Corporate governance—Vietnam—Q&A guide
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...

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: April 2020).

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 (LOE), which became effective on 1 July 2015, is the primary source of corporate law that encompasses the establishment, governance and operation of companies in Vietnam. For public companies, which are those made public by (1) the offer of shares, or (2) having their shares listed on the stock exchange or a securities trading centre, or (3) having their shares owned by at least 100 investors excluding professional securities investors and with paid-up charter capital of 10 billion Vietnamese dong or more, the Law on Securities and the legal guiding documents thereof, including Decree 71/2017/ND-CP and Circular 95/2017/TT-BTC, provide further regulations on corporate governance as part of their public status. Notably, the new Law on Securities 2019 will supersede the current Law on Securities 2006 as of 1 January 2021, and the relevant regulations may be soon updated by the relevant governmental agencies.

Additionally, for companies that

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