Enhancing legal frameworks to boost foreign investment in Viet Nam’s stock market
The issuance of Decree No. 245/2025/ND-CP on September 11, 2025, amending and supplementing several provisions of Decree No. 155/2020/ND-CP which details the implementation of certain articles of the Securities Law, represents a crucial solution that establishes a legal framework and a favourable mechanism to boost foreign capital flow into Viet Nam, thereby increasing resources for the country’s economic development in the new phase.
A notable highlight of the decree is the facilitation it provides for foreign investors to take a deeper part in Viet Nam’s stock market.
The decree introduces provisions recognising the status of professional securities investors for individuals holding foreign nationality and organisations established under foreign law operating in Viet Nam.
In addition, procedures and documentation required to determine professional investor status have been adjusted to align with documents and papers issued abroad. This regulation makes it easier for foreign investors to participate in private placements and encourages more international organisations to expand their investment activities in Viet Nam.
The issuance of Decree No. 245/2025/ND-CP represents a crucial solution that establishes a legal framework and a favourable mechanism to boost foreign capital flow into Viet Nam, thereby increasing resources for the country’s economic development in the new phase.
According to economic experts, another important adjustment designed to enhance the appeal of Viet Nam’s stock market is the shortened timeframe for newly issued securities to be listed for trading on the centralised market.
The decree mandates the unification of IPO dossiers and listing registration dossiers and clearly sets out the order and procedures for share listing at stock exchanges.
Under the new provisions, the IPO process concurrent with listing registration will be considered simultaneously, thereby significantly reducing the processing time.
In particular, the period for securities to be traded after listing approval is shortened from 90 days to 30 days. Thus, the listing process will be shortened by 3 to 6 months compared to the current timeline, contributing to safeguarding investors’ interests and increasing attractiveness for offerings, especially for foreign investors who highly value timing and market liquidity.
Decree No. 245/2025/ND-CP also strengthens protection of the rights of shareholders who are foreign investors. It abolishes the provision allowing the general meeting of shareholders or the charter of public companies to decide on foreign ownership limits lower than the maximum allowed by law and international commitments.
With this adjustment, foreign investors will have more opportunities to buy and sell shares and access listed companies, while also reducing risks arising from unusual events affecting businesses.
To ensure transparency, public companies must complete the procedure to notify the maximum foreign ownership ratio within 12 months from the effective date of the decree, addressing the current situation where many enterprises have not fully complied.
Streamlining procedures and increasing transparency to attract international investors
In practice, information on the maximum foreign ownership limit has been publicly disclosed on enterprises’ electronic information portals and stock exchange websites, and is updated daily by the Viet Nam Securities Depository and Clearing Corporation. This provides a crucial basis for foreign investors to easily access information and make trading decisions.
Representatives from the State Securities Commission stated that, regarding the procedure for granting securities trading codes, the new decree simplifies the process to align with international practices.
Foreign investors will be allowed to trade immediately after receiving a trading code via the online system (ESTC) without submitting paper applications for an official certificate as before. The shortened timeframe for issuing trading codes reduces costs and enhances market access efficiency.
The State Bank of Viet Nam has also issued new circulars to simplify procedures for opening indirect investment capital accounts and payment accounts for foreign investors, reducing costs and entry time, helping Viet Nam come closer to the goal of upgrading the stock market to the emerging market group.
An additional noteworthy change of the decree is the allowance for foreign securities investment fund management companies to be granted two trading codes — one for proprietary trading activities, and one for client-managed trading activities. This regulation optimises internal management procedures and creates the basis to implement omnibus trading account models in line with international practice, improving governance and transparency.
Decree No. 245/2025/ND-CP also completes the legal basis for implementing a central counterparty clearing (CCP) mechanism for securities trading and settlement. This is one of the major reforms aimed at meeting the expectations of foreign investors participating in the Viet Nam market.
The application of CCP not only helps foreign institutional investors reduce currency risk during the payment cycle but also provides a safer protective mechanism in case of payment risks. The deadline for CCP implementation is set no later than December 31, 2027, but the State Securities Commission plans to execute the move earlier, starting from the first quarter of 2027.
These recent legal framework changes relating to securities and the stock market, including the issuance of Decree No. 245/2025/ND-CP, demonstrate the Ministry of Finance’s strong reform efforts to open wide doors for international capital inflow into Viet Nam’s stock market, elevating Viet Nam’s position on the global financial map.
Along with expanding opportunities and reducing barriers, the Ministry of Finance also focuses on enhancing information transparency to protect the rights of foreign investors. Listed companies and public enterprises are required to disclose information simultaneously in Vietnamese and English on a scheduled basis, enabling international investors to access information on equal terms with domestic investors.
In addition, the decree requires that corporate bonds offered to the public must have credit ratings, which may use ratings from reputable international agencies such as Moody’s, Standard & Poor’s, or Fitch Ratings. This improves transparency and aligns with international standards, thereby strengthening investor confidence.
The decree also extends the entities qualified to guarantee public corporate bond repayment beyond domestic credit institutions to include international financial organisations. This provides more options for Vietnamese enterprises raising capital and increases trust for foreign investors in the market.
Moreover, regulations on corporate governance, reporting responsibilities, disclosure of capital use, dividend payments, and shareholder rights protection have been amended and supplemented to limit conflicts of interest and enhance transparency. These are key factors for Viet Nam’s stock market to approach international standards and meet the strict requirements of foreign investors.
These recent legal framework changes relating to securities and the stock market, including the issuance of Decree No. 245/2025/ND-CP, demonstrate the Ministry of Finance’s strong reform efforts to open wide doors for international capital inflow into Viet Nam’s stock market, elevating Viet Nam’s position on the global financial map.
