Issuance and trading of bonds is governed by Ministry of Finance (MOF) rules and regulations, the details of which are can be found by following the link provided below.
Bond Issuing Procedures
The Ministry of Finance (MOF) determines the amount of government bonds to be issued. Decree No. 141/2003/ ND-CP regulates the issue of government bonds, bonds guaranteed by the Government, and local authority bonds. Decision No. 46/2006/QD-BTC provides for the issuance of large lots of government bonds to strengthen capital mobilization, enhance the liquidity of government bonds, and help build a benchmark rate for debt instruments. Decree 52/2006 supersedes Decree 120/CP, which had previously regulated the issuance of state-owned enterprise (SOE) bonds.
The criteria for issuing corporate bonds are detailed in the Decree on Securities and Securities Markets (Decree 144), and the Law on Credit Institutions. Under Decree 52/2006, joint-stock companies and SOEs that have been restructured into limited-liability, foreign-invested companies operating in Viet Nam are eligible to issue bonds and are responsible for making bond payments.
Circular No 75/2004/TT-BTC provides guidelines for the issuance of bonds under Decree 144. Highlights of the circular are summarized at the website linked below.
The State Securities Commission (SSC) released a legal framework through Decision 253/QD-UBCKNN regulating the listing and trading of US-dollar denominated government bonds. The dollar bonds are listed and traded at the Hanoi Securities Trading Centre�(HaSTC).
Full texts of all new decrees will be posted here when the English-language version becomes available.
Licensing
The State Securities Commission (SSC) is responsible for licensing market participants. It issues licenses for securities companies, advisers, investment funds, investment fund managers, depositories, and custodians.
Companies engaging in securities brokering on the Ho Chi Minh Stock Exchange (HOSE) must also obtain a license from HOSE before being permitted to trade.
Foreign firms must establish a joint-venture company with Vietnamese partners and apply for a license with SSC to conduct securities trading activities in Viet Nam. Specific regulations on the organization and operation of securities companies are stipulated in Decision No. 55/2004/QD-BTC of the Ministry of Finance (MOF), which is linked below.
Accounting Standards
There are no specific accounting standards governing financial instruments. However, the Government has issued 26 Vietnam Accounting Standards in five phases since 2000. The last phase was released in 2005 when the Ministry of Finance (MOF) issued four accounting standards on (i) business combination; (ii) provisions, contingent liabilities, and contingent assets; (iii) insurance contract; and (iv) earnings per share.
MOF is in the process of formulating 10 new accounting standards for measuring financial instruments based on International Accounting Standards.
Viet Nam's accounting mechanism is divided into two systems: MOF supervises enterprises and the State Bank of Viet Nam (SBV) oversees credit institutions.
Investment Funds
Investment funds are a fairly new financial product in Viet Nam. There is currently no established approach for computing an investment fund's net asset value.
The Ministry of Finance (MOF) is the statutory body responsible for taxation.
Individuals are exempt from personal income tax for interest income received from investing in bonds. Institutional investors, both domestic and foreign, are subject to a 25% corporate income tax for any income derived from bonds.
The remittance tax, which previously applied to profits transferred abroad, has been removed.
A summary of the tax rate for investing in government and state-owned bonds in Viet Nam is provided in the table below.
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