21. What public-facing documentation must a buyer produce in connection with the acquisition of a listed company?

Shares can be bought before the bid announcement provided that the number of shares sold does not exceed the thresholds requiring a tender offer. A tender offer is required in the following cases:

• Purchase of a company’s circulating shares that result in a purchaser, with no shareholding or less than a 25% shareholding, acquiring a 25% shareholding or more.
• Purchase of a company’s circulating shares that results in a purchaser (and affiliated persons of the purchaser), with a 25% or more shareholding, acquiring a further 10% or more of circulating shares of the company until it reaches 75% threshold.
• After a tender offer, if said entities have acquired 80% or more of the total voting shares of a listed company or outstanding fund certificates of a closed-end fund then it is mandatory to purchase the shares or fund being held by the remaining shareholders, unless all voting shares or outstanding fund have been bid for.

There is no guidance on building a stake by using derivatives. In addition, the bidder cannot purchase shares or share purchase rights outside the offer process during the tender offer period.

The bidder must publicly announce the tender offer in three consecutive editions of one electronic newspaper or one written newspaper and (for a listed company only) on the relevant stock exchange within seven days from the receipt of the State Securities Commission’s (SSC’s) opinion regarding the registration of the tender offer. The tender offer can only be implemented after the SSC has provided its opinion and following the public announcement by the bidder.

22. What formalities are required in order to document a transfer of shares, including any local transfer taxes or duties?

Depending on whether the seller is an individual or a corporate entity, the following taxes will apply:

• Capital gains tax. Capital gains tax is a form of income tax that is payable on any premium on the original investor’s actual contribution to capital or its costs to purchase such capital. Foreign companies and local corporate entities are subject to a corporate income tax of 20%. However, if the assets transferred are securities, a foreign corporate seller is subject to corporate income tax of 0.1% on the gross transfer price.
• Personal income tax. If the seller is an individual resident, personal income tax will be imposed at the rate of 20% of the gains made, and 0.1% on the sales price if the transferred assets are securities. An individual tax resident is defined as a person who:
• stays in Vietnam for 183 days or longer within a calendar year;
• stays in Vietnam for a period of 12 consecutive months from his arrival in Vietnam;
• has a registered permanent residence in Vietnam; or
• rents a house in Vietnam under a lease contract of a term of at least 90 days in a tax year.

If the seller is an individual non-resident, he is subject to personal income tax at 0.1% on the gross transfer price, regardless of whether there is any capital gain.

Payment of the above transfer taxes is mandatory in Vietnam.

Author: Dr. Oliver Massmann

Email: omassmann @duanemorris.com