CIRCULAR No. 06/2002/TT-NHNN OF DECEMBER 23, 2002 GUIDING THE IMPLEMENTATION OF THE GOVERNMENT'S DECREE No. 79/2002/ND-CP OF OCTOBER 4, 2002 ON THE ORGANIZATION AND OPERATION OF FINANCIAL COMPANIES On October 4, 2002, the Government issued Decree No.79/2002/ND-CP on the organization and operation of financial companies, the State Bank hereby guides the implementation of a number of articles of the Decree within its jurisdiction as follows: Section I. GENERAL PROVISIONS 1. Scope of regulation: 1.1. This Circular guides in detail a number of contents in the Government's Decree No. 79/2002/ND-CP of October 4, 2002 on the organization and operation of financial companies (hereinafter called Decree No. 79/2002/ND-CP for short). 1.2. The State Bank shall issue separate documents guiding the following contents related to the organization and operation of financial companies: a) The Regulation on the Managing Board, controllers and managers; b) The stipulations on criteria of professional ethics, professional qualifications, managerial capability of the Managing Board, the Control Board and the managers; c) The regulation on shareholders, shares, share certificates and charter capital; d) The regulation on opening and terminating the operation of, branches and representative offices; e) The regulation on forfeiting and factoring activities. 2. Types of financial companies: The financial companies constitute a type of non-bank credit institutions, being Vietnamese legal persons and practicing independent cost accounting. Financial companies are set up and operate in Vietnam in the following types: 2.1. State-run financial companies are financial companies invested with capital, set up and managed by the State. The State-run financial companies are set up and operate in Vietnam in two forms: a) Financial companies under State corporations, with 100% of their charter capital supplied by the concerned State corporations. b) Other State-run financial companies. The granting of licenses for the establishment and operation of financial companies of these types shall comply with the separate guidance of the State Bank. 2.2. Joint-stock financial companies are the financial companies set up in form of joint-stock companies with their capital jointly contributed by organizations and individuals under the regulation of the State Bank and other provisions of law. 2.3. Financial companies attached to credit institutions are those set up by credit institutions with their own capital as the owners under the provisions of law, practicing independent cost accounting and having the legal person status. 2.4. Joint-venture financial companies are those set up with capital contributed by the Vietnamese party comprising one or many credit institutions and/or enterprises and the foreign party comprising one or many foreign credit institutions on the basis of joint-venture contracts. 2.5. Financial companies with 100% foreign capital are those set up with capital of one or many foreign credit institutions under the provisions of Vietnamese law. 3. Operation duration: The operation duration of a financial company in Vietnam shall not exceed 50 years. In case of necessity to extend the operation duration, such must be approved by the State Bank. Each extension shall not exceed 50 years. For financial companies under State corporations and financial companies attached to credit institutions, the operation duration must not exceed the operation duration of such State corporations or credit institutions. 4. Charter capital: The charter capital of financial companies shall be contributed in the following forms: 4.1. In cash: a) For the financial companies under State corporations, the financial companies attached to credit institutions and the joint-stock financial companies, the charter capital shall be contributed in Vietnam dong. b) For financial companies with 100% foreign capital, the charter capital shall be contributed in US dollar. c) For joint-venture financial companies: The foreign party shall contribute charter capital in US dollar and the Vietnamese party shall contribute charter capital in US dollar or Vietnam dong. In case of contribution in Vietnam dong, the contributed charter capital amounts must be converted into US dollar at the average exchange rate on the inter-bank foreign currency market between Vietnam dong and US dollar, announced by the State Bank at the time of contributing the capital. 4.2. In kind: The charter capital contributed in kind must be assets with lawful papers proving the ownership rights and the necessary assets in direct service of operation of the financial companies. The valuation of and transfer of the ownership over the capital-contributing assets shall comply with the current provisions of Vietnamese law. 5. The capital contribution ratio, the transfer of contributed capital amounts and the division of profits of joint-venture financial companies and financial companies with 100% foreign capital: 5.1. Charter capital contribution ratio: a) Capital contribution ratio: The ratio of charter capital contributed by the foreign party and the Vietnamese party in the joint-venture financial companies shall be agreed upon by the parties and approved by the State Bank. The capital amount contributed by the foreign party must not exceed 49% of the charter capital of a financial company. b) The capital contribution ratios of the joint-venture financial companies and the financial companies with 100% foreign capital must be specified in the charters of the financial companies. 5.2. Transfer of contributed capital amounts: a) The Vietnamese parties and the foreign parties in the joint-venture financial companies are entitled to transfer their contributed capital to other parties in the joint ventures, but must ensure the capital contribution ratio prescribed at Point 5.1. In case of transferring the contributed capital in excess of the prescribed level, the State Bank's approval is required. b) Financial companies with 100% foreign capital are entitled to transfer their capital but must give priority to Vietnamese organizations. c) The conditions on transfer of capital of joint-venture financial companies or financial companies with 100% foreign capital must be specified in the charters of the financial companies and must conform to the provisions of law. d) All cases of transferring capital of joint-venture financial companies and financial companies with 100% foreign capital must be reported to the State Bank and shall take effect only after they are approved by the State Bank. e) In cases where the transfer of capital of financial companies yields profits, the transferors must pay tax according to the provisions of Vietnamese law. 5.3. Division of profits and the sharing of risks: Parties to the joint-venture financial companies shall divide profits and bear risks of the joint-venture financial companies according to their respective capital contribution ratios, except otherwise agreed upon by the parties and stipulated in the joint-venture contracts. 6. Interpretation of terms and phrases: In this Circular, the following terms and phrases shall be construed as follows: 6.1. Foreign credit institutions means foreign banks or financial organizations or international financial organizations set up under foreign or international laws, which join in contribution of capital to joint-venture financial companies or financial companies with 100% foreign capital in Vietnam. 6.2. Legal capital means the minimum capital amount required by law for setting up a financial company. 6.3. Charter capital means the capital amounts contributed by organizations and individuals and recorded in the Charters of the financial companies. 6.4. The founding members mean organizations and/or individuals participating in the approval of the first Charter of a financial company. 6.5. Big shareholders mean individuals or organizations owning more than 10% of the charter capital or holding more than 10% of the voting equities at the financial companies. Section II. REGULATIONS ON GRANTING OF LICENSES FOR ESTABLISHMENT AND OPERATION OF FINANCIAL COMPANIES 7. Conditions for financial companies to be granted establishment and operation licenses (hereinafter called licenses for short): 7.1. Wishing to operate in the geographical areas of application for operation; 7.2. Having enough legal capital prescribed in the Government's Decree No.82/1998/ND-CP of October 3, 1998 promulgating the list of legal capital levels for credit institutions, specifically as follows: a) The legal capital of a State-run financial company, a joint-stock financial company or a financial company attached to a credit institution shall be VND 50 billion. b) The legal capital of a joint-venture financial company, a financial company with 100% foreign capital shall be USD 5 million. 7.3. Their founding members are prestigious and financially capable organizations and/or individuals; 7.4. The administrators and manager have full civil act capacity and professional qualifications suitable to the operations of the financial companies and the regulations of the State Bank; 7.5. Having establishment and operation charter compliant with the Law on Credit Institutions, Decree No.79/2002/ND-CP and other provisions of law; 7.6. Having feasible business plans; 7.7. In addition to the above-mentioned conditions, the foreign parties to joint-venture financial companies or financial companies with 100% foreign capital must be: a) Permitted by foreign competent agencies to conduct banking activities or operation of financial companies; b) Permitted by foreign competent agencies to operate in Vietnam. 8. Dossiers of application for licenses A dossier of application for license by financial companies shall include: 8.1. The application for the license: a) For financial companies under State corporations, financial companies attached to credit institutions: It must be signed by the chairman of the Managing Board of the concerned State corporation or credit institution or by the person authorized by the chairman of the Managing Board of the State corporation or credit institution. b) For joint-stock financial companies: It must be signed by the founding members or the authorized representative of the founding members' group. c) For joint-venture financial companies, financial companies with 100% foreign capital: It must be signed by the representative at law or the person lawfully authorized by the capital-contributing parties. 8.2. The draft charter: The charter of a financial company must contain the following major details: a) Name and head-office of the financial company; b) The operation duration; c) The operation contents and scope; d) The charter capital and mode of capital contribution; e) The procedures for electing, appointing and dismissing Managing Board members, the general director (director) and the Control Board; f) Tasks and powers of the Managing Board, the Control Board and the general director (director); g) The legal person representative of the financial company; h) Rights and obligations of shareholders i) The financial, accounting, inspecting and internally auditing principles; j) Cases of dissolution and dissolution procedures; k) Procedures for amending the charter. 8.3. Operation scheme: clearly stating the contents and modes of operation, areas of operation, benefits for the economy and determining the specific operation plan for the first three years. 8.4. The lists, curricula vitae, professional diplomas and certificates of the founding members, the Managing Board members, the Control Board members and the general director (director) of the financial company; 8.5. The plan for charter capital contribution, the list of charter capital-contributing parties and their commitments on the charter capital contribution levels; 8.6. The financial situation and information related to big shareholders. For big shareholders being enterprises, the to be- submitted dossiers shall include: a) The founding decision; b) The current charter; c) The competent agency's written certification of the charter capital amount and the capital amount actually available in the current year; d) Document on appointment of legal person representative of the enterprise; e) The financial balance sheet, the profit and loss table already audited and the report on operation situation in the latest three years. 8.7. The provincial/municipal People's Committee's written approval of the place for locating the financial company's head-office. 9. The dossiers of application for license of a financial company under the State corporation: Apart from the documents defined at Point 8, Section II of this Circular, the dossiers of application for license of a financial company under a State corporation shall also include the following documents: 9.1. The Prime Minister's principled approval of the establishment of the financial company of the State corporation. 9.2. The written approval of the establishment of the financial company under the State corporation, signed by the minister managing the technical-economic sector. 9.3. The State corporation's written approval of the source and level of charter capital allocated to the financial company under a State corporation. 10. The dossiers of application for license of financial companies attached to credit institutions: In addition to the documents prescribed at Point 8, Section II of this Circular, the dossier of application for license of the financial companies attached to credit institutions shall also include the following documents: 10.1. The document signed by the chairman of the Managing Board of the credit institution or the person authorized by the Managing Board chairman regarding the source and level of charter capital allocated to the financial company. 10.2. Documents related to the credit institution being the owner, including: a) The founding decision or establishment and operation license, the business registration certificate; b) The current charter; c) The State Bank's decision approving the charter capital; d) The financial balance sheet, the profit and loss table already audited and the report on operation situation in the latest three years. 11. The dossier of application for license of joint-venture financial companies or financial companies with 100% foreign capital: Apart from the documents prescribed at Point 8, Section II of this Circular, the dossier of application for license of a joint-venture financial company or a financial company with 100% foreign capital shall also include the following documents: 11.1. The charters of the capital-contributing parties; 11.2. The licenses of the capital-contributing parties; 11.3. The competent State agency's document permitting the foreign party to operate in Vietnam in form of joint-venture financial company or financial company with 100% foreign capital. Where the laws of the original country do not require this document, there must be evidence certification by the competent agency. 11.4. The financial balance sheet, the profit and loss table already audited and the report on operation situation in the latest three years of the capital-contributing parties; 11.5. The joint-venture contract for a joint-venture financial company shall contain the following principal details: a) The name and address of the joint-venture financial company; b) Names and addresses of representatives of the parties to the joint venture; c) The operation duration of the joint venture; d) The charter capital: The capital contribution ratio, the capital level contributed by each party, the plan on capital contribution, clearly stating the capital amount in foreign currency, in Vietnam dong, in kind (if any); e) Rights and obligations of the parties; f) The number and ratio of members of the Managing Board, the Control Board and the directorate of the parties to the joint venture; g) The anticipated numbers of sections, boards, officials and employees of each party at the initial stage (the number of persons bearing the Vietnamese nationality, the number of persons bearing foreign nationality(ies); h) The principles on accounting, book-keeping, reporting, establishment and use of funds, the division of profits and loss to the joint-venture parties; i) The procedures for settling disputes between parties, which arise from the performance of the joint-venture contract, the procedures for liquidation, dissolution, merger and consolidation of joint-venture financial companies; j) Conditions for amending and supplementing the joint-venture contract. 12. Submission of dossiers of application for license: 12.1. The dossiers of application for licenses of the financial companies under State corporations, the joint-stock financial companies and the financial companies attached to credit institutions: The dossiers shall be made in 2 sets in Vietnamese. The documents in the dossiers must be the originals; in cases where they are copies, they must be certified by the agencies which have issued the originals or by the State Public Notaries. 12.2. The dossiers of application for licenses of the joint-venture financial companies and the financial companies with 100% foreign capital: a) The dossiers shall be made in 2 sets, one in Vietnamese and one in English. The dossiers made overseas must be the originals or the copies certified by competent agencies. b) The documents to be consularly legalized shall include: The foreign competent agency's paper permitting the foreign credit institution to conduct banking activities or operation of the financial company and the documents of the foreign competent agency permitting the foreign party to operate in Vietnam in form of joint-venture financial company or financial company with 100% foreign capital. c) The Vietnamese copies and the translation from foreign languages into Vietnamese must be certified by Vietnamese Public Notaries or Vietnamese diplomatic missions or consulates overseas; 12.3. Organizations and individuals applying for licenses must send to the State Bank of Vietnam 2 sets of dossiers as provided for at Points 12.1 and 12.2. For the application for setting up joint-stock financial companies, the dossiers of application for licenses must be addressed to the State Bank's branches in provinces or centrally-run cities where the companies plan to locate their head-offices for consideration. 13. Certifying dossiers and time limit for consideration and granting of licenses: 13.1. After receiving the complete dossiers, the State Bank shall certify in writing the completeness of the dossier sets for the representatives of the capital-contributing parties. 13.2. The time limit for consideration and granting of licenses: Within 90 (ninety) days after receiving the complete dossiers of application for the licenses, the State Bank shall grant or refuse to grant licenses. In case of refusal to grant licenses, the State Bank must issue documents clearly stating the reasons therefor. 14. The establishment and operation licenses: The licenses shall be granted by the State Bank in set forms, including: 14.1. The licenses for financial companies under State corporations, financial companies attached to credit institutions and joint-stock companies. 14.2. The licenses for joint-venture financial companies and financial companies with 100% foreign capital. 15. The licensing fees: 15.1. The fee level for each licensing (or license extension) for financial companies shall comply with the regulations of the Finance Ministry on collection, payment, management and use of charges and fees in the banking field. 15.2. Within 15 days after being granted licenses (or given license extension), the financial companies must pay fees into the accounts of the State Bank's Transaction Office or branches in the provinces or centrally-run cities where the companies locate their head-offices. The fee-payment vouchers

Thông tư 06/2002/TT-NHNN