Corporate governance—Vietnam—Q&A guide

The following Share Incentives practice note provides comprehensive and up to date legal information covering:

  • Corporate governance—Vietnam—Q&A guide
  • 1. What are the primary sources of law, regulation and practice relating to corporate governance? Is it mandatory for listed companies to comply with listing rules or do they apply on a ‘comply or explain’ basis?
  • 2. What are the primary government agencies or other entities responsible for making such rules and enforcing them? Are there any well-known shareholder or business groups, or proxy advisory firms, whose views are often considered?
  • 3. What powers do shareholders have to appoint or remove directors or require the board to pursue a particular course of action? What shareholder vote is required to elect or remove directors?
  • 4. What decisions must be reserved to the shareholders? What matters are required to be subject to a non-binding shareholder vote?
  • 5. To what extent are disproportionate voting rights or limits on the exercise of voting rights allowed?
  • 6. Are there any special requirements for shareholders to participate in general meetings of shareholders or to vote? Can shareholders act by written consent without a meeting? Are virtual meetings of shareholders permitted?
  • 7. Are shareholders able to require meetings of shareholders to be convened, resolutions and director nominations to be put to a shareholder vote against the wishes of the board, or the board to circulate statements by dissident shareholders?
  • 8. Do controlling shareholders owe duties to the company or to non-controlling shareholders? If so, can an enforcement action be brought against controlling shareholders for breach of these duties?
  • 9. Can shareholders ever be held responsible for the acts or omissions of the company?
  • More...

Corporate governance—Vietnam—Q&A guide

This Practice Note contains a jurisdiction-specific Q&A guide to corporate governance in Vietnam published as part of the Lexology Getting the Deal Through series by Law Business Research (published: June 2021).

Authors: Nishimura & Asahi—Hikaru Oguchi; Taro Hirosawa; Vu Le Bang

1. What are the primary sources of law, regulation and practice relating to corporate governance? Is it mandatory for listed companies to comply with listing rules or do they apply on a ‘comply or explain’ basis?

The Law on Enterprises, which became effective on 1 January 2021, is the primary source of the corporate laws that encompass the establishment, governance, and operation of companies in Vietnam. For public companies (ie, a company that has a minimum amount of paid-up charter capital of 30 billion dong and in which at least 10 per cent of the number of voting shares is held by at least 100 investors that are not major shareholders, or a company that has made a successful initial public offer of shares through registration with the State Securities Commission in accordance with laws), the Law on Securities and the legal guiding documents thereof (including Decree 155/2020/ND-CP and Circular 116/2020/TT-BTC) provide further regulations on corporate governance as part of their public status.

Additionally, for companies that are joint ventures between foreign investors and Vietnamese partners engaging in the services committed to by Vietnam under

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