Cumbersome paper work for registering transaction codes is discouraging foreign investors to pump capital into Vietnam’s stock market.
According to Nguyen Duy Hung, chairman and chief executive officer of the Saigon Securities Corporation (SSC), a number of foreign institutional investors are avoiding investment in the stock market because of difficulties in having their transaction codes registered.
Under current laws, foreign institutional investors are required to submit a business establishment license to the State Securities Commission in order to have transaction codes registered at the securities trading centers.
However in fact, most foreign institutional investors who intend to inject their capital into the local bourse have not yet set up a business in Vietnam. Hence, they must submit a license issued by their local authorities. Such a license is required to be translated into Vietnamese and notarized by authorized Vietnamese agencies.
“However paper work is not so simple because the Consular Department under the Vietnam Ministry of Foreign Affairs requires the license of foreign institutional investors to be confirmed by embassies in Vietnam,” said Hung.
“It is not easy to get confirmation from foreign embassies,” added Hung.
“The cumbersome procedures have discouraged foreign investors,” said Hung.
Indeed, the SSC has lost a number of foreign institutional investors, particularly those from the US who fail to fulfil the required documentation for transaction codes.
The SSC has recently proposed the State Securities Committee remove the requirement to have confirmation promulgated by the Consulate Department and foreign embassies in Vietnam.
In addition, the SSC suggested establishing a selected law firm assigned by the State Securities Commission to translate the license of foreign institutional investors into Vietnamese which then will be notarized by authorized Vietnamese agencies.
Vietnam Investment Review
Vietnamese
