the documentation for doing so, which has made private placements a practical route for foreign strategic investors to take a significant minority stake with board representation.

To trade, a foreign investor obtains a securities trading code from VSDC through a custodian or securities company and opens a dong indirect investment account at an authorised bank. Decree No. 245/2025/ND-CP allows an electronic trading code to be issued so that the investor can trade without waiting for the paper certificate, and allows a foreign fund management company two codes, one for proprietary trading and one for client accounts. Circular No. 68/2024/TT-BTC lets foreign institutional investors buy shares without pre-funding the full purchase price, which FTSE Russell cited in its upgrade decision. A foreign corporate seller pays 0.1% of the price on a sale of securities, withheld by the securities company, rather than the 2% that applies to unlisted capital (Tax on share transfers and dividends).

Delisting and taking a company private

Article 120 of Decree No. 155/2020/ND-CP lists the grounds for compulsory delisting, including loss of public company status, cessation of the main business for a year or more, no trading for 12 consecutive months, losses for three consecutive years or accumulated losses exceeding contributed charter capital or negative equity in the latest audited accounts, an adverse or disclaimer audit opinion or qualified opinions for three consecutive years, late annual financial statements for three consecutive years, and serious disclosure breaches. A company that is delisted but remains public must register its shares for trading on UPCoM.

Voluntary delisting under Article 121 requires a general meeting resolution approved by more than 50% of the votes of shareholders who are not major shareholders, and may take place no earlier than two years after listing. Vietnamese law has no general squeeze-out procedure; the 80% buy-out duty after a tender offer protects minorities but does not give the bidder a right to compel the last shareholders to sell. Taking a company fully private therefore combines a tender offer, a delisting resolution supported by the minority, and, if the company is to cease being public, a reduction in the shareholder base below the public company conditions, which may take years. Investors planning a take-private should model these steps before agreeing a price.

The market upgrade

On 7 April 2026, following its March interim review, FTSE Russell confirmed that Vietnam would be reclassified from Frontier to Secondary Emerging market status with effect from the open on 21 September 2026, the reclassification announced in October 2025. FTSE Russell credited the removal of the pre-funding requirement for foreign institutional investors and a formal process for handling failed trades, while noting the importance of access for global brokers. Index inclusion is reported to be phased: 10% at September 2026, 30% at March 2027, 65% at June 2027 and full inclusion at September 2027. For foreign strategic investors the upgrade is likely to mean more passive foreign capital in large listed companies, more pressure on companies at or near their foreign ownership limit, and more competition for blocks; it does not change the legal rules described above.

Acquiring a significant stake in a listed company

1. Check the foreign ownership limit and headroomConfirm the notified limit and current foreign ownership with VSDC data and the company; check sector caps and whether the target's lines will change on 1 March 2027.
2. Choose the routeNegotiated block purchase, private placement of new shares to a strategic investor, or a public tender offer; each has different approval and lock-up consequences.
3. Map the tender offer positionAggregate the investor's and related persons' holdings; identify whether 25% or a higher step will be crossed and whether an exemption, typically general meeting approval, is available.
4. Obtain approvalsGeneral meeting approval of the private placement or transfer (interested shareholders not voting), State Securities Commission registration, merger control where notifiable, sector regulator approval for banks, insurers or securities firms, and any Article 21 registration the authority requires.
5. Set up trading infrastructureTrading code from VSDC, custody account, indirect investment account under Circular No. 03/2025/TT-NHNN.
6. Complete and discloseSettle through the depository; report crossing 5% and each 1% step within five working days; if a tender offer was made and 80% reached, buy out the remaining shareholders within 30 days.